year end in its latest effort to support the economy. washington stimulus talks stall. trading boost. deutsche bank posts a small profit after its best fic performance in almost eight years. the cfo tells us the lender is working towards breaking even this year. and profit at barclays plunges. the british bank warns of a challenging second half of 2020. we'll hear from the chief this is "bloomberg surveillance, everyone. francine lacqua in london. tom keene is in new york. we are looking forward to special fed coverage to give us an indication of what markets are focusing on, and then we will focus on tech stocks. tom: let's do a tech stock -- the tech stock rally today -- i would particularly watch mr. bezos of amazon. the 2:00 p.m. discussion with chairman powell, michael mckee will be on top of that for us. caroline hyde leading fed coverage. all i can say is the meeting is scheduled to be a yonder -- a

my radarhich means is up. francine: let's get to first word news with ritika gupta. ritika: mitch mcconnell insists that businesses, schools, and other organizations be protected against coronavirus lawsuits, and that has bogged down talks over a new stemless package. demanding that changes to liability law include wholesale in the legislation. nancy pelosi says that shows he is not serious about reaching a deal. federal reserve policy makers will turn their attention on how to jumpstart a stronger rebound from their sessions. they are all but set to keep their benchmark overnight rate unchanged when they wrap up their meeting today. the fed releases a statement at 2:00 p.m. new york time, jerome powell holding a news conference 30 minutes later. telln ceo jeff bezos will

-- will say that his customers -- his company -- he will strike a patriotic tone for his appearance before the house antitrust subcommittee. u.k. may loosen its coronavirus quarantine rules after a backlash from tourists and spanish authorities. the governor -- the government may abandon blanket restrictions in favor of regional restrictions. passengersmay -- quarantining after arriving may be shorter. virus testing will begin for arriving passengers. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm ritikauntries, gupta. this is bloomberg. francine? tom? tom: thank you so much. equities, bonds, currencies, commodities.

, the way thats the dollar is weaker is really interesting. all of a sudden yen catching up with the euro strains. we have yen strains. we see that in a euro-yen here with a churn. swiss franc does nothing, which i think is fascinating. maybe we will touch on that with gilles moec in a moment. i would point out that turkey is a mess, not only dollar-lire, but just as important, euro-lire is out to new record weakness. turkey, all my radar is up as we roll into august on the challenges of mr. ertl again. -- of mr. erdogan. francine: i think we should spend a bit more time on it. stocks are edging up. to be honest, when i last checked, they were trading sideways. this is because they do not know

what to do in the run-up to decisions from the fed policy meeting. have a couple of banking stocks down. bad loan provisions that exceeded market estimates. gold hovering close to its record $2000 an ounce. and bitcoin, i will talk about it in a second. but it is steady, just above 11,000 as the two asset classes, golden coin, -- gold and bitcoin seem to be taking a breather. thank you for joining us. when you look at the number of infections rising, what does it mean for how you are expecting the recovery to pan out? impression so far is that it is not so much or it is not just about the number of infections. it is about our tolerance to risk, and there is a big difference between the u.s. and europe. it is clear that for any given

rate of propagation of the virus, europe to tens -- europe tends to take restrictive measures often. here we are, we have had some regional bands on travel -- regional bans on travel. risky approach in some places. , myver, at the same time impression is that we have been able so far in europe to avoid by fair amounts and he returned to the complete lockdown situation we had two months ago. i am still quite positive, actually, on the pace of recovery for q3 in europe. july is already in the bag, so to speak. august could be a bit more of a challenge, but the level of normalization, at the pace we have seen, puts europe ahead of the u.s. to measure this very

cautiously. clearly it is not as strong as it was two weeks ago, but track -- the track remains positive. francine: what do you worry about the most in europe? is it unemployment or is it something else? i am not too worried about q3. the story about q3 is about how far we had to restrict in q2, triggering a recession, and how quickly we can normalize supply. when we get to q4, this is when demand is going to be cheap. that we know at the moment the picture that we get of the labor market -- at the permanent rate we have in europe, it has absolutely no connection with the reality of the field because we have frozen the system thanks to very generous unemployment schemes, and we know that they will become less generous from

october onward. q4 could be the proper trial of weand, and unfortunately will see some moderation growth as we get to the end of the year. tom: right to where i want to go. i have been thinking about this, the microeconomics of the labor economy. as you well know, and there has been a lot of this in the press, particularly about stimulus in washington. the demand for labor -- is it there? gilles: i don't think it is really there. if you create a situation where you subsidize very heavily, either keeping people on payroll or rehiring, you are creating an artificial situation. really on thes underlying pace that we could have toward the end of the year. usually there is a strong connection between labor connection -- labor demand and

capex. it tells you whether both companies believe in the future, want to invest in the future, want to be able to produce more. ofex i think will be a mix the current situation because uncertainty remains too high. if there is no investment, there is likely to be also -- tom: what is so important here is it all falls back to dynamics, what is called elasticity in demand and supply. all of this is microeconomics. the bottom line is, do we follow on in q4 from challenges to labor demand -- and i love your idea of a diminishment -- of a capex diminishment -- and does this leave into a test lead into a wave flattening? gilles: that is the risk. if i look at the way fiscal stimulus is framed, if you want, the differences between europe

and the u.s., what makes me a bit nervous is the amount of money that is already being spent in the u.s. to prop up income, to replace wage income, aggregating inat the u.s. was higher than it initially started, whereas i think what we need his support for income in the long haul. and obviously the more you spend during the emergency, the harder to get support for long-haul 3, four in the next 2, quarters, which is what i think we will need. upis about propping investment, again, if the levels are high, you need to replace investment in the private sector that is not going to happen with something else. that could be public investment. when i look at the situation in the u.s., i am amazed by how

short-term it still is. it is about propping up demand right now. it might not be the issue or it is only part of the issue. the issue is to create expected demand for the next 2, 3, four quarters come and we are not there. francine: what will be the catalyst for people in washington to start thinking like that? does it depend on the current stimulus? does the size matter, because if it is too big, it will push away what you are just explaining? gilles: you need to find the right balance. it is really complicated in the current electoral situation. i try to be a realist and understand why both parties want to respond to the right here and right now, focusing on providing support between now and november. i understand this. -- as long as

there is this across the two parties, it is difficult in the current environment where we are not going to be talking about the kind of support that we have. one of the reasons we cannot talk about it is we do not know who is going to win. choices will be different across the two parties. from that point of view, i think europe is in a better position than the u.s. our problem is that we are hesitant on the quantum of support come on the quantum of fiscal policy support -- on the quantum of support, on the quantum of fiscal policy support. we are in a better position because we can at the moment have a consolation and start taking about 2021, which is not really an open avenue in the u.s. much,ne: thank you so gilles moec stays with us. in fed decides at 2:00 p.m. new york, 7 p.m. in london. and this is bloomberg. ♪

tom: it is a wednesday in july. francine lacqua in london, i am tom keene new york. an interesting time talking economics, folding and into finance and investment. right now euro, 1.1751. yen stronger, 104.93. at encore yesterday, extraordinary on his big figure, stronger yen call. right now we are smarter with gilles moec, thrilled he could be with us today. look at the basic ratio, which

is stimulus to gdp. of europe,of umph lagarde, all the other names, whatever -- who is getting the stimulus as a percent of gdp best? u.s., by a large amount. there is no question. the u.s. response has been .wifter, bigger but coming back to my previous point, it is not just about the quantum, it is about the quality. and the sort of visibility of what you are doing. -- you this you need to need to prepare for the next three years. and this is the thing in the u.s. if i have to provide a caricature in the situation, i would say that the u.s. is spending a lot, possibly a bit too much at the moment, and not enough in the future.

europe is starting to talk a lot about spending about the future, but is not spending enough at the moment. so we are sort of mirror image across the atlantic. stereotype, the cliche, if you will come is the bridge that goes out. bridge go?the moec it is over the river seine in the polian's time that in the leon's time. napo are you building a bridge out to 2024? gilles: it gets us to the recovery in the resilient fund that europe just built. it is supposed to take us to 2027. we are providing visibility of fiscal capacity until 2027. my fear is that it is too slow in the sense that it would not be that we would be happier with that -- that we would be happier

with a much more concentrated fund. for typical reasons this was not possible, and i would go for something bigger because the recovery, the reasons remain small. it in terms of timing, this is probably what we need to start thinking because i am trying to isnk about when the market going to start really questioning the trajectory. point, while it may take two or three years, there may be some inflation which may force banks to be less accommodative than they are now. -- we meantime, they can can go forward with fiscal stimulus without being too worried. 2044, -- 20 24, it

harder. if we do not spend now, on this two or three years, and we decide to do that later, it will be with much more complicated conditions on the financial side. that is how i would describe the bridge. we need to find the right way between the moment when monetary policy is going to start being less supported -- supported than it is today. francine: do you see european countries doing it wrong or thinking about this wrong right now? thiss: i think on sequence, it is probably right approach. it is on the quantum that we have a problem in the sense that there is a lot of thinking going on now in many countries, and in germany clearly, also in france providing describing

andal debility for 2021 2022. we are getting the sequence right. where there is hesitation is on how far we can go in the next one or two years. a lot of countries are worried their physicalng credentials. even though the ecb is helping. i think there is a habit creating -- how to change the mindset went for years you have been thinking about keeping your health in order, not falling in the same trap as many fell into. i think we are still guarded the our approach. we have the right sequence that we have to go a bit on the quantum. tom: this has been a very thoughtful discussion. onles moec, chief economist this for today as well. coming up later, a conversation with anthony fauci.

an important conversation. more than timely, starting with a horrific new statistic that we are seeing out of arizona leveling. and difficult statistics in texas and south carolina. this is bloomberg. ♪

ritika: this is "bloomberg surveillance." that get the bloomberg business flash. deutsche bank's turnaround got another boost in the second quarter. the german lender reported the biggest gain in fixed income trading in almost eight years, boasted 39% from a year earlier. yet to a biggest blow european bank from the coronavirus pandemic. santander took a 48 billion dollar impairment due to the health crisis. something economic conditions forced the spanish bank to cut its goodwill on past acquisitions, even before they began to make -- the pandemic, santander had the largest of any european bank. and falling after second-quarter results, analysts say the british bank is cautious. that is your bloomberg business flash. tom: thanks so much.

a data check today is really interesting. we have futures lifting here. it will be the tech soiree later today. paul sweeney is going to start by -- to stop by and make a smart on that. francine mentioned gold, 1974 per ounce. there are different gold quotes. one a uses comics gold in america. dollar weaker. moments ago, euro neera breaking out to new -- euro-lire breaking out to new lire weakness. francine? francine: i am looking at stocks trading. the decision from the fed later on, banking stocks, i'm looking at barclays, which had bad loan provisions that exceeded market estimates, reporting a historic loss. gold is close to its record $2000 an ounce. bitcoin is steady just above

1000 as at the assets are taking a breather. and west texas oil steady, barrel,uch near $41 a amid expectations for crude stockpiles. we will have a look at that. we have hong kong covered. we have the gd fee -- the gdp figure early on. worse than expected. tune into bloomberg's special on hong kong, called "hong kong on that airs throughout the weekend. this is bloomberg. ♪

>> this is bloomberg surveillance. deutsche bank has its biggest

gain with 16 trillion dollar figures and we have been speaking to their chief financial officer. >> we are pleased with the performance and our investment bank which is up over 52%. within that we have trading businesses that are in rates, affects, and emerging markets and are up significantly year-over-year. in the rates context, we have performanceour year-over-year for three straight quarters. very pleased with that performance. part of it is participating in the better market opportunities that have existed in the second quarter. we expect a normalization of that. you need to remember that in our toe we have been working stabilize, grow the franchise, and recover market share. we are pleased to see that underneath that outperformance

in the market environment we have seen really good franchise stabilization, traction, and an in client flows. we think that bodes well for the future. >> expecting slightly higher revenue for the full year, is that not too conservative now given what we have seen in the first half? normalization a of the first half, but i think an improvement on last year's second half. especially in our businesses where a year ago we were going through a restructuring and there was uncertainty around some of our people and franchises. with that behind us we see momentum in the core business and would like to see a second-half performance well ahead of last year, but we will see how the conditions evolve. we are in a period of real uncertainty, while that has led to revenue opportunities it can also lead to -- looking tocurrently

see if there are any parts that are worth acquiring. so far, do you like what you have seen? >> i will speak generally. i don't want to comment on specific events in the marketplace. payments is a big business for us across a number of segments. a veryporate bank is large payments provider globally. investing have been in merchant services capabilities, and will continue to pursue that. as we see opportunities in the marketplace we may well look to accelerate that growth, but it what have to fit well with we do end to be additive for shareholders. we like how we are executing on that organically. we are able to do a lot in partnership. a few days ago we announced an

investment in a company that we are pleased about, it does supply chain financing and capabilities. it adds to what we can do for our clients, sometimes in partnership. we are pleased with the opportunities and prospects to grow our business. >> does that fit the pattern? >> merchant services is a business they were in, and is one where we feel there is room for us to grow, but i don't want to comment on any specific developments. tom: the gentleman from deutsche bank, smart conversation with the head of our german bureau. this is a real joy. andou come out of college you get to work with a giant, that is cool. came out of oxford and had the with him,of working he was excellent in parliament.

he has taken that experience and leveraged it forward in the banking and securities analysis business. he is the head of all there research. like working for sir edward? ronit: it was a great experience. i was 21 years old right out of college. i didn't know what i wanted to do in terms of my career. i did not have a grand plan. i saw an ad in the newspaper and applied. tom: to our american audience the only equivalent i can think of is the privilege of working with john quincy adams. let's talk about european banking. i have looked at the 10 year and 20 year record of these disasters, do they care about the shareholder? ronit: yes, they do care about

the shareholder in the sense of management. the senior leadership of these banks do care about the shareholder. the industryd in juste mid-1990's, that was about the start of the revolution. if you went back to the 1980's you could make the argument that most european banks were run not for shareholders. start 1990's you saw the of the shareholder value revolution in europe. since the global financial crisis banks have to handle many things. i would hate to be in their shoes, being a manager can be complicated. a combination of factors like interest rates, and the lack of growth with regulations has burdened european banks more than their u.s. counterparts. onit, does covid-19 change that? just because of the level of interest rates? is there a slightly more level

playing field between the u.s. and europe? ronit: yes and no. it does level the playing field in the sense that when you look at expectation changes on share prices, share prices for the u.s. banks on aggregate for the last few months have moved similarly to european banks. europe did not have -- the euro did not have many downgrades from interest rates falling as they did in the u.k. or the u.s.. the problem for the eurozone banks, they are all catching the proverbial economic flu. you are starting with pre-existing conditions in europe, a much weaker position compared to scandinavia if i can detach them from europe, and the u.s.. the euro zone and the u.k. goes into this pandemic with returns

similar to japanese banks. you get hit by your relative weakness, that is what hurts you, pre-existing conditions. aboutne: we talk a lot possible mergers and acquisitions in banking. how close are you to getting something significant across the border in europe? ronit: there has been a definite increase in the talks, specifically talk from policymakers. on a morering this repeated basis from ecb and frankfurt. m&a,u look at what drives in the bank sector it normally happens when managers are confident and have a clear view, a bullish view of the future. you can also get distressed acquisitions and consolidations, we have seen a few of those particularly domestically.

m&aheyday of european banks would be 1995 to 1997 and ending with the global financial crisis in 2008. we saw some very bad acquisitions. late 90's m&a in the and late to thousands, banks were looking at europe and a massive single market being formed and they wanted a share of that, cross-border in particular. there was a lot of domestic consolidation and bank ceos were being buoyed by growth. challenge in going into covid was there was not a lot of growth in europe or balance sheet grop growth. it is much harder to be bold about the future when you are making 5% or 6% r.o.e. three pandemic.-- pre- francine: he stays with us and

we will talk more about the ecb recommendations on dividends. -- is ritzy ritika: mitch mcconnell has drawn along -- drawn a line in the sand with his new stimulus package. has bogged down talks between president trump and representatives from the democrats. nancy pelosi says it shows mitch mcconnell is not serious about a deal. mixed news on the coronavirus, florida reported a record number of deaths, but new infections slowed down into state grappling with outbreaks, california, and arizona. the positive test rate in texas is the lowest in months. the trump administration and the oregon governor's office reported they are in talks about pulling federal agents out of portland. the state would have to beef up law enforcement in return.

there was talk of sending more federal agents to portland because of protests. will pick his he vice presidential nominee next week, he told reporters he would let them know as soon he does. he has pledged to pick a woman running mate. he said the group of candidates includes four black women among others. global news 24 hours a day on air and on quicktake on twitter powered by more than 2700 journalists and analysts in over 120 countries. i am rid of could goof the -- tom: this will be interesting. the ge chairman and chief executive officer, danna her up roughly 30% and ge down roughly 30% in the last two years. the stocks are going in different directions. an update on general electric. this is bloomberg, good morning.

♪ this is bloomberg surveillance. banks to freeze dividends until 20 21, an extension of the march move to hold payments until october. the ecb says its request has kept about 30 billion euros of capital in the euro area banking system. ronit, great to have you. when you look at the ecb

recommendation, i don't think banks are 100% obliged to follow it, but why should they? ecb or youre national regulators says you need to do something you tended to do it. in terms of what they said, it is not a big surprise for the markets that the ecb said no dividends or no tax on returns for this calendar year. this was expected by most people in the stock market. the swiss and american regulators have slightly different views, but it's broadly the same. capital return is limited by swiss banks and u.s. banks and is off the table for european and u.k. banks for this year. next year is a different story. is syntaxwheelhouse

-- how far behind we were -- thehe pandemic and in digital disruption that you write about, how far behind is the united states? , because of its scale has everything. there are parts of the u.s. financial services, particularly the tax on market side and the b2b side that are world-class. there are other parts of the u.s. financial system similar to the u.k. that have first mover disadvantage. a lot of what we grew up with in terms of consumer finance, atm's, credit cards, those all got created in the u.s. and the u.k. in the 1950's and 60's. thefirst atm, london and u.s. will fight over who had the first one. when we shifted from that era to

the current digital age, the u.s. and u.k. already had a lot of these form factors. you go to china and india -- you go to pay with your phone. that is why the u.s. in some ways is behind. tom: too short of a conversation, we look forward to seeing you in london. global head of bank research for citigroup. caroline hyde will be driving our conversation, scott minerd to join us with guggenheim partners. stay with us. this is bloomberg , futures up five. ♪

♪ is the first major antitrust investigation the congress of the united states has engaged in 50 years.

people antitrust is designed to address is economic coercion, to address that these large technology platforms are behaving like monopolies. facingantitrust issues amazon are different than those facing apple. zuckerberg will get the majority of the iron and bezos will get the majority of the praise. i think cook will stay out of the way. have monopoly power you have to have regulation. couple of the next years we will probably get closer to it than we have ever been. >> sometimes i get negative opinions about apple having too much control over you. i thought about this one. what is going on right now with antitrust, i take apple's side. isthe use of the app store

forcing developers to pay a ransom of 30% or they are denied access to the marketplace. this is 30%, highway robbery. getting you guarantees, protection, and security in the apps you can download. when you look at what happened in the android world, i don't reject that at all. >> i can't think of another industry as large as this industry where one country has a 93% share. i think google benefits from the fact that it is not an easy business to understand. that google and apple will stay away from the tane wreck -- train wreck and praise. why what you saw there is we do bloomberg surveillance and why we do bloomberg. there is an extraordinary set of conversations on technology. now, heeney joins us

rarely gets up this early because he is waiting for bloomberg surveillance at 9:00 a.m. to provide tech wisdom. galloway onm from the market share of google. you and i remember standing at park avenue a million years ago when google's market share was 52% and they would never get to 56%. all of these tech companies have grown up, is it time to admit their monopolies? ronit: -- paul: these tech companies have become so important and everyone's daily lives in terms of consumer behavior. they have become the stalwarts of the stock market. months youst 12 think about the performance of the big five or six names that we talk about, all of these big tech companies and how they have dominated the stock market. the interesting thing for tech investors is the u.s. and federal government has rarely

taken a regulatory hand to these companies. it has really been the europeans that have regulated or tried to regulate big u.s. tech companies going all the way back to microsoft 20 or 30 years ago with their software. in the last couple of years we have seen more and more u.s. regulatory oversight and it's a question for tech investors. of big the beginning u.s. regulatory oversight of tech companies? tom: they are all at the hotel in the same corridor where they invented the phrase lobbyist. these guys are up to their eyeballs in lobbyists in washington. do these four guys and their brethren, have they simply paid off washington? paul: you are right, they have stepped up their lobbying efforts over the last five or seven years. the real question is for investors in these tech companies. do i need to worry about the chance that some of these

companies may be broken up? that's the big issue. you don't have to worry about them with further acquisitions. you have to worry whether the existing companies could be broken up to some degree. i think most investors today if you look at the stops they dashed stocks -- stocks, they are not concerned about that. the question for big tech executives and investors is, is this theater or something substantive beginning with these hearings? francine: how would that change under a biden administration? interesting, you think about the trump administration laissez-faire and deregulatory across a whole host of industries, but here they are being called in front of congress. in axpectation is democratic administration that perhaps the regulatory constraints would be even more pronounced here. the investors feel like

u.s. is not in a position or expectation ofhe significant regulation of big technology here. you look at the stops, most of them hitting all-time highs here despite the pandemic and the impacts on the market. are telling me that we don't think regulatory risk is that dramatic for these big tech companies. tom: thank you so much, we will see you at 9:00 a.m.. we have much more coming up, fed decides at 2:00 p.m.. then we have the tech hearings as well. they will show up well dressed. alphabet, i amk, sorry it is google and apple. that starts at 12:00 p.m. today. morgan stanley, must watch, must listen.

up 13, the vix coming in 25 point 23, the turkish lira cannot get out of its way. strongaker dollar and a -- a weaker dollar and a stronger yen. francine says i have to do gold, $1972 an ounce. we have just more coming up. alan zentner with a good important update. this is bloomberg, good morning.

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executives will speak to congress, maybe they will listen to congress. their combined market cap is 22% economy,he american they a 1.1 million people. sought on instagram, then i searched it on google, i ordered on my iphone and it will arrive in a cardboard box. the dollar is weaker today. s&p more, the productive than tuesday. senator mcconnell going in search of common sense. this is bloomberg surveillance from new york and london, francine lacqua and tom keene. at 2:00 p.m.,d technology executives at noon, what is going on in the united kingdom? kingdom: the united this morning announced it will build up its covid vaccine supply so we