♪ >> good morning. i'm annmarie hordern. this is daybreak europe. here's what you need to know. >> i knew it was a big threat. at the same time, i don't want to panic this country. i don't want to say everybody is going to die! >> we make up 4% of the worlds population. we have 20% of the worlds deaths. we have 210 plus thousand people

dead. and what is he doing? nothing. the coronavirus features prominently as donald trump and joe biden fight for airtime, 18 days away from the election. global stocks struggled for direction as europe goes into reverse with increased restrictions. german hits records as they plan for a tough winter. and walk or talk? boris johnson will decide today if he will abandon brexit negotiations. it comes as eu leaders refuse to give a clear signal on prospects of a new deal. good friday morning, everyone. the focus is on the fragile recovery on thin ice as europe deals with rising infections across the region. they are reporting the highest number of new cases since the outbreak peak in the spring. france is reporting new infections.

london will move into the highest threat level, which bans the mixing of households indoors. on the other side of the break planning, while fiscal stimulus is elusive, midwest states are seeing a rise in cases. and the world bank chief economist says it didn't start as the financial crisis, but it's morphing into a major economic crisis. let's look at how we trade. we are struggling for direction, asian equities, the benchmark down .4%. we do see it firmer when it comes to the stoxx 50 and the ftse 100 features. in europe i want to talk about what we saw in the bond market. this is where the real action was. this is yesterday's close, so don't get too excited. but we did have money moving out of italian btp's, going to german bunds, that spread widening. this is a safe haven trade as europe deals with those covid restrictions. over the board, the rich pound

in focus. we are below 129 on cable and this comes as boris johnson will have his decision to abandon trade talks with the eu. below $31 a barrel, still below $40. those measures start to take place. we are going into this weekend with fresh covid restrictions. londoners will be banned with mixing from other households and pears is set for a curfew. daily infections hit a record on membery and a staff tested positive and boris johnson's coronavirus strategy descended into disarray. as germany records the highest rate of new infections to also have a second day of high rate infections for germany, the nation's health minister told matt miller that tracing

capacity is reaching its limits. capacities, the icu the hospital testing capacities, today's point of view is all manageable. that's not proper right now today. the problem is that, day by day, with increasing numbers, you lose track and numbers are going high, exponentially. annmarie: bloomberg's executive editor rosalynn joins me now. let's talk about the u.k. because in london, we are going to new restrictions, but it's piecemeal. boris johnson strategy is starting to falter. what does he need to do to do to get local leaders on side? >> you are seeing leaders in the north saying we are not going to make the north the sacrificial

lamb for the rest of england. the difficulty for boris johnson is that areas in the north are where things are hardest hit, -- they are also in the suffering a lot of economic damage so they are concerned in having to enact these measures in their areas is just going to exacerbate the economic hit in those areas for years to come. if we have to do this, and we are noticing other parts of the country aren't under such restrictions, you're going to have to give us more money because the tories are looking at how they can wean parts of the country of that financial support from the pandemic. boris johnson and the chancellor have to throw more money their way to get it done. top of theust at the hour, germany posted record cases for a second straight day. leaders across the region are

struggling to get the virus under control. what's the latest? rosalind: we've seen germany today, france yesterday, numbers very high across the region. it's not just cases rising, the hospitalization rates rising. that's something countries need to watch closely. they're coming into the second or third wave, whatever wave we might be in right now, with less political capital than before. we spent months and months doing the right thing, isolating, social distancing. without we had this thing under control. now it's coming back, and coming back worse. there's a sense of fatigue governments have to manage. we're seeingwhy pushback, not just in the u.k., but in europe objecting to these local lockdowns. annmarie: leaders are preparing for some tough decisions when it comes to people's health and livelihoods. thank you for joining us. today, we were asking a question

on the mliv blog. how will the lockdown affect european stocks? please join the debate. reach out on your bloomberg this morning. now, i want to go deeper into what we're learning with our guest, christoph,. let's start there. what is going on in terms of how your is going in reverse -- europe is going in reverse will affect markets? christoph: regarding the toopean markets, we decided underweight europe and equity markets. we take into considerations some uncertainties and risks. the first one is, of course, the covid and the second wave, which could affect the speed of a recovery. it's one thing. second thing is brexit, should it impact the economic recovery and the visibility on this recovery.

elections, which have a direct impact, the ability for europe and markets. for all these reasons combined, we decided to weeks ago to underweight european equities. for the time being, we are very happy to do so considering that uncertainties are contributing to right -- arising and we should expect, at least until the end of the year, some uncertainties due to some of these issues. annmarie: uncertainties seem the only certain thing for 2020, doesn't it? i wanted to ask you what this does, in fact, do to european recovery. you her v-shaped, k shaped, joe biden did it last night. what do fresh lockdowns mean for the recovery? does it put us on pause or do we start to go in reverse? christophe: yes, [indiscernible]

on our side, i would like to prefer to mention what we are recovery, but not to come back straight to q4 2019 level as we are midway, in terms of recovery. and the rest of recovery will take time. i would sayive, that recovery would be very [indiscernible]. china is leading the pack, followed by the u.s., followed by europe. we should be back to q4 level, 2019, by mid 2023. we have threeope,

groups. in the first group, leading the rest of the pack, are germany and netherlands, followed by group two, france and italy, followed by group three, with spain, portugal, and greece. is -- shapedvery first. and second, the speed is [indiscernible] so for china being what you say the only one recovering here, the only developed nation -- it's actually going to grow this year -- they had this proper v-shaped recovery. i wanted to know, with china having that, one, what can europe learn from that? and also, at one point does china start to potentially slow down if europe and the united states are going in reverse? christophe: the specificity of

china, it's a big market in itself first. second, the economic policy is -- and the recovery in china is also based with domestic man -- domestic demand. in this first phase of the recovery from china, what has been surprising is the role of export. exports has been very strong for china. two the u.s., by the way, and to europe. it could hit the recovery in china. -- the domestic demand policy ina stimulated china. this is why we are confident regarding capabilities of china.

we are confident to recover and come back to q4 2019 level by the end of the year. annmarie: next up, we're going to talk about what's going on in united states. president trump and joe biden clash in dueling town halls. those details next. this is bloomberg. ♪

annmarie: good morning. this is daybreak europe. i'm annmarie hordern in london. president trump and joe biden competed in dueling town halls. front and center, the coronavirus. >> we make up 4% of the world's population. we have 2% of the world's desk. we have asked deaths.

-- deaths. we have 200,000 people dead. what is he doing? nothing. >> i knew it was a threat. but at the same time, i didn't want to panic the country. i didn't want to say, everybody is going to die! annmarie: joining us is derek wallbank. did you watch it? what was your main takeaways from both of these dueling debates? derek: i did. i sort of flipped back and forth between the two of them because they started at the same time. it was impossible to watch both of them. i think when you look at both of them, if you're a political obsessive and you really took the time to do both of them, the stylistic difference between trump and biden is very, very clear. trump clashed a bit with the moderator in is town hall. biden stayed afterward to talk with these undecided voters uber in his town hall. voters in his town hall.

it's really hard for me to understand how this is going to play with undecided voters. you can't watch two things at the same time. it would be difficult to make up your mind. annmarie: and more than 17 million ballots have been casted. 2016, it was in just over a million. how many voters can they swing? derek: well, and the thing i that a loto that is of the ballots that have come so far are biden ballots. we've seen democrats are voting early, a lot more than republicans. democrats are banking their votes right now. in terms of converting biden voters to trump, you're losing opportunities by the day to be able to do that. the key votes that are outstanding now, and day by day will be among those outstanding,

are those votes who sort of may be softer invited -- softer biden voters, who may have been trump voters last time. those are the persuadables that are out. as we go further and further, the level of persuadable voters, it's not just that they go down. it's the very identity of those so itdable voters shift, will be the softer trump voters, softer biden voters, those are the people available for conversion because democrats are banking the ones they can as fast as possible. annmarie: just quickly, the other big story out of d.c., besides the fact there -- we are 18 days until election day, we still don't have a stimulus deal. the math doesn't add up. what's the latest? derek: and nancy pelosi came out with a letter to her colleagues

just in the last couple of hours that said it's not just the numbers. we have differences in terms of priorities, but we're still trying to make it work. pelosi signaled something i think is interesting. she suggested whatever deal may the in reach could be retroactive, which means if something gets done, even if it's in january, it could reach back a little bit. and that could be an interesting signal to markets that even if something is delayed until january, or i saw politicos jake sherman came out and said, possibly the end of the first quarter, if something is lotoactive, then you get a of these boost from october forward. there may be some desire, as these negotiations are slipping, as you say, there may be this desire for a recheck provision. -- reach back provision.

annmarie: derek wallbank will be joining us the next few weeks. christophe still with us. you just heard what derek said, this retroactive clause nancy pelosi is talking about. do you think that is bullish? christophe: regarding the u.s. may, in, maybe if i would like to mention the most important thing, which is the next economic policy style, which will be adopted by the next administration. this is what is at stake today for markets, especially, by the weight -- tax tax rate. tomp gets the tax rates between 1% as a flat tax -- to 21% as a flexed tech. tax president biden is a

hike. have forapproach we gdp. this is why markets [indiscernible] waiting for the next economic policy style adopted by the next administration in case of a blue wave for presidency for the white house, but also potentially for the congress. annmarie: for the congress, as well, yes. but the markets right now are moving higher, and the polls show there will be a blue wave and a new administration in the white house. are you saying this is, by the rumor, sell on november 4 because those tax hikes are coming? christophe: yes, exactly. speech will first

be very important for markets to give the direction. i think that's been the case when trump did a speech right after his election, pressure in markets, and markets rebounded a lot in the weight of his first speech. it should be the same with biden, by the way, because the direction of the economic policy is for markets, after the monetary, policy we need additional stimulus from the tax policies combined for [indiscernible]. to me, this is the key point for the next year. annmarie: citigroup is saying no matter who wins, the last 40 years proves we'll -- proves we'll see a market rotation. where do you think that will grow? christophe: innovation versus

value stocks. to me, the main driver we have in terms of style in equity markets, especially in the u.s., is innovation. innovation is the driver we have astonishing performance of the nasdaq yesterday, followed by the s&p surplus, 5%. europe is in negative territory. what is at stake is the continuation of the innovation versus a rotation in favor of value stocks that a lot of investors are waiting for since years now. we are in favor of innovation stocks, innovation style and innovation approach, which has been a driver, the

main driver for the economic growth in the next year and or so for earnings growth. annmarie: christophe, thank you so much for joining me this morning. i want to get a recap of the first word news with laura wright. laura: it's brexit decision day for brose johnson. -- boris johnson. giveeaders are refusing to him the signal he wants in order to remain at the table. the eves communication has violated the negotiation by failing to include a commitment on the e.u. side. the latest study from the who from the antivirals have no definite effect on the hospitalized coronavirus patients. the study hasn't been peer-reviewed. gilead says it's unclear of any conclusive findings can be concluded. president trump is ready to lobby the republican party a bigger stimulus deal. treasury secretary steven mnuchin told speaker nancy

pelosi the president will lean in on the gop if the two sides can't come to an agreement. the president wants a bigger rescue plan than the $1.8 billion on offer. senator mitch mcconnell says that's too much. global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. annmarie: thank you so much for that news roundup. coming up, will he stay or will he go? decision day for boris johnson. he will decide whether to abandon trade talks with eu. we go to brussels next. this is bloomberg. ♪

annmarie: 626 time in the city of london, decision day for boris johnson. maria tadeo joins us from brussels. will the u.k. walk out? maria: good morning. that is the question, the only question that matters.

it was a very self-imposed deadline going into the european summit. the brits had come to terms with the idea they were going to miss the deadline, that there is going to be no trade deal come today, but they were hoping to stay at the table and get a reaction from the e.u. to signal a deal was coming. the e.u. put out a statement. they said you don't see room to intensify talks. they still feel it's problematic and we're not there yet. if you listen to president macron, he was very taken. angela merkel was saying they need to move. the compromise needs to come from them. that language rattled the u.k. delegation. they weren't respecting that type of language and you had david frost say i'm shocked by that. we're not happy with it. we have to make a decision. our reporting suggested he wasn't going to walk away, but the u.k. delegation not happy about that language.

annmarie: certainly not. maria tadeo, thank you so much. coming up, a thousand miles apart, not just physically. we look at the dueling debates. this is bloomberg. ♪

annmarie: gorp. from bloomberg's european headquarters, it is 6:30 a.m. in london. president trump: i knew it was a big threat. at the same time, i don't want to pan thick country. i don't want to go out and say everybody's going to die. >> we make up 4% of the world's population and have 20% of the world's deaths. we have 210,000-plus people

dead. what is he doing? nothing. annmarie: presidential candidates joe biden and for air trump duel time. europe goes into reverse on coronavirus. the region plans for a tough winter. boris johnson will decide today if he will abandon brexit negotiations. it comes as e.u. leaders fail to give a clear signal on prospects for a deal. good morning to you. 6:30 a.m.. struggling for direction in terms of the global equity market. softener asia, .3% off. we are getting some momentum in the european open. i want to look at yesterday's close when it came to the bond market. this is all about the b.t.t.'s. money coming out of the italian

debt market and going into germany. the spread is widening and this is a safe haven trade. cable was lower this morning. we wait for boris johnson. that self-imposed deadline, is t going to walk or talk? nymex crude below $40 a barrel. we are off 1%. it is this tug of war between stockpiles going down in america. obviously the demand picture is starting to get worrisome and possibly on thin ice as we see the pandemic really start to take control of the narrative in europe. president trump and joe biden competed in dueling town hall meetings in different city on different tv networks. trump sparred with the moderator. president trump: i just don't

know about qanon. >> you do know. president trump: i don't know. i know they are affiliated with pedophilia. disagree with that. a marie: joining us now is enior partner and a former ambassador. he was on assignment it is a deafity chief of mission. you're an comment voice to get the temperature. i know you have worked under a number of different administrations. when it comes to the election, just 18 days away. donald trump is trailing significantly in the polls. 17 million people have already voted. what can he do to get his campaign back on the rails? >> good morning. look, i think there is very little donald trump can do at this point.

his campaign is off the rails. his performance in the town hall meeting is another example of his inability to stick with his message that resonates with his key swing voters. his base loves his performance at the rallies but he cannot win without the support of young voters who don't like him. four years ago they didn't vote in great numbers because they didn't like hillary clinton either. they are definitely energized to vote this year. women voters. joe biden is ahead by 30 plus points with women voters and older voters, over 65 years old, they voted for trump by seven points. there has been a 30-point shift away from trump to bide then year. they are unhappy with his handling over the coronavirus.

his cavalier approach to it. those are the groups he has to try to win over. he shows no inclination of trying to do that. i think he is out of road here. annmarie: we haven't gotten a clear freans the administration whether -- from the administration about a peaceful transfer of power. if biden wins and trump refuses the results, what do you think it is going to look like from november 4 until year end? >> if that happens, i think it will get mess i think bide list win convincingly enough not just the popular vote but college.oral there won't be enough of a difference for troump contest the results. there may be one or two states but at the end of the day enough

states will vote for joe biden and the election will be over. the american media will accept it and the american people will accept it. they have an eye on the future of the republican party and won't want to go into the ditches with donald trump fighting an election result that is clear to everybody in the country. annmarie: there has been a lot of interesting commentary coming from republicans. lindsay graham said yesterday it is very likely that we can see a biden administration in the white house. i want to draw on your expertise in the world. we saw some stumbling blocks between relationship what stands out to me is the interview trump gave to the sun regarding theresa may. are those mishaps? are they bruises? open wounds? will a biden administration be able to get it back more on

track, that special relationship between the u.k. and america? >> i think a biden administration will quickly get it back on track. there are superficial things in trump attacking theresa may and tweeting negative things about the u.k. that have been irritants in the relationship but in a more fundamental underlying level there have been some policy differences over the last four years over climate, iran, syria and russia. i think a joe biden administration will be much more aligned with what are british core values and foreign policy. opportunity for the two countries to get get the relationship back to what it used to be before trump came into office. annmarie: you think this relationship can be repaired? >> absolutely. joe biden has a lot of respect

for the united kingdom and has spent a lot of time here. the foreign policy team around him appreciates the contributions that the united kingdom brings to cure world prosperity and peace. i think the connections are there the personal connections and this is a relationship that will quickly get back on its feet. the fundamentals of the relationship have always been strong. that hasn't changed during trump's presidency. the professionals on both sides of the click that work on trade development around the world have continued their work and the only real irritant has been donald trump and his sudden and unpredictable policy shift and personal attacks. once that is taken out of the picture, i think the relationship settles back into this equilibrium.

annmarie: what about outside the u.k. and europe? what are going to be the major policy changes that we could see if biden is to take the white house? >> i have to point out biden is going to be 100% focused on domestic issues when he comes into office. on the foreign policy side, the relationship with russia, there will be a shift. a frostier relationship with russia. the same with saudi arabia. saudi arabia has got an bit of a pass from the white house. i think that will change. in biden will approach china much the same way donnel trump has but focus more on human rights than donald trump has. his focus will be to build a network of democratic allies that can work together in some sort of informal alliance to address issues that we're concerned about global donald

trump's approach has been america alone. we can do it without allies and friends and partners. that has proven to not work and joe biden will take the opposite approach. we can be more effective working with allies and partners around the world to address issues of concern to us. annmarie: russia and china certainly stand out. also i think the jcpoa is going to be one of the first foreign policy signals that can get back in. former deputy here in terms of the embassy in london and former ambassador to senegal. thank you very much for your time. more than 150 companies urging president trump to withdraw an executive order limiting diversity training. that contain what is it calls divisive concepts about racism and sexism. we're joined on a quick take

reporter in new york. tell us more on this request. >> good morning, as we know the months since the george floyd killing, we saw corporate america to step up and prioritize it. they raised questions about whether company efforts to increase diversity violated federal discrimination laws. the d.o.j. went so far as to threaten federal contracts with companies like microsoft and wells fargo. now we're hearing from the chamber of commerce. thursday they put out a letter signed by over 100 companies nationwide directly addressed to the president saying it will do more to confuse companies as to what is a violation of federal law and might stifle any progress companies are making.

there still appears to to be a disconnect what the federal government is saying and what corporate america is doing. we're seeing companies like starbucks this week come out and still commit to their diversity pledges and move forward with the progress they are hoping to make. annmarie: thank you so much for your time. coming up, morgan stanley's c.f.o. said investors are already pricing in a blue wave. we'll discuss results next. this is bloomberg. ♪

annmarie: good morning. this is day break europe. investors expect democrats to take control of the white house and senate according to morgan stanley's c.f.o. we spoke with bloomberg about earnings results and their outlook. >> we had a strong quarter. broad based across all three

business. we continue to see elevated activity. elevated volumes. the first couple of weeks to have quarter we continue to see a constructive market. in terms of the future, we'll have to see. we have seen strong technicals and good liquidity. assuming we have opening markets and engaged clients, that generally bodes well. annmarie: we're weeks away from the election. how is that affecting how people ave engageing with the markets now? >> our clients are looking for advice. our bankers are intensely engaged with our clients and client dialogue. again, i think we're very focused on our clients and risk managing and looking forward to what the quarter holds. annmarie: you and your peers have put in such strong numbers.

how much are people worried that the gains we have seen in the markets will drop off after november? >> listen, i think a couple of things. one, people are generally focused on financial services as a bet on the economy. i think the uncertainty around the economy plays into that and as you just said, we had record to date revenues an returns. that is on the back of 2018 and 2019 record years. we have shown strong and consistent performance but people are clearly focused on the outlook. we have a lot of risk events that i talked about. as these things tick through, if the markets stay constructive, i think you'll see continued good performance. >> you mentioned there engaged clientses. we're watching carefully the outcome to have election. how do you think their behavior could change if we were to see significantly higher taxes?

>> we see significant amounts of liquidity with our client base, our institutional client or retail. we have about 20% of their assets in liquid, fixed income securities, short-term or cash. i think the client base is reasonably conservative. they are engaged and have been deploying capital. i think we're at the start of a new business cycle. assuming the economic growth can continue, that will drive earnings and a constructive market. annmarie: typically, you rewind to eight months ago, we would have said president trump will be better for wall street than biden. that has changed in the last couple of months. what are you clients thinking about a blue wave? how are they thinking about it? >> again, i think the best

outcome is a quick outcome for the election. the markets don't like uncertainty. i think the blue wave is out there. i think that is partially priced into the market and i think that is a function of whether regardless to have outcome of the election, i think the expectation is continued fiscal support. it is not a question of when, but -- it is not a question of , it is really a question of when and how big. policy make rs have been very supportive and i think the markets regardless of the outcome of the election expect continued fiscal stimulus to elp improve the economy. annmarie: morgan stanley's c.e.o. the this time around traders will be bringing home a smaller slice of the windfall. give us a figure.

how much less will traders be compensated this year? >> because they have brought in so much money, the over all pie of money being compensated is higher. about $6 billion higher. that is what is important is the ratio. are bankers getting back what they put into the company? that is less. revenue percentage getting put sachso bankers at goldman has fallen about two percentage points and jpmorgan about a 4% dip. prior to this year it was a 30% compensation. traders getting less than they put in than last year. annmarie: the money is there. is this simply banks trying to cut down on their expenses? >> that is probably the main driver here. yes, trading revenues did well but other sections in banks have been struggling. they beat expectations but their profits are still down by about

1/3 of what they were last year. as one edward jones analyst told bloomberg if, you're a manager looking to cuts expenses, costs here when it comes to compensation are some of the lowest hanging fruit and the other big reason is political. we are heading into a u.s. election. politicians really like to use banker bonuses as signs of excess in the economy. it is unclear how they will be treated after this election and we are also in a recession where the unemployment rate is higher. optically it doesn't look great to be paying huge banker bonuses in this sort of environment. annmarie: the optics are not good for the banks. thank you so much. germany's health minister warns tracing capacity is reaching its limit. the country posts a record coronavirus case for the second day. we'll discuss that next. this is bloomberg. ♪

annmarie: good morning. just over an hour ahead of the european market open. the u.k.'s chief scientific advisor will be giving a briefing today as leaders fight back against extra curves we're going into the weekend with. investors watching u.s. retail sales. hat comes out at 1:30 p.m. moody's gives an assessment of u.k. debt. it is decision day for boris johnson yet again. i feel like we have said that so many times. back to pandemic. germany is recording the highest rate of new coronavirus infections. they spoke at a web that par this warning that tracing capacity is reaching its limits. > hospital testing capacities.

today's point of view is all manageable. that is not the problem right now today. the problem is day by day with increasing numbers, i'm not able anymore to trace and then you lose track and the numbers are going higher. annmarie: joining us from berlin is bloomberg's matt miller. i want to mention to our viewers. they are weighinging a curfew measure. what is interesting what the health minister said, he almost said tracking and tracing can't work anymore because the numbers are going up too quickly and too fast that it would not be worth worth it. >> yeah, i mean, that is almost literally what he said. you can't trace cases when the rising. re

the increase, the surge is too strong to deal with tracing back when you're looking at another 500, another 1,000, another 2,000 cases a day. that is what he is prepared for. it is too difficult to try and trace back each individual contact over the last two weeks. here you can see a graph. we're getting back to the levels we saw at the end of march which is when we had our initial lockdown. it is important to point out, germany's lockdown wasn't as severe or draconian as we saw for example, in spain. we were still allowed to go outside. we were still allowed to go to parks and we did in droves and yet, the numbers came down. if it came to something more restrictive again, i don't think that germans are as worried about it as italians or spanish

people. however, he did seem to rule that out. he basically said we're not going back to another lockdown. annmarie: we'll be hearing more from that interview. i watched a lot of that. one thing he did say, no lockdown but he is encouraging social distancing, wearing of the mask. it has been politicized in the united states but it seems like in europe people are taking that onboard. matt miller is up next with anna edwards. we're just over an hour away from the start of european trading. we are seeing a reversal when it comes to the market and what we closed yesterday. u.s. equity futures relatively flat. it is a little bit softer. euro's futures are up on the stoxx 50. ftse futures up .9%. it is going to be a big day for the u.k.. boris johnson. will he walk? will he stay?

for londoners we move into a tier 2 this weekend. this is bloomberg. ♪ so you're a small business,

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>> good morning. i am anna edward. markets say happy friday. asian stocks mixed. u.s. equity futures .2 positivity ahead. top headlines from