♪ >> good morning from berlin. this is daybreak europe and these are today's top stories your u.s. stocks, hit hard as a s&p suffers the its steepest drop since june, asian equities drop as futures point to declines. market jittersrg are no surprise considering corporate valuations and the

close proximity to a presidential election. we will hear from him throughout the day and the focus will turn to the jobs report. after u.s. unemployment claims figures even this reading of the labor market we will be joined by larry kudlow from the white house for his reaction. let's get to our main markets story. u.s. stock futures continue their slide after the main gauge clocked its biggest plunge in three months, tech shares took in a selloffeating that knocked down the highest flyers. to put it all in context is dani burger. $750 billion wiped off the nasdaq, a painful day especially for a lot of the retail favorites, like tesla, falling down. let me show you how this breaks down the chart. i want you to concentrate here, the nasdaq composite versus the

s&p and the equal weighted version. you can see most of the past month on the way up the nasdaq leads. the green day is the biggest so far. this little chunk at the end of the chart, you can see the biggest chart is the nasdaq falling 5%. equal weight in blue, does better than the stock market as a whole. the tech leads as well as it did to the upside. you can ask why is this happening. --to be that tech evaluation people coming back from summer holidays, deciding to take profits. the pain continues today if we look at the next chart. see futures down nearly 1%. reprieve.ting no while the nasdaq is falling, havens not doing a lot which shows the pain is concentrated. let's go to hong kong. precisely what you just

mentioned. while the price dislocation is mostly in tech and within the toh space, you're not ready -- havens. cranfield, wemark asked if this was tech, it might even be tesla. that being said we are coming out of the lunch break in hong kong. look at the big tech names especially the chinese tech names. very big price drop. while you are getting this, it is similar to what we saw in the u.s.. the silver lining, you are looking for an entry point by the dip scenario, you are getting one right now. overall here in hong kong we are down the most on a weekly basis, the biggest weekly drop. the other part to the tech story which i alluded to is more

directly a function of the news we broke yesterday in terms of looking at semi conductor industries which is why you are seeing a day two in asia. this plays into the philadelphia ; dr. index. here is what asia looks like. you are getting a lot more in terms of magnitude on the tech heavy internet heavy indices. more on those when it is cyclical. you look at havens across asia whether it is dollar-yen, asean, also gold, we are not seeing the same sort of bid for those assets that we usually see in terms of extreme market dislocation which bodes well when you look ahead to the weekend.

>> joining us to talk more about this top story is sophie, multi-asset shortages at socgen joining us for the hour. what do you make of the big slide in tech stocks? apple lost over $170 billion, almost half of tesla's total market value. sophie: we heard so much about this this summer. roundk you have this check that -- back from the summer, back from vacation, when you look at your portfolio and risk, i don't think it is absurd to think some investors will find it -- just take some profit. the thing that is important to keep in mind is investors positioning did not show any indicate-- which could

it is omitted. matt: you don't think this marks rather than the jitters at the beginning of september, a turning point in the rally? sophie: i don't think so because we are in a low interest rate. versus% higher pre-covid-19. the cyclical hasn't happened yet. so all of this, i think it is like -- rather than the start of the downtrend because all of the conditions are met for another -- in terms of valuations the s&p 500 is valued at 26 and times the forward

earnings estimates you do think earnings estimates will continue to come down? sophie: if you look at earnings shape -- his what it could push valuation higher as we mentioned, which usually happens at the early stage could push notable extensions. worldwidef valuation it could look at this. if you take the [indiscernible] s&p not as expensive. matt: i heard talk from some big that pet at -- bulls values are not the way to look

at stocks. you agree we should be looking at them in a different paradigm? sophie: totally. something we are underestimating. , howis what it is so low during that portfolio when you trillion [indiscernible] i don't think it is absurd some investors will draw into other asset classes. qualitynd [indiscernible] benefit a lot from it. who has lots of growth and quality is basically u.s.. that is why aside from the devastation of the u.s. dollar we have seen over the summer, the diversification out of u.s. businesses haven't happened yet. matt: sophie, you are going to stick with us. she is our guest cohost for the

hour. i want to get to first word news. reporter: presidential hopeful joe biden visited the wisconsin yesterday and tried to draw a contrast with donald trump who visited earlier. he had a phone conversation with , and promised sweeping changes if he is elected in november. this nation is ready to make progress on racial justice. facing accusations of hypocrisy after speaking to it packed room of tory mp's -- a packed room of tory mp's. only 29 were allowed in because of social distancing. minutes after it finished, the prime minister's office said gatherings of more than 30 people are illegal. facing -- to is drop support for the nord stream 2. tensions are rising between

berlin and moscow. wasany says alexey navalny poisoned. the kremlin has said this is an emotional call. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ matt. matt: thank you. laura wright with your first word news. we will hear from billionaire investor bill ackman on the current market volatility and thus still high -- the still high valuations in the u.s. this is bloomberg. ♪ ♪

matt: this is bloomberg daybreak europe. i am matt miller. bill ackman of pershing square capital management told bloomberg the market uproar we saw yesterday is not surprising giving the current uncertain landscape and high valuations the u.s. is facing. end, iteginning of the is not, but we are coming on one of the more uncertain times in america's history. we have a divisive presidential election coupled with a virus that has had a huge impact on the economy and the markets have been strong since the third weekend in march. it is not surprising. valuations, technology landscape, got into some extraordinary levels. i think it is not a surprise. i don't think it is any indication of the beginning of the end, but markets don't like

uncertainty. we have an election in 60 days where it is a tossup who will be the next president and the policies, whether it is trump or biden, what it means for the country and corporate america and taxation. these are uncertain issues and animating markets. >> you have said it would not change your investment position a matter which person was to be president. are you changing your response on that now? will there be different policies if there was a biden administration rather than a second trump term? >> i don't know if it is completely knowable. biden suggests a more moderate as opposed to more progressive democratic administration to the extent biden is sort of the winner. i think they will have different policies and approaches towards taxation in the business, etc.

but biden and kamala harris are more moderate instead of biden and warren. >> i want to push you on valuations because you mentioned how things are maybe overvalued. downign down 12%, tesla 8%. is that closer to the real valuation for these companies or a fair evaluation, or could there be more to go? >> i don't know enough about those businesses to say whether this is fair or not. when i speak about valuation, the more highflying companies, a lot is predicated on what will happen in the future. what is interesting is you have a world with almost 0% interest future iscount the very low. companies which are growing discount rates, gets a very high valuations.

the problem is small changes in your assumptions can lead to a different outcome in terms of what a business is worth. those small changes can relate to confidence in what the future looks like. it is hard to predict when you have a certain political environment and the unheard -- inherent uncertainty about the virus area they said to prepare for possibly distribution of a vaccine november 1. if there is a real vaccine distribution in scale before the end of the year that has a meaningful impact, if there isn't one, that has an impact as well. it is not known today what the outcomes are. you factor in your risk premium should go up when there is more uncertainty. the risk uncertainty relates to the discount rate. the risk premium you discount the future. many rapidly growing companies you can't justify the value placing a multiple on next

year's earnings which is the convention for many mundane businesses. you have to make certain expectations for the profits to grow at a rapid rate to justify many of the elective values. -- collective values. that leads to more ultimately. -- volatility. pershingl ackman of square capital management talking to vonnie quinn about valuation and the justification for those we had seen in a lot of indexes still seeing. 26 times forward earnings expectations on the s&p 500. ahead of the jobs report, bloomberg economists expect gains to continue. at a slower pace low. employers are predicted to have added 1.3 5 million workers. we asked our guests what they think. janet said recent labor market

data suggests the pace of improvement has slowed. dominic from macro hive says participation could have increased in august. we expect 1.6 million increase in nonfarm payrolls. and this person says the number is likely to come in close to consensus, up 1.5 million. sophie is still with us. what are you looking at for payrolls consensus? 1.3 5 million, but the whisper numbers could be higher? sophie: we are [indiscernible] with -- it is in line with what you mentioned previously, that the figures are going to slow into next month as a big chunk of the reopening and

the v-shaped recovery has passed behind us. we have to look at how gains were going to -- are going to progress versus dp gains. i think more uncertainty from investment standpoint is the direction [indiscernible] an the direction would have l shaped recovery. that would give you an idea of equities versus bonds. what do you think about the measures eating put in place by the fed to try and keep jobs, support the jobs picture? as those run out and companies get ready to let workers go, are you concerned we could see the numbers in the months shortly before the election drop? sophie: ahead of the election i think what the president would

want is things to go smoothly so rocky waters for him to be reelected. from here to the election it will be very hard to have any negative news flow that could have impact on either gp figures, soft and hard data. ofad of the election, a lot complexity. having the correction because of the jobs data and the incoming data i think ultimately our top of my mind. matt: do you think we will see another aid package from congress, and how important is it to factor that in when you are looking at asset allocation? thate: we heard the fact there might not be an extension benefitunemployment

could push people to go back to work. i think it is important to keep in mind. i think more globally having some fiscal tightening in the next two years in any developed country is not something i have looked at. no one should even think about it. i think policy should remain quite dovish either from the fed or the average inflation targeting but also on the fiscal side where all of the competition, risk assets have to perform well in the next six months. and excludes some fast delay,ion in case of a election, which all of the -- have a preference for liquidity versus bonds. because of the zero lower bound,

they are not attractive and have this cemetery because of -- keep your preference. we will keep you with us a little bit longer. she will stay with us. newng up ahead of the ecb's forecasts, economists make their predictions. we will discuss that. this is bloomberg. ♪

matt: welcome back to bloomberg daybreak. we are looking at futures that

are pointing down this morning in u.s.e big rout stocks yesterday. ahead of the europeancentral bank's new forecast, -- european central bank's new forecasts, it is expected to keep its outlook unchanged and step up crisis response later this year. this comes as germany reports factory orders for july. foreign demand expected to recover, remaining below february levels. those numbers coming out at 8:00 a.m. our time. sophie from socgen is still with us. what do you expect from the ecb? how important is it european central bank continues to support this market? sophie: it is quite important because you have this recovery and the ecb on the other side. worked.so far it

when you look at the data between -- it really indicates the sophistication out of u.s. dollar and potentially into the euro, benefiting from this diversification. going forward i think what we want to see is diversification out of u.s. liquidities -- equities into european equities. short-term it is assured the position of the euro could play in the headwinds. think about what drove the strengthening and that is the most important part to keep in mind. all in all it is good signs for european assets. matt: we see the euro on the screen 118, should that be a concern for christine lagarde? sophie: for now our fx strategists think it is not. you need to go 120 for it to

start being a worry. from an asset allocation standpoint, the fact we have than looking at this for a while , it makes sense. it is something we would continue to do. more importantly analysis with the recollection is low euro -- and it could be one of the signals as we go into november. still got a lot to talk with you. there are expectations for a better jobs number today. how fragile is the underlying recovery in the united states? we look at how food poverty has worsened in america during the pandemic. this is bloomberg. ♪

matt: good morning from berlin. i am matt miller. these are today's top stories. u.s. stocks hit hard as a tech sends the nasdaq down. asian equities fell and now futures are pointing to even more declines today. marketkman tells us

jitters are no surprise considering corporate value and the proximity to a u.s. election. we will hear from him throughout the day and the focus, we will turn to the jobs report after u.s. unemployment claims figures gave a mixed reading of the labor markets. we will be joined by their he kudlow from the white house. as we said, stocks futures continued to slide both here, in europe, and in the u.s. after the s&p 500 clocked its biggest plunge in a few months. tech shares took the biggest meeting in a selloff that knocked down the highest flyers of 2020. here to walk us through the market is dani burger. dani: this is a tech heavy selloff. it looks worse than it is because indexes have gotten so highly concentrated. this is a good chart. i want you to focus on the green bars, the nasdaq, compared to

.he equal weight s&p in blue if you look at the updates, it is green, the nasdaq coming out on top. it leads on the way up. yesterday it leads on the way down. this is a fall of nearly 5% for the green bar. the equal weight drops more than two. the s&p 500 3.5%. it was concentrated in the names we have seen, retail interest. zoom took a big beating, all of them on their way to a correction. are we going to get a correction in the nasdaq? futures are still declining, down more than 1%. we might be on our way to a correction, but is it a bear market? we are not on the way yes. one way we can tell, the final church i have is what havens are doing. they are not budging.

you look at the s&p 500, futures continuing to fall. 10 year yields staying steady. the fact we don't see a bit to that asset, to gold or the dollar really shows -- this is a tech issue and story. we have not seen it become more widespread which means the risk off is in tech. matt: that is one of the most interesting aspects, you don't see the money going in to havens. i wonder where the losses are flowing. thank you very much for that .ook at the market rout the u.s. is expected to see an improvement in the number of people back in improvement -- employment when the numbers come out in august. the economic recovery is still tentative and the situation is in america.y people during the pandemic food poverty in the world's richest economy americanup with .1 of

households reporting they have not had enough food in a given week. joining us is jennifer, our quicktake reporter out of new york area the situation in the u.s. is very dire. walk us through it. >> while the jobs report may signal many people are managing to stay afloat, the recovery is presenting on even for many. n for many.ng uneve what we know as you mentioned about .1 of american households have reported not getting enough food. that number is the highest it has been since the government started reporting this data in 1995. it is expected to grow. the irony is we are in a time when there is an excess of food supply. farmers are having to make

difficult decisions based on their situation about what to do with the food. many americans are having to for the first time go and rely on food aid and food banks to get their food. not only that, they are dealing with unemployment, lower wages and reduced hours. like we have seen, this food crisis was exacerbated on racial and minoritiesn making up the majority of those disproportionately affected. happening throughout the summer where the country is debating systemic inequality issues. as this pandemic worsens, it will become more difficult for underserved communities, many of whom have been dealing with food insecurity for several years. we are watching the u.s. closely, massive country. what about the rest of the

world? front is even more concerning. 132 million more people are expected to go hungry by the end of this year. the number is triple that of anything we have seen this century. not only that, oxfam is predicting more people will die daily this year from hunger rather than covid-19. and the pricesy going up in developed and developing worlds, a lot of countries are facing a dire issue. here is what one u.n. director said. is you tied people over on a temporary basis with a basic income that comes in as part of a fiscal stimulus package, then you use that to really bring in and introduce a

,onger-term social safety net employment guarantee scheme, health insurance schemes and other kinds of movement to a long-term program. otherwise people are going to starve before the virus gets to them. >> the u.n. is expecting this to be a long-lasting issue. we have not turned the corner on this pandemic. with millions of people not being able to afford a healthy diet, what will become an issue is malnutrition and obesity as a result in many of the countries you're seeing there. we have seen mobilization of food charities banding together to help some of those most in need but the need surpasses what they have been able to do areas -- to do. matt: our bloomberg quicktake reporter on the hunger issues

that really bloomberg has been raising the alarm about. let's get to the first word news. let's go to laura wright. andrter: democrats republicans working together to avoid a government shutdown before the presidential election. sources tell bloomberg that the treasury secretary stephen mnuchin and nancy pelosi made this during a phone call. they don't want the stalemate to hold up a vital stopgap spending bill. substantial fiscal aid will be needed to ensure the economic recovery. that is according to charles evans at a virtual event. he said the stalemate is a significant downside risk to the economy area he is downbeat until a vaccine becomes available. france may extend its furlough program beyond the end of 2020. the minister indicated the government is ready to spend more than 100 billion euros.

he said if the crisis gets worse and they need to do more, they will. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt: thank you. laura wright. high inflation, the currency at a record low and tensions in the mediterranean. we will focus on turkey and the lira. this is bloomberg. ♪

welcome back to bloomberg

daybreak europe. i am matt miller in berlin. we have had an incredible stock route in the u.s., and we will be covering that after the nasdaq fell 5%, the s&p 500 dropped 3.5%, stocks in asia fell and futures are down here in europe as well. tensions between turkey and greece continue. a small island becomes a flash point in the competing claims synergy resources in the mediterranean. we spoke to the foreign affairs minister for turkey. he said the nation is ready for dialogue with greece. island has a critical place in the eastern mediterranean issue. bases itseece arguments on this very tiny island. this island has the size of 10

square kilometers. only two kilometers away from turkey, from my hometown. 580 kilometers away from the mainland of greece. a is ridiculous to claim 40,000 square kilometers maritime jurisdiction area for this very tiny island. this is the reason of the problems. when i explained this to all my colleagues including the colleagues from european union, the e.u. member states, they all agree with me. some of them are loyal. they are telling me turkey is right. if turkey is right, why are you giving unconditional support to greece? that is why greece is very counterproductive and not very constructive. that is why we have not been

able to reach an understanding. -- while of course we show if the president accepted the proposals of angela merkel and we stopped our activities , butrarily of course greece signed the agreement with egypt. and this is the sign of the greece actually real aim on the issue.issue -- agean turkey has been ready for to medic -- diplomatic dialogue and to sit with everybody around the eastern mediterranean and to negotiate for equitable share. but greece is not ready for this because of this claims at the eastern mediterranean. on the other hand, this island

has a demilitarized status established by the peace agreement. agreement. the development of any troops is another indication of actually behavior inspecting the region. frankly speaking as turkey we made it very clear that we will not allow such provocations at the eastern mediterranean or in .he agency -- agean sea greece will be the one suffering most. this is the message we have been giving also. this is another threatening language. this is actually a message that instead of provocations, greece should be open for a dialogue

with turkey and with other countries in the region. turkey's foreign affairs minister speaking to bloomberg. the economic backdrop is a real concern as the lira slides to its all-time low. we have seen inflation andinuing to rise in turkey at a striking level, it is a concern for the citizens of that country, financial markets. we will be watching this situation closely. the world's richest tech moguls saw billions of their own dollars evaporate from bank accounts yesterday. we will have more on those losses. they are still very, very rich. this is bloomberg. ♪

this is bloomberg daybreak europe. i am matt miller. u.s. stocks futures are continuing their slide after the s&p 500 clocked its biggest plunge in nearly three months. tech shares took the biggest meeting in a selloff that knocked down the highest flyers of 2020. here to walk us through his dani burger. dani: this is a chart i have been staring at all morning. i am fascinating -- fascinated why we got the big selloff. it led the rally for the past .ear since the market bottom and the nasdaq which is the green bar here led the selloff. valuation jiggers have been in

this for a while. traders will government decided today is the day but i'm nervous about how expensive tech is. it is a perfect storm. we enter september, august volume is always low, people are away on holiday. perhaps investors got back and decided now is the time to take profits on tech. elevated when it comes to technology the. if you are -- technology pe. if you are talking to traders who have done just that move to cash, because of the rally in august. if we go to the another chart, what futures are doing when it comes to the nasdaq, we are still in a lot of pain, it is not using up at all, nasdaq futures down 1%. i want to go to another chart and show you what havens are

doing. nothing. they are not doing anything. you would think there would be pain. movementhe s&p 500, no for havens which this is really evaluation tech story that has not become more widespread yet. you also don't see huge gains in gold, didn't see a big jump in the yen, gold is less than 1950. ,y question which you answered when you told us you talked to traders, where are these sales going? cash is an option investors are holding open. dani: it is. one thing i am hearing more of, you can see it looking at etf flows, one area we have seen a lot especially in europe are value funds. if you say this market looks rich, i want to get out of tech,

out of zoom and apple, people are starting to buy the value sort of names. leading up to it, value did see a hint about performance. a lot of the pain we saw was concentrated on the retail heavy . if we have these retail names that are starting to come off of tesla,ket like zoom and this might not move into a value etf but there are other investors doing just that. matt: it is an interesting dichotomy. you have investors putting some of their money into value funds and the other into specs. it is a pretty crazy fork in the road. thank you for joining us. dani burger on the markets selloff we will be covering for you. that was a huge reversal of fortunes for the world's richest tech billionaires as u.s.

equities tumbled the most in almost three months. they shaved $44 billion off of their personal wealth. joining us to talk about that is richard mcauley. , note the function rich go named after you obviously. walk us through the losses of the men and women who top those boards. reporter: it is really the heads of the tech companies that suffered the most in yesterday's declines. out of the top 10 tech titans, fell thes' net worth most. elon musk lost $8.5 billion. that is all on paper. amazon and tesla are seeing their share price surge this year. amazon's value gain has been explained because it has benefited from people shopping from home thanks to the

coronavirus. tesla share prices are up well over 500% despite not having a particularly exceptional year. good year but nothing drastically different than any other previous tesla year. it has been so monumental elon surpassed $100h billion. tesla looks more like the kind of stock gravity was about to bring back down and also tells the story of the tech gamble and so many people have been piling in for that sector it has become a question of when we see the correction in tech stocks as opposed to whether we see one. you just saw on the landing page the change in one day wealth is huge for especially jeff asus, elon musk

-- elon musk lost almost as much, $8.5 billion. gates and zuckerberg did not poorly. the only person on this page that made money yesterday was bernard are no. he is at least not to my knowledge involved in tech at all. is this beginning of a run -- market correction? was it just early september jittery, getting close to the presidential election or is it a turn of the tide? it is tricky to know but certainly anticipated much lower for the tech sector at least. the ethics investment called it a reckoning. more than thewas tech sectors.

on the s&p 500 sectors across the board, they were down somewhat. it is curious even the value sectors or those that might have benefited from a rotation away from tech growth, even those sectors were not looking good. one thing i found interesting was comments from oppenheimer. they pointed to indicators suggesting retail investors have been piling into the market in recent weeks in massive volumes. now there has been a shock perhaps you might see some of the smaller retail traders exit the market. that would lead the fundamentals fairly intact, looking more rational. we will see if that is the case. one stock that is always tricky to gauge will be tesla. as we have reported before, you never know when robinhood traders get together on a message board. elon musk might be soaring

again. matt: richard mcauley out of hong kong, the voice of daybreak which i listen to every morning. you can listen to him, his sort of podcast episodes. we will be right back. will be right back.

♪ nejra: good morning. welcome to bloomberg markets: the european open. [no audio] edwards in london alongside matt miller in berlin. matt: