>> good morning from bloomberg's middle east headquarters, i'm manus cranny and these are the top stories. looks rise as investors for more clues on the impact of coronavirus. florida sets a record for the most daily cases in the state and infections in hong kong cause concern. electionpresidential is too close to call. the incumbent i had by a thin

margin. the result is seen as pivotal for the future ties of the nation with the european union. and u.s. banks are braced for the worth order since the -- quarter -- for the worse quarter since the financial crisis. jp morgan kicks off a big rank week. good morning, it is 6:00 a.m. in london. it is getting hot here. with an untamed virus irrationalional -- exuberance in stocks. it could get tricky. goldman has upped their view of their earnings. y'all so have the gilead story in terms of remdesivir helping the severely ill despite the untamed virus in florida exceeding the peaks of new york and texas.

they are still below consensus and there are deals there. the dollar drops. two straight weeks of a demolition of the dollar. yields traded at .63. do you buy the rally? i'm a believer, are you? copper is the shining narrative. copper is ripping it up there this morning. you are looking at the longest 20 16. streak since is that a wake-up call to the treasury department? on -- willudi's turn the saudis turn on the faucet? you also should have a bit of gold. let us talk about the virus and the surge in hotspots across the

u.s. florida broke the daily record for all u.s. states. new cases.5,000 markets continue to shrug off the fears. mike nova grexit is warning -- mike is warning that tech stocks are in a speculative bubble. >> this is a bubble. certainly in the tech space. i don't think jay powell would say he wants the market higher but we are kind of unhinged from reality. the economy is grinding slowly. the tech market makes new highs every day, tesla is up 10%. that is a classic speculative bubble. we are at really dangerous valuations on the tech side. is zoom or tesla or whatever a stock has a story,

everyone is rushing into and that gets me worried. >> what does that mean for the retail investor here? we have been doing a lot of work with the mom and pop investor coming into the market. are you concerned they could get burned here? >> certainly. this reminds me of 2017 and the cryptocurrency. a lot of people bought been and then it collapsed. these stocks though are not like are real companies but they are being valued way ahead of where i think reality is. what ends bubbles usually is central-bank action. we have a big election coming up. let us assume joe biden wins for a second and i think he will, ratef a sudden capital tax

is raised. not priced in yet. we are still in a euphoric stage of the market going up every day fueled by tons of liquidity. >> let us talk about biden. heterday he was saying that does not believe the shareholder capitalism can continue. to takeinvestors going in that thinking? >> wall street was already moving in that way. paul jones has something called just capital. alongfink is on the train with mark andreessen -- tons of people have been moving in that way. java shareholder only is not working. peoplellowing too many behind. funds --a rise in est

esg funds. is wanting to lead wall street. that is not a big concern for the market as much as the tax code. >> i want to go back for a second because you were talking valuations.yhigh what is that mean in terms of how you are investing? >> a friend of mine said in markets like this you want to be on the airplane but in the seats closest to the exit. the reality is that i missed this tech move. i have not been participating. i have a lot of friends that are making a lot more money that i days.se i have a lot of gold and bitcoin . they are also participating in this liquidity driven bubble. liquidity will not go away.

manus: mike, a very candidate ceo. speaking to us exclusively. my guest host is bill street, the ceo at kbl. , crazy markets, bubble like come irrational exuberance. is merely on steroids. good morning. bill: good morning, manus. i think the tech stocks and the nasdaq and the hang seng will continue to dominate. thats you really believe

what we just traveled through what not have any structural changes to the economies and how they work. the tech stocks will continue to dominate. they are the classic stocks going forward. else,licy, if nothing need to tell economies how to behave and function. monetary fiscal and will continue to support the long-term growth stocks going forward. of behavior, we have popped -- in terms of havens, we have popped up a board. the.com era lacked legitimacy. you were going to get this kind of return. treasury,o be long yen, and vix.

and gold. in terms of havens, what would you be prepared to take extra on board for a haven trade? correlationk at the -- it is not just what safe haven you can go to come it is how you balance that in your portfolio. if you are overweight with the tech stocks and long-term growth stocks, it may feel a little heated at the moment. so what you put into your portfolio will give you that balance. for us, one of the long-term .iversified is treasury and gold. gold has had some very good correlation functions. it has been performing very well, it is very liquid. you don't have these concerns with gold as you might as compared to techniques such as using the vex.

-- using the vix. health and you like emerging markets and you are not frightened to make the hard decisions. "untamed the show with virus" versus "irrational exuberance in the stocks." you could say we are in the low lands of phase one of this covid-19. what do you need to see to shift more overweight? bill: let us look at it this way, manus. the pandemic have -- has been a very atypical event. the response to this has been pretty typical in terms of the

policies, the fiscal policy and the monetary policy coming together in a very eloquent way. an eloquent way -- way. what is coming out of this? you are looking at growth but also a degree of inflation. how is inflation going to manifest itself? we don't quite know yet but what we do know is there is a very high likelihood that you will have a system asset price in inflation. that is what we are seeing at the moment. be market will continue to impacted by intervention. for in termsooking of potential downsides or to in ae even more active risky asset space?

i think there is still a downside risk of a lack of therapeutic response. manus: we are going to pick up the inflation narrative in a moment because that goes back to a conversation i had on friday evening. with inflation coming you do not have a fully accommodative central-bank narrative. first word news this monday morning. elections in poland. the presidential candidate there -- it is too close to call for the candidates to claim victory. -- a highly charged campaign with a high turnout since the fall of communism. credit suisse is considering cutting hundreds of jobs as the coronavirus boosts online operations. the bank is looking to save money and meet profit targets. the new ceo is said to be

considering cuts to the lender's domestic branch networks. house trade advisor, peter navarro, says he expects president trump to take strong action against tiktok and wework . he told foxnews that the administration was just getting started and would not rule out banning them. he rolled out the sale of tiktok to an american buyer would not even be enough to solve the problem. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. coming up, there is a lot of the ticket items on the agenda for this week. ,he second quarter kicks off gdp from china is just the order d'ouevres the hors

for this week's offering. this is bloomberg. ♪

manus: this is "bloomberg daybreak: europe." this is a manus cranny. china set recovery in to continue albeit slowly. weekdp data is out this and it is expected to show resilience despite the resurgence of covid-19 cases in beijing. the real gdp is expected to year. by 3.4% this that is higher than the consensus forecast of just over 2%.

bill street is my guest host. the chinese markets are ripping it up this morning. up over china's chinex 3%. worried,stories -- get it is 2015 again. valuations might tell another story. there is the growth. we reckon at bloomberg that we are returning to growth. over 3.3%. is up forecast, how our important to global risk on narrative is that china delivers and delivers well? think it is important. look at chinal very closely.

they were first in terms of the pandemic and first out. you have to be a little careful about the comparisons because the chinesees that authorities have been able to use cannot necessarily be replicated in the west. command-and-control to escape from this in a more organized way. we are looking across the world for incremental growth patterns and that is what we are seeing out of china. i suspect when we look at the consistent exit less uniform to be and that will create a little more concern as we look at the economic numbers in the u.s. and europe. translate -- i just narrativey to tie the

in china to emerging markets because you have a pretty strong core in terms of emerging market sovereign debt in hard currencies. what is the most attractive? just talk us through that. it links exactly to your introduction on china really. when we were looking at how we were managing risk in the portfolios of our clients come up where did we want to increase our exposure? the emerging markets were the first key place for that reason. andnew china was first in we knew they would be able to get control of their of economy using fiscal levers. china dominates the emerging-market complex. as china's incremental growth comes through, the government debt has been forming well in the hard currency space.

ill, we have mark -- ok, bill, we have more work to do. coming up, banking pain. are expected to stay in their numbers this week and analysts expect the worst since the financial crisis. that is next. this is bloomberg. ♪

manus: it is "daybreak: europe." barnstormerto be a of a week. the battle of central banks will continue. here are the events. -- the governor of the

bank of england will be speaking 5-5." ebinar entitled " he will be joined by john williams. the panel will be moderated by our very own francine lacqua. the uk's office of budget responsibility well published three economic scenarios on the impact of the pandemic. as a monthly gdp and industrial released.ing data is when you get to wednesday, it is going to be the bank of japan publishing their monetary policy decision. thursday is the ecb and francine lagarde will hold a virtual press conference. and on friday, the 27 nations will meet in brussels to hash out the details of the massive economic stimulus package. what will be the compromises? and another item on the agenda, the u.s. bank earnings are expected to be the worst this

quarter since the financial crisis. they will give indications of how these three methods -- these three months of covid-19 measures are impacting the economy. take me through what you are focused on in terms of the retail bank agenda. dani: it is likely to be another record quarter. when we think back to the we only had aer, few weeks of the pandemic to judge. have come out of three months of the pandemic so we should get a clear idea of what exactly the economic pain is going to be and how the banks will prepare for it. because we had this soaring unemployment picture, it means a lot of their consumers and customers will be unable to pay back debt. and they are unlikely to have

asen out new bonds or debt well which means the interest income is also going to be a real weak spot for the banks. -- ane banks are in important part of their earnings have been service charges and credit card fees. and given the stay at home or does, it is likely those will has suffered as well. wells fargo reports tomorrow. the previous quarter they said --ut $4 billion for though -- low provisions. hear the cheers for ficc and then the reality may be on the margins. silver lining. give me something to fly a kite with. nejra is not here so i am a bit

lonely. is likelyty trading to be a bright spot given the hunt for cash and the increase in volumes. 31%s expected to rise about for all of wall street banks. jp morgan is expected to see its trading revenue rise 50%. that will certainly help them out. one other area that might be strong for banks will be mortgages given how low rates art. spotsl, one of the bright that i think a lot of analysts will hope to find in these earnings is that this is just a temporary hits from the coronavirus rather than any sort of existential capital issue for these banks, manus. street has more on the forbearance of the regulators getting us through this. this is what will drive this.

reality check may be on the landing but it is about forbearance in this trump administration. it will be a tailwind that will help them out. trading revenues will be tailing off quite significantly for the backend of two to. -- of 22. the regulatory forbearance on the capital treatment will also be a factor. we also have to remember for the longer-term theme is the boards may throw win as much loan provisioning. putting as much in in the first

two quarters as possible. i suspect what we will see in the backend of q4 when we come out -- manus: bill, we are going to pick up that in a moment. the clock has ticked down. that is my guest host. we were turn right here on "daybreak: europe." ♪

morning from bloomberg's middle east headquarters in dubai. i'm manus cranny and it is "daybreak: europe." global stocks rise. looking for more clues on the impact of covid-19. florida setting a record for the states.ly cases in the poland's presidential election is too close to call with the

incumbent ahead by only a thin margin. the result is seen as pivotal with the future ties of the nation with the european union. and u.s. banks are braced for ther worst quarter since financial crisis. jp morgan kicks off a big week for the banks tomorrow. --has just gone 6:30 p.m. 6:30 a.m. in paris. still fly high with the untamed virus and some would say a touch of irrational exuberance and where to go. guest says they will still be overweight equities. goldman raises their earnings per share. air. are deals in the analog bidding. the dollar index rose, all hail

the rally. ofre is a certain amount correlation between the demolition of the dollar and the rise in equities. -- there arerises bonds, 0.63%. copper, absolutely barnstorming ahead. are the longest in the u.s. they have been in two years. china gdp. oil drops i 0.7%. -- by 0.7%. gold is up by 0.4%. those are your markets. we are in risk on mode. bank meetsn central

this week, they will review the radical suite of measures. economists do see some central banks adopting boj styled policy. while the new york fed president john williams says the fed is thinking about it very hard come at the ecb official has ruled it out. eu leaders will meet later this personr a person to meeting, the first in months. the block would have 750 million euros of bonds. michael raab spoke to bloomberg saying the so-called frugal for will not stand in the way of it -- the so-called frugal four will not stand in the way of an agreement. solidarity and unity are key for us. we have to send a clear signal

to the question -- to the countries most affected by the pandemic. to agree oneasy such a huge amount of money but i fully agree with the member states which expressed the very strong commitment to the future oriented challenges of the european union which means and moredigitalization in our common interest. what we really need is the willingness to form a compromise. >> there is some tension right with the recovery fund in the so-called frugal four. some of the states want a certain conditionality in terms of dispersing the funds. what do you think can be offered to the frugal four to get a deal? >> i agree. financial focus our

activities on climate, digitalization, rule of law, and social cohesion. and there is room for maneuver but at the end, i am rather optimistic that we will agree as soon as possible. >> as soon as possible means maybe even next week or do you think this could spill into august? . it would -- a speciald be responsibility for all member states. what we need are swift solutions and a very ambitious outcome of the negotiations. i hope we can reach an agreement that is acceptable for all in july. germany's michael roth speaking exclusively to bloomberg. what could the end of the week bring?

a boost in the arm. bill street is with us. if i look at european markets, london is up 1.1%. bankstocks -- euro stocks are -- is upoxx 1.3%. relative to the u.s., how do you compare? , as we stand today, as we look at the broad indexes between the u.s. and europe, europe is still lacking. part of it is the composition of the indexes. will continuees to make up things. europe is dominated by the fangs the faangs.

these are the first green shoots of a federalized fiscal approach. movement ofnto this federal fiscal policy for europe which is all about grants and not about loans. sovereign involve credit risk and be fortified by a much more homogenous response excess which we obviously know the u.s. is struggling with as well. for the second half of this year, there is a strong narrative about looking to europe versus u.s. going forward. manus: you say this is an attractive entry point for european high-yield. why? bill: well, so actually the -- is one of our first

moves. we knew that the central banks were going to be coming in. we knew that government policy and central bank intervention would be supported. and it would be supportive of a government debt market. between ig and high-yield does have a relation. if you look at the investment grade market and if you look at the risk premium being offered in the high-yield market over the investment grade, it was compelling. very rarely do you have a significant dislocation between the high-yield and the investment grade market. it has developed into some really good opportunities for our clients. manus: can i flip that over to the u.s. differential? a guest last week discussed a

slightly more prolonged recovery. i don't know where i am with narratives. i want to look more towards ig in the u.s. in a more protracted recovery or dislocated recovery mode. does that inverse mirror play? i think -- i think for the u.s., looking at the credit market -- broadly speaking the narrative is similar in terms of support for government bonds in the ig and the rest of the credit complex. high-yield is a slightly different animal to europe with regards to it being very much linked with the oil industry and the higher fractional producers

of oil which have been under a lot of stress. we expect a lot more volatility and it is a lower grade policy. get some are going to figure is on the big european narratives from volvo and next week we move into some of the banks. how important is the language that these ceos use in terms of guidance and risk? yeah, we spoke about the banks earlier but i think a lot of the ceos are going to be cautiously optimistic in terms of looking at what the markets are looking for is incremental positive news. a do not need game changing narratives or headlines. that theant to see

direction of the opening up is good and it is coming through in these reports. we do know there is a permanency of policy support and the policy support is going to be going on for the next couple of years. what we are looking for is just incremental improvement and that will keep the narrative for the equity markets moving. manus: yup, the never ending central bank options. bill street is my guest host. that is get you up to speed. florida has broken its daily record for all u.s. states with more than 15,000 new coronavirus cases. new york city reporting no new forirm virus related deaths the first time in more than four months. onhong kong, 38 new cases sunday. amongst the fears of a

resurgence in the financial hub. and south africa removes alcohol. exit polls and poland shows the presidential election is too close to call with both candidates claiming victim. it does not take into account the nearly half a million votes that event posted from those abroad that may favor the challenger. washighly charged campaign most widely supported since the fall of communism. companythe u.k. directors polled said they were not able to prepare for transition with many saying they need more clarity. the survey found the financial sector the most prepared while manufacturing still has the most to do. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than

2700 journalists and analysts in more than 120 countries. around the world. coming up, it is opec plus week. we ready ourselves for the next move. how do you avoid an oil taper tantrum. this is bloomberg. ♪

manus: it is "daybreak: europe." nejra cehic is taking the day off. the absolute tenacity of it. oil is heading lowered. there is a lot of risk. it is down by 0.6%. wednesday we have been opec

meeting. the coronavirus continues to surge in many parts of the world as we have been telling you. keeping an eye on the oil markets is annmarie hordern. what exactly is on the table? >> they are going to be considering whether data keep the 9.6hether to keep billion barrels a day off the market order to allow some of these applies to come back on. this would be the taper. cutting back to some 7.7 million barrels per day. they see demand recovering so members are leaning towards the tapering. one member said shipping schedules have already been created for august. but russia -- it's major oil

companies are not prepared to increase production next month. they are goingke to start the tapering. the worry is as they start to taper, the market may be too fragile and the concern is about what happens next and that worries another price crash. manus: you talk about what is going to happen next. i know you were on the phone. rate ofthe 12 month change in global oil demand. taking up, yes and it is getting better but they want to avoid a taper tantrum. soon is they move too ahead of the recovery of the demand side. >> i asked his royal highness what heopec zoom

thought about the central bank metaphor. could they start modeling themselves about how they monitor the oil market? how many meetings have we had? he also called alan greenspan his hero. tantrum as want this they start to tighten the rains -- the reins. cloud whendarkening it comes to covid-19. this weekend alone really highlighted that when we look at the u.s., in florida they broke a record. there is a warning that the shadow, aasting a worrying reminder that the pandemic is still in control. bob mcnally says he sees oil demand globally rebounding.

isis hopeful that the risk certainly to the downside. ok, we will go to you for the news conference. annmarie hordern somewhere in europe. is looking into that. the question i ask myself is -- the delicate balance. that demolition and demand. it is folly to believe that you will ever get back to the 2019 revenue. put is the risk that they this oil back on the market and we get a tantrum? risk.i think it is a real centralhe analogy of banks in terms of trying to in managingclarity expectations of the marketplace with more transparency.

i think you are also right, manus. a recovery in the stock markets and in various sector errors. i think where we will have more economic scarring will be in those areas which will be slower to recover which will be some of those heavy oil consumers especially transport. of all of the sectors coming back online, to go back to 2019 hundred percent capacity, the transport industry will struggle. the consumption for oil is going to be slow from that sector. if we bring on production to quickly, you could have a lot of sensitivity to the price. is the final roundup of some of the pieces of the jigsaw that we of look at today. you have given me a new word.

pernicious. i want to talk about inflation. i doubt that we will see pernicious inflation. when nejra she will be very impressed that i have a big new word. look, manus, we have a situation where we have talked at length about this elegance s'policies,ernment monetary and fiscal. we are in a. where we have to look at real rates across the world. you cannot ignore as an investor what that means for inflation. when yous inflation is get embedded inflation in the system and inflation expectations become far more

difficult to moderate and control by the central banks and their four they are over -- and their four, they are -- and therefore, they are over their skis. off point.od jumping bill street my guest host this morning. coming up on the show, we have been telling you that it is too close to call in poland. a highly charged election. ck andnoff is net an neck. this is bloomberg. ♪

manus: it is "bloomberg daybreak: europe." been telling you that

the polish election is a hard one to call. it is highly charged and looks very close. both candidates claiming victory. claimsllenger's campaign that there were large irregularities and is planning to protest. votes just need to be counted which in truth will make this evening a nerve-racking one for everyone in poland but i am absolutely convinced when we count each vote we will be victorious and we will definitely win. get to ourus executive editor for international government. great to have you with me. what do we know? it is really coming down to the wire. >> it is very tight. we expected it to be closed after the first round of the presidential election in the runoff yesterday. -- itwithin the larger of

is within the margin of error and does not take into account the votes that were posted abroad. this was the highest turnout since the fall of communism which shows the amount of investment that polish people have in this vote. in urban areas and younger thele tended to vote for candidate that they view as the alternative. that said, there is a powerful voting block in rural areas as well. it is too close to call. manus: thank you so much. straight and to the point. these markets are quite literally stoked for risk on rally this week and they are ignoring the covid narrative in

florida. daybreak europe: the european market open is next with anna edwards. this is bloomberg. ♪ it's pretty inspiring the way families

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anna: good morning. welcome to "bloomberg market: the european open." i am anna edwards live in london. the cash trade is less than a nomura way. stocks rise as investors look to results season with some optimism, but as investors shake off the corporate impact of the coronavirus, infections rise, from florida to hong kong. oil slips as opec-plus is said to