Equity futures lower on the ftse. The s p 500 went down. Bid into the bond market. Into the bond market we go, negative almost 60 basis points on a 10 year. Its like a throwback to our days together five years ago. There is some weight to this. Good morning. Annmarie certainly, it is. Were so excited to have you back. An absolute gladbac bloodbath, nymex dropping below 39 as the resurgence of cases in europe not going to bode well on the demand side. The supplyside worried about libyan oil barrels. Softer. A bit this is the prospect of fresh stimulus. That helped treasury yields rise. Jonathan thank you. Lets get the first word news this morning. We can do that with laura wright. Laura china is laying out a new plan for Economic Growth this week in beijing. President xi jinping is holding a meeting to decide on the next fiveyear plan. Its expected to focus on technological innovation, economic selfreliance, and the environment. But the event is closed to the press. Key decisions wont be cleared before it wraps up thursday. The latest trade talks between britain and the European Union have been extended to the middle of this week. As the u. K. Government has indicated optimism about signing a deal, sources tell bloomberg the chief negotiator Michel Barnier will remain in london for the discussions. The senate advanced Amy Coney Barretts nomination to the Supreme Court to a final vote. Her confirmation that are today is in little doubt, but it comes after delaying tactics by democrats. They want to wait until after the election while republicans see the chance to lock in a conservative majority on the bench for years to come. Protesters in thailand are putting pressure on germany over the kings legal status in the country. Its the latest move to force changes to the constitutional standing of the monarchy. Demonstrators are asking terminate to scrutiny asking germany to scrutinize whether he violated countrys law. The king is in bangkok spends much of his time in germany. Global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. Jon, ann marie. Jonathan thank you very much. Eight days to go into the election, President Donald Trump continuing to downplay the impact of coronavirus. Some companies are coming out very quickly with the vaccine. Very shortly, very quickly. Double quickly and the pandemic. Were rounding the turn. The vaccine will get it done fast. Jonathan cases hit a record sunday. Mark meadows said the u. S. Is not going to control the pandemic. Europe and spain and gnashing announcing a curfew with spain and italy. More restrictions across europe, an increase of infections across United States a real concern as we go deeper into winter. Annmarie exactly. You and i have had this conversation. Its not even flu season. We got our flu shots and its not even winter. We still see strict restrictions in europe. Were deep into earnings season. Markets are ignoring earnings season and looking at fresh restrictions. Jonathan what i really worry about, its still october, not november, were not starting winter across the continent, but the data has deteriorated. Weve already lost momentum. We saw it again this last week. This is an economy without momentum, facing an increase in infections. Once again, an ecb asked to do the heavy lifting. Thats the event of the week. The pressure on Christine Lagarde, with not many places to go. Annmarie certainly not, and she gave a nod to the g service data. She said the Services Economy in europe is 75 of jobs. While the services contract, there is much harder to come out of. That vocation you didnt take in the summer, youre not going to take it next month. Maybe the car you dont buy, but the vacation you dont take. Serious services. Jonathan joining us now is the head of flexible multiasset. Mark, great to get you on the show. First question for you, does a second wave lead to a second dip in the european economy . Mark great question. I think its already starting. [indiscernible] the european economys already slowing down. With further restrictions were likely to see, that will fully accelerate the downfall. Annmarie good morning. What does this mean in terms of where you want to start putting assets . How do you want to change your portfolio going into weeks end . Marc so many. The president ial elections, the coronavirus case numbers accelerating. We also have vaccine trial readouts. An incredible amount of noise. We dont have an edge because we have to wait for events to unfold. We are looking for signs of trends emerging, even within asset classes. To a point about europe, we will adopt a cautious stance for this reason. Coronavirus going in the wrong direction, highfrequency data. Another thing to focus on is the fact inflation dynamics are also deteriorating. Its investors, businesses, consumers not anticipating lower prices. They will withhold spending decisions. Jonathan sap came out yesterday evening, and they cut guidance for the rest of this year. That stock is down in the early trading by almost 1013 . How complacent are we being in europe . Look at how they europe the economy is playing out. Even software companies, even theyre struggling. What does that make for cyclicals . Marc if you look at the earnings season in the u. S. , its cyclical, the biggest beast by far, by financials, materials. Its been strong earnings against expectations. The nifty, thats because the bar is low to beat. Its worth highlighting this week will be critical for the technology sector. All the big Communication Services companies reporting. After that, well have a better feel of which ban better perspective to year end. Annmarie and you did say earnings in the u. S. Are doing well, but earnings taking a backseat given covid cases, given the u. S. Election. Using after the election, earnings will become do you think after the u. S. Election, earnings will become valuable again . Happen is will investors will effectively have in fact elections in their rearview mirror. Will apply there will be winners and losers. What youre probably going to see is money put back to the sidelines in order to have [indiscernible] once that clarity emerges. Jonathan weve got to leave it there. Great to catch up. Marc will be sticking with us. Coming up, the stimulus blame game. Sap cutting its outlook for 2020. We speak with the cfo in 30 minutes time. Alongside annmarie hordern, im jonathan ferro. This is the countdown to the european open. Good morning. This is bloomberg. Were waiting for the final you said they said they would. Yeah, and also same thing. They keep moving the goal post. Were making concessions, too. We dont even have the bill yet. Weve continued to make offer after offer after offer and etsy continues to move the goal post. Jonathan neither side willing to take responsibility for the frozen pandemic relief plan. Well polos he says it could happen this week, the chances of it making it through the senate is slim. Malcolm marc is still with us. Its pretty obvious the daylight between house democrats, the admits ration, and Senate Republicans administration, and Senate Republicans is still there. We will get a deal done, not before the election, but some port some point afterward. Marc you cant win out, because houses and households need funds, given the fiscal thing that submerged. The challenging thing is elections are only a few days away. That introduces a level of calculation by both sides, on top of the normal ramblings. Both sides are jockeying for position, each side being blamed if the other side doesnt go well, or taking credit if it does go well. Were seeing a chicken wire situation, where both are trying to put pressure on the other side to extract more concessions. We do think theres a possibility of negotiations culminating in a deal but getting those funds out is a pretty low probability. Annmarie it certainly is. Jon caught up with larry kudlow. As hes talking about the fact they want to get this deal, President Trump says go big or go home, larry kudlow is saying there is a vshaped recovery. If theres a vshaped recovery, why do you need to trillion dollars plus of stimulus 2 trillion plus of stimulus . When you see relief for households . Marc that base case is moving all of the time. The reality is its unlikely those funds get released before the election. But if the election is contested, that kicks the can further down the road for businesses that need it. Jonathan even if its not contested, lets say republicans keep the senate and biden takes the white house, what does that look like the morning of november 4 for this market . Marc the market will take time to digest what it needs in practice. It depends on whether the republican majority is compromised or they gain seats. That will dictate how confident they are feeling when they enter negotiations with a new white house administration. Theres another scenario in which trump retains presidency but the republicans lose majority in the senate so trump becomes an island, not just within the legion of pounds, but also within his own party. That creates a very distinction all very dysfunctional situation. Annmarie on that point, the betting agency has a probability of a blue sleep at 51 . It was formerly 62 . Do you think investors are overpricing it as blue wave, and is now a time to start buying protection . Marc great question. We wouldnt be convinced the Market Movement weve seen is down with the narrative of a blue wave. Theres so many other things going on which will have an effect on price. Certain level of optimism on a fiscal deal, certain level of optimism on vaccine trials being successful, and of course, the fed and other Financial Companies doing the best to support financial conditions and support financial markets. The betting polls are right and tightening off, for sure. What we would say for certain is the National Opinion polls definitely overstate the likelihood of a blue suite. It is blue sweep. It is still a probability, but President Trump has a high level of support within rub republican within republican registered voters. This support rate is growing in key minority communities, such as the hispanic community. It is possible trump is better than the Mainstream Media would believe. Jonathan let me get to the price action. Equity futures down. The dax pretty hard this morning. Likewise on the s p 500, as well. You mention the narrative around price actions. Whats pressuring for many, we take the price action and create the narrative. Whats clear to me is when things are going up and working, why would the things that have been working stop working anytime soon . Lets talk about the things that have been working up until this morning. Growth equities, fantastic. Credits, tighter, brilliant. When does that stop working . Marc i think whats a more interesting observation, whether that continues within asset classes, theres been a rotation in cyclicality that started in september when we talk about technical correction in the nasdaq. That continued this month, where we saw cyclical sectors, financials, industrials lead the market. That is predicated on, i think, the prospects of a fiscal stimulus, which will bear steepening of rates and curves. If you see a reversal in the reaction, you will see the possibility of styles starting to rebalance themselves again. Secondly on credit markets, what youve seen in the past few weeks is credit risk overspread of duration risks. Typically, high yield have been outperforming. Part of that is rates have gone higher. The duration profile is a lot longer. Again, if rates start to be better as a safe haven asset, you could see that relative performance reverse. Jonathan he mentioned a bear statement. Weve got a full platter. Big question was asked last week. Limiting treasuries might be. Healthsouth do you think it would how south do you think it would be . Marc there are two things to focus on, the sign of the move, and the pace of the move. The size is 10 or 11 basis points, relatively modest. What we are interested in is the move was quite orderly. Basis points rising higher every single day. Markets can absorb that because they view the pattern for the right reason, fiscal stimulus, Economic Outlook mediumterm, and equities and credits are like that. Its when stocks see dramatic moves higher which makes markets weary because theyre not sure whats driving that. They create a sense that the fed has lost control of bond markets, having been successful in suppressing volatility the past few months. Jonathan great to catch up. Really good to see you. Marc franklin on this market. Futures this monday morning breaking down, and down hard, the s p 500 down. Talking about the bid coming back to the market. 30s come again almost five basis points. Dax futures getting hammered. We shaved 220 off dax futures. Much more on price action still to come with your Bloomberg Business flash. Heres laura wright. Laura Carlyle Group is nearing an agreement to acquire seagrams for 2 billion euros. The buyout firm and german engineer are finalizing terms of the deal. They outbid brookfield for the unit. No official, yet, but the deal could be announced comment yet, but the deal could be announced next week. It paves the way for a blockbuster sale that bank at the chinese sent tech giant a higher valuation then jp morgan. More details are expected by tuesday. Sources tell bloomberg the hong kong price could be announced as soon as thursday. Sap cut revenue forecast for the year. It says it expects coronavirus to hurt demand through the first half of 2021. The pandemic will delay the tech firms goals for cloud revenue, overall sales, and profit for one or two years. Previous outlook incorrectly assumed economies would reopen. That your Bloomberg Business flash. Jonathan thank you, thank you very much. Coming up, a covid resurgence pushing back the recovery. This stock market is down and down hard. 40 minutes away from the market open in loaded. Good morning. Alongside annmarie hordern, im jonathan ferro. This is bloomberg. We declare once again a state of emergency because it is the most effective way to slow down the contagion curve and keep the virus away. Annmarie annmarie that was the spanish Prime Minister declaring a National State of emergency. He would Ask Parliament to extend the rules initially enforced for 14 days to six months, until may of 2021. U. K. Is considering reducing the self adulation time for people who tested positive, cutting it for two weeks to 107 days. The government is making some changes for Business Travel, trying to get a boost to airlines. Joining us, siddhartha phillips. What do we know about potential changes . Could they potentially start jumping on jets again and traveling around the world for deals . Morning. Lastah, were hearing this evening the government is considering making bankers, hedge fund managers, executives working on deals, traveling from overseas to the u. K. Exempt from this quarantine period. This is in an attempt to promote a global britain. The governments justification is a lot of these people andally fly on private jets they wont come into contact with anybody. That is what the government is thinking about at the moment. Jonathan its unbelievable to me this is how were marketing this move. Airlines are struggling because Business Travel is shut down. The best way to get Business Travel moving is to reopen quarters and do something about quarantines and testing. When you promote in a way that says its a hedge fund manager, for bankers, it gives an elitist kind of tilt. Why are we doing this when we know what this is about . Its about getting airlines up and running, quarters moving, back to business, back to work, so we dont have to bail out these companies. Siddharth absolutely. The problem at the moment is there have been spikes in the virus in europe, as you all know, and thats coming into contrast with attempt to restart the men. Essentially its restart demand. Essentially its across the world. Travel continues to be slow. Thats what airlines and officials have been urging governments to do is replace the military quarantine period with a testing regime. But the government hasnt said anything about accepting a testing regime. Where it suggested was replacing the two we quarantine with a one we quarantine, followed by a test two we quarantine, followed by a one week quarantine, followed by a test. Jonathan great to catch up, really important story for the Business Community and the city of london. Headlines breaking across the bloomberg in the last couple minutes, china, boeing defense, Lockheed Martin selling arms into taiwan. China set to sanction, boeing defense, Lockheed Martin as well. Up next, joe biden heading to georgia. We discussed the u. S. President ial election, just eight days away. From london and new york, this is bloomberg. Jonathan 30 minutes away from the opening of equity futures,. 9 ,0 7 , dax futures dax futures up. 2 . Dani burger with us now. Dani weve been paying a lot of attention to what happens with equities after the election, but lets talk about what happens with a week to go. A lot could happen. According to miller payback, if history is any guide, he was equities should move higher from here on out. Historically, over the past 30 years, every single election weve seen this play out, i was move higher by an average of 8. 3 heading into the election. The notable exception is 2016. A lot of news flow happened before the election that put a hamper on where equities could go. That could certainly play out this week, as well. Mahle here says theres no guarantee with anything, but this does tell us odds are for equities to go higher until the election next week. Jonathan getting breaking news. Let me bring that to our audience. Biotech asked bayer for 4 billion. They were acquired biotech for 4 billion. Dani theyre going to pay if milestones are met. Lets take a look at how they trade at the open. Dani, back to your morning call, is there