just one thought on the s&p and evaluation. bp cut the dividend yesterday. now, biggest obstacle to the s&p 500, this is one a reporters row yesterday. -- wrote yesterday. they are cutting dividends by the most since 2009. i was going to say does that matter. obviously the market, the index does not seem to be bothered. that, myl of risk is allocation in the united states of america? >> from the original perspective, but in terms of the shareholder payout, it is for sure all over the world you are going to have buybacks. japan, it is more of a

dividends haven. the fact we have 5% combined yield in the u.s., 3% buybacks, this is cut by half this year, you are still going to be better off and having some real yield in your portfolio. the yield environment is still raging. to not beo make sure penalized by the slow interest rate environment. great to have you on the show. let's get the first word news. massive explosion rocked the city of beirut. the video we are about to show his intent. the blast erupted from lebanon's main port, killing dozens and injuring thousands. it blew up windows across the capital and was heard from cyprus. authorities say it was caused by explosive materials at the port.

they did not say if it was an accident or attack. the white house and democrats hope to have a deal on relief by the end of the week. says they disagree on key issues but seem to be moving closer to an agreement. any deal would not happen until next week. the u.s. and china are planning to assess their phase i one trade deal this month. discussions between robert lighthizer and the chinese vice premier will take place august 15. it comes against the backdrop of rising tensions between the two countries. in the u.k., lawmakers are urging boris johnson to be more open about travel risks associated with the coronavirus in a scathing report, the theittee criticized the way opportunity for summer vacation was tucked up only for restrictions to be imposed without warning. johnson has promised an inquiry into the government handling of the pandemic.

global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thank you very much. coming up on the show, reviewing phase one. a phase one trade deal. the u.s. and china will hold high-level talks to assess beijing's compliance. that is next. this is bloomberg.

nejra: this is "bloomberg daybreak: europe." the u.s. and china will hold twos on or around august 15

discuss beijing's compliance for the trade deal in january. trade representative robert lighthizer and chinese vice liu heor -- premier will probably speak by video. manus: the white house and democrats aim to strike a deal on the stimulus package. treasury secretary steven mnuchin says they will try to reach an overall agreement by the end of this week. . nancy pelosi echoed those comments. and republicans would agree to an eviction moratorium. sophie, i want to jump off with the trade conversation. mr. trump had intimated -- i would like to quote people verbatim. the trade deal means less to him. the chinese have not delivered.

they bought 23% of what they were supposed to this year. it might not mean much to the president, but what does it mean to markets that this review continues with a tick arc? -- mark? >> the nation of tension between the u.s. and china is likely to ship. -- shift. we are focused on technology. you see the trade deal, china falling behind in terms of purchases. you can blame covid-19 for that. we believe that going forward it is going to be more focused on equity market with the deleting of chinese stocks from u.s. exchange. president trump is now lagging behind versus joe biden. less focus on tariffs, but more on the topics where he's going to be able to gain votes. nejra: with all the risks out

there, including this one, you say keeping gold in portfolios could still make sense. we are beyond 2000 on the spot price. when you say keeping portfolios, do you mean adding or holding onto what you have? >> it has already gone a long way. we are going to keep it. we think there is more upside if further deflation fears continue to kick in and you have further risk off. the dollar is not as much a protection as it was during the previous wave. having gold in a portfolio, adding more gold would make much more sense if you end up in your inflation fear scenario. level,than go at this gold miners with gdx would be really great.

we got your call fundamentally immigrant terms of japan and other nations relative to the u.s. when we were talking about dividend. i want to get a sense in terms of chinese equity exposure. i was thinking of the tech side, up 53% this year. 60% outperforming. i love this quote. gold, listen to this. flow, no earnings, no fundamentals, gold investors are like in disneyland, a magic kingdom you have to believe in to enjoy. do you want to enjoy the magic kingdom in china? do you have much equity exposure? are you driven to tech more specifically because that is where the outperformance is on china relative to the rest of the market? in the world of text, does chinese tech standup to you?

really the sweet spot if you have a cautious scenario in mind. it is going to perform well whatever the economy scenario. you have to keep on in portfolios and hold onto it if it is very expensive. optimistic,re more rather than buying tech, you would want to diversify your portfolio toward sectors that would make tech companies less attractive. in itself --nies ok. hello? nejra: thank you so much for joining us. reportsp, deutsche bank revenue that beats analyst estimates. opening.t the

this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." a lot of results coming in this morning. you started with commerzbank. manus: there is the rough and tumble of what they are saying about the appointment of the new chairman. saying for this year, commerzbank is going to report, it is due to the markets and due

to provisions. those are the dominant themes you want to walk away into the opening trades. a negative your for commerzbank. much more dramatically impacted for 2020. between 1.3 and 1.5 billion. second quarter profit, we should just reflect on this, 220 million, that was better than the market estimated. they loan-loss division lower than the market anticipated. versus 400 and 9 million. 409 million. it is sort of a tale of a quarter versus the year. i know you were breaking down the allianz numbers. on the face of it they are still not able to give guidance, and that is the bottom line. side, on the positive

they attracted new money from outside clients in the second quarter. that does blunt the impact of outflows. eurosrought in 23 billion in the period, customers pulled the most cash in five years. we are starting to see that money come back. what that meant is the second quarter operating profit did come in at a beat. 2.57 billion euros versus the estimate of 2.46. that is what we got, but the guidance is something we are going to be looking at. we will talk about it with the cfo of allianz. that interview is coming at 6:30 a.m. u.k. time. and breaking down the numbers from allianz is trying to understand, you know, the other side of their business is,

you and i love to talk about the pimco numbers, what's happening with yields. the reality is allianz is a huge insurance company. your risks and your outflows versus your income, the combined ratio on that side of the business comes in at 95.5, down from 97.8 quarter on quarter, of 97.7.n the estimate i think when you look into those , the asset management numbers, on the others, you have an operating profit of 640. even though you talked about the inflows out of the operating profit on the asset management missed the target. thanks very much to dan tillerson. he helps us with the flow of numbers. absolutely. more broadly, gold in a record balance beyond $2000 on stock

prices. green on the screen in asia. no direction for usn futures. a weaker dollar. the 10 year yield close to a march low. we will bring you the latest from lebanon.

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transfer your service online in a few easy steps. now that's simple, easy, awesome. transfer your service in minutes, making moving with xfinity a breeze. visit xfinity.com/moving today. manus: good warning from -- morning from bloomberg's middle east headquarters. i'm manus cranny. nejra cehic with me from london. the white house and democrats aim for a virus relief deal by the end of this week. bloomberg thels u.s. should help poor nations get vaccines. beirut rocked by a massive

explosion at its main port, killing dozens, injuring thousands. authorities have not confirmed whether it was an accident. anticipates a negative net result for the year. still up, we speak to the ceo of as it beatallianz for the second quarter on operating profits. revenue for the second quarter that beat the highest analyst estimates at deutsche's. they still see the full your billiono range of 3.5 to 3.8 billion euros. facing pressure from a certain demand created by the covid-19 pandemic coupled with higher costs for operating safe networks for their customers. great to have you with us on the show. can we get a little bit more

guidance on the outlook? the fact that we still see full-year at 3.5 to 3.8 billion euros. what is your base case for the rest of the year? you did come out recently with guidance that took you through 22022. for the second half of 2020, is your base case that we are seeing a v-shaped recovery? good morning. thank you for having me. we withdrew our guidance in april when there was hardly obviously any visibility about how the rest of the year would play out yet what we saw in the course of the second quarter was a resumption of growth. four out of five of our operating divisions saw a revenue growth in the second quarter. we were confident enough to reestablish guidance for the year 2020.

that assumes no super buoyant recovery in the second half of the year, but some form of recovery and we don't anticipate a massive second wave. in several countries, case numbers are going up again. locall, we have learned webreaks much better and have been confident enough to reestablish our guidance for the rest of the year. manus: good morning. welcome to "daybreak europe." that is quite a confident viewpoint of how you see the world. 10 you give us a complexion of how the world looks to you geographically? australia has gone into double locked down. if you can build on that narrative for us in terms of

where is the most demonstrable improvement and where is the worst? melanie: overall, it is clearly still a volatile situation. we have seen that case numbers are going up and indeed in some places like australia, we have seen an establishment of a new lockdown. what is important is a company's we have some structural growth drivers, which have shown a lot of resilience through the crisis, that has been spread across the globe. never express network. that is one of the reasons for our confidence despite all the volatility around us. i think the second element, which we have proven in the second quarter is our ability to

react in a flexible and agile way to the changing circumstances. for that goes to our people. runmajority of our people about 400,000 out there every day delivering and they couldn't go into home office. they are the ones who check our network operating. that gives me confidence for the second half of the year. a little bittalk more about the second half of the year in terms of air and sea freight volumes because they felt double digit in the second order. do you expect a rebound? if so, to what extent for the remainder of 2020? obviously, our forewarning division was one we saw double digit.

the market is heavily distorted, particularly the lack and demand coupled with an extreme shortage in capacity due to the grounding of passenger aircraft. that is really an unprecedented situation. it is traditionally more a b2b business, which is why the impact is quite visible. it is difficult to predict that for the second half of the year. i think we have to be prepared for depressed volumes to continue in forwarding for the rest of the year. there have been some encouraging signs, but it is still extremely volatile and hard to predict. is tost important thing secure capacity on the airfreight side to match with demand from our customers. ashave been quite successful you can see from our forwarding numbers. manus: what does that mean for

pricing and terms of the freight capacity you've taken out? the charges or the average charge presumably rises. talk us through pricing. we are trying to grapple whether we are in inflationary spirals as a result of corporate -- covid or deflationary spirals. talk us through the pricing. the mosti think distorted pricing was clearly on the effort side. demand was down, but supply was down even more. to extreme led pricing. in normal times, it is around $400,000. it went up to $1.6 million in the peak. the pricing was extreme to secure capacity. it has come down from the extreme levels, but it is far away from normal.

for us, we were able to play on the strength of our airfreight forwarding organization to secure capacity, then to find a reasonable pricing. i think the most important thing was due to our size, due to the good relationships we had with carriers, we were able to secure capacity for our customers and that is what we also still see as a very critical component in the third quarter. manus: melanie, rich food for thought in terms of numbers and the context of the business. melanie kreis, cfo of deutsche post joining us. to lebanon now. we should one you that this video is intense. massive explosion in beirut's main port. killing dozens of people, overwhelming the hospitals. authorities say it was caused by highly explosive materials at the port. they did not say whether it was an accident or attack. the casualty toll continues to climb through the night. sky news arabia but the number

is 78 deaths. let's get to beirut to our reporter on the ground. thank you for joining us. are we any closer to understanding the cause? president trump seems to suggest that it was an attack. any further clarity? hi. nothing from authorities here that confirms this is an attack. they are taking -- sticking to the original theory that this was 2700 tons of stored ammonium nitrate that has been at the port since when he 14. they are not very sure how this cup fire, if it did, and what happened. this is the general theory that has been circulated around. lost: ok, we seem to have dana. we seem to have lost dana in lebanon.

nejra: yep. we will get back to her on the latest out of lebanon. as she said, we still don't know the exact cause of that blast and that we just brought you pictures of. more throughout the morning. coming up, as holidays have gone on hold, profits have plunged for hotel empires. we will be talking about how hotels can survive. this is bloomberg. ♪

>> we have only taken care of ourselves. if we just add this with less than 1% to the bill, it is a

typical u.s. picture, where we show up strategically, humanitarianly, and help ourselves avoiding the disease coming back in a super effective way. nejra: that was bill gates, cochair of the bill and melinda gates foundation and microsoft cofounder. plenty more from that interview coming up through the morning. tourism has been one of the hardest hit industries during the pandemic. while lockdowns have begun to ease, the uncertainty has left many summer holidays canceled. accor's earnings took a major hit. it is in the hope they can come back from. joining us now is sebastien bazin, ceo of accor. delighted to have you with us. the last time that we spoke, you were quite optimistic in terms of being able to reopen hotels and also hire back anybody you have laid off. of had a first half net loss 1.51 billion euros and you plan

to cut 1000 jobs. is this as bad as it is going to get or is there worse to come? sebastien: if i knew, i would be a king. i simply don't know. do i believe the worst is behind us? absolutely. it has been gradually recovering. i hoped it would be faster. i don't see things worsening for me. the occupancy is back. domestic leisure is back. hotels.yees are back at there is a spirit of positivity. we have been resisting as good as expected. the numbers are not a surprise. my hotels have been virtually closed for the month of may, april, and june. now, the main thing we can do because the business is marginally back, but is

certainly on a good trend. manus: great to have you with us this morning. 2019 revenue will not come back. is that even realistic to think you will get back to that level? chunk ofality that a these hotels not going to come back? ?s that a reasonable assumption if so, what kind of numbers are we dealing with? sebastien: it is reasonable. it is a matter of taking your future in your hands. you will be missing some business future. -- business travel. there was a lot of business that we never had before. in france only, we have more domestic leisure business than we had last year. we target your clientele. probablyare going to

be having better activity. you have been talking about working from home, working from home or at the headquarters, there are a lot of new services we can render. wi-fi totaurants, provide access to workers no longer going to offices, but actually 10 minutes away from their home. working at the hotel. there are many sources of revenue you can have and target. nejra: yes, that working at the hotel theme is really interesting. i would like a little bit more detail on that. are you mobilizing that to the max now and are you actually getting kings to that effect? and if so, where in the globe? sebastien: it has been working very efficiently in brazil in são paulo and rio. we converted rooms into offices by taking the bed away. it is a question of offering

corporations through a subscription model the way for them to use the hotels of the network and 110 countries and offering that alternative to their employees where you don't have to go back to the office, but we don't want you to stay at home because you are too confined. we don't feel it is going to be deployed too soon. it has to go through those large organizations. i think there is something there to be tapped. we can't be blind. we have to act. manus: ok, i've just come back from greece. 50% of the hotels were closed. this gives me a sense that a lot of independent operators are going to fall away, they don't have your cash file. so you say make a in the domestic markets. will you actively look at opportunities in mainland europe? where is the most appealing location for you to pick up

value and new relationships? sebastien: certainly in europe. asia-pacific, indonesia, malaysia, singapore. as we speak today, we have catastrophic numbers. it is a time to be disciplined. it is a time to restore this company, it is time for me to finish the job. it took me four years. done ther really transformation of the corporation, which is why i'm 7000lly working, turning stones up and down and try to make the company simpler, leaner, more agile, and less complex, less fat. i'm focusing on trying to make the company ready for the future. manus: ok. we wish you well with the transformation. when you come to my part of the

world, some lovely hotel which i've had the pleasure of going to, i will join you there for a cocktail on the terrace. sebastien bazin, ceo of accor. quarter beatd estimates. we speak to the ceo -- cfo. that is next. this is bloomberg. ♪

has reportedz operating profit in the second quarter, which beat estimates. the ceo described to the pandemic has striking the industry like a meteorite yet it did see a real light in the pimco numbers. the firm attracted new money from outside clients blunting the impact of massive outflows in the first three months of the year. the man with the numbers from munich joins us now, giulio cfo.riol, allianz great to have you with us. we just spoke to the cfo of

deutsche post. she said the worst is behind us. as a meteorite1 hitting you. is the risk of a second shower of media rights on the horizon? or is it behind you? good morning. giulio: good morning. i would say you have seen our numbers, the second quarter was better. from that point of view, there was a stabilization in the capital markets. you see this also reflected in the inflows. ration also see the adjusted for the covid impact. below 1990 four. on the right side, you can see that it is that 3% for the quarter. from that point of view, we had a good set of results for the second quarter.

which is a good starting point for the second half of the year, but it is very difficult to say now what might happen in the second half of the year. you see the news coming from australia. outbreaks in are some locations near europe, the situation in the u.s. is still challenging, so it is very difficult to predict what the future might hold. arei would say that we doing pretty good based on what we saw so far. nejra: ok. great to catch up with you, as always. we know you have not officially released guidance for the rest of the year and you have just explained why, but last time we spoke, you did say that operating profit for 2020 would be significantly below last year. those were the words you used. i would now like to ask you, will you have an operating profit at all for 2020 or could you have a loss? giulio: no, we are going to have

for sure an operating profit. billionthat we have 4.9 for the six months. if anything is kind of stable, you should expect the second half not to be worse than the first half and it should be better. there is now no doubt we are going to add a sizable profit, we are going to have it be sizable, it is not just going to be higher compared to what we had last year, which was, by the way, a good year. we are going to had -- add a stronger performance anyway. manus: the inflows into pimco talk a little bit more about that. those come from? just some context. giulio: when you look at the flows, they are coming from the fixed income side. we see flows in multi-assets and alternative strategy. applies to pimco.

it is on the equity side. equity market that went up in the second quarter, but in total for the mutual funds industry, we did not see positive inflows. that was kind of an interesting trend to see. inflows for the industry on the equity side, not for us. all other strategies have performed nicely. from a regional point of view, we had positive inflows i would say across the globe. nejra: that is interesting. we have talked again and again about the 10 year real rate in the u.s. hitting record lows. how do you expect that to impact flows? do you expect there to be more flows moving into equities of away from bonds for the rest of the year? i would say that the trend of having very low interest rates might eventually

clearly push an appetite for equity. on the equity market, there might be some uncertainty, so from that point of view investors could be a little cautious in going into equity. from our side, we need to think about the fact that it is not just about clearly the level of interest rate, it is also about that spread that you get on top of that. i would say especially in a situation like this, and asset manager with expertise might make the difference. that is especially in this think pimco isi going to play very nicely. fors: thank you so much sharing your thoughts with us. ,hose inflows, giulio terzariol the cfo of allianz. that is it. annmarie hordern taking up space in london alongside matt miller.

that is it for us. we do it all over again tomorrow morning. if you are traveling to work, you know the destination. bloomberg radio. this is bloomberg. ♪

annmarie: good morning. welcome to "bloomberg markets: european open," i'm annmarie hordern in for anna edwards in london. alongside matt miller in berlin. a lot to digest with geopolitical tensions all around the world. potentially a stimulus deal out of the united states as soon as this week. matt: dinel