it is 11:00 a.m. here in london, 6:00 a.m. in new york on this monday, september 6. welcome to bloomberg markets. let's get straight to the markets. happy labor day to all our u.s. viewers. a lot of people have the day off. if you look at cash treasuries, they are not trending today but u.s. markets are closed. stocks are rising with u.s. equity futures as investors bet there is a slowing of hiring in the world's largest economy. it could delay a tapering. after the jobs report cannot markets were all over the place -- the jobs report cannot markets were all over the place. -- the drums report, markets were all over the place. -- aluminum hitting a decade high. let's head to the markets desk. >> we are looking at a big day

for european equities. the european benchmark is itching -- inching toward a record high. that shows you what is going on in the stoxx 600 today. we are looking at green across the various screens, with tech leading the way. real estate is the laggard. of course we are seeing green, gains across the european indices today. if we look across assets, i wanted to mention the dollar index gaining for the first time in five days. the rest of u.s. trading closed for labor day. we are seeing some movement in a positive direction for the s&p 500 futures today. also, take a look at crude, down. we are seeing that because we

are seeing saudi arabia slashing prices for asian buyers. we also see bitcoin rising. we will see el salvador making it a legal tender tomorrow. there's a social media movement to get people to try to buy coin. you were talking about aluminum. i have a 20 year chart here. it had a decade high after the political unrest in guinea. of course the concern is about supply of bauxite, key to making aluminum. francine: now a look at what is ahead this week. president biden likely making his decision on whether to renominate fed chair jay powell to a second term. el salvador becomes the first country to accept bitcoin as legal tender. and a virtual panel discussion.

we get the latest ecb rate decision from christine lagarde. after a quiet day today, it will be a packed week. a fixed income strategist joins us now. i have a million questions on the jobs report. there was wage pressure. does the number mean the economy could be on its knees and we have not realized yet? >> i think labor markets are key. in the u.s., we still have the impact of the delta variant. in europe, short-term labor numbers are still high. we had an increase in the population that left the labor market. that is one of the key reasons as to why they will continue to be dovish and support economies going forward, positioning for a

longer scenario especially in europe. francine: does it change your view of when the fed starts tapering? they have told us tapering does not mean rate hikes. >> i think that is the key. overall, there will be a dovish sentiment through the market. every bit of data is not as strong. we continue to see the effects of delta, so we are dovish on the fed side that they do not want the market to get ahead of themselves. they are probably pricing in two much already at the moment. the market is beginning to adjust lower and we continue to see labor markets not come through as strong as anticipated. francine: what does it mean for treasuries? tom: we think lower overall.

we think the first rate hike could be in 2023, the ecb even later especially in terms of this thursday. the ecb will remain with heavy stimulus and we have a huge problem in europe. financial conditions are fragile . looking at the longer-term, it will be important. interest rates have dropped so much especially in europe that we expect interest rates to be 2%. francine: what you say from the ecb -- expect from the ecb? you are looking at -- when you're looking at italian bonds, they are looking narrower. does that make sense? tom: in the end, it is compression.

if we have more ecb stimulus into the market, we will have spreads low across the board. we expect the bund at -50 basis points. then also we have the market compressed heavily but also the chance of credit spikes is limited because countries are been helped at the same time. the ecb is going to be here for longer. we expect extensions. the market at the moment wishes for more inflation. if you look at core inflation, it has not been going anywhere. we expect to be in a lower scenario that is priced in a the moment. francine: do you worry more about deflation or rapid inflation? tom: deflation on that side.

especially in europe, there were more worries on that side. central banks are so closely involved now with markets. the chances they would accident lee raise too quick is slim. -- excellently -- accidently raise too quick is slim. for us, we are still on the dovish side. it is purely looking at core inflation. francine: overall, a couple questions or may be one key question when it comes to supply chains. are we underestimating longer-term impacts were will supply chain issues be here to stay? -- or will supply chain issues be here to stay? >> how the delta variant progresses in china will be crucial. we have seen restrictions. that looks good on the supply and demand side.

the question is which way does it go? we will see more pressure put on that side. at the moment, it looks ok. if we have more restrictions globally, that would weigh more on the supply chain. francine: where do you see it first? if it gets ugly, how do you see it? tom: i suppose we begin to see it coming through on disposable income goods, large ticket items. we have had a lot of discussion on microchips and everything. when we see export imbalances, that is when it will really begin to hurt. we will see europe with heavy export driven gdp. it is all tied to how the next few months ago. how will economies deal with delta rising especially in the northern hemisphere? francine: i love some of the

research notes. i know you look at vaccine supply bottlenecks clearing up. is there anything in the economy that should make us worried about where fixed income goes from here? tom: our base case now is for rates to stay low. credit is king. that is the only area giving a positive return. there are some members worried about the long end. we like the duration on that side. overall, the biggest worry is if we suddenly get excessive growth, excessive inflation. then the long end will underperform. that is what has happened with the ecb's being so heavily involved in markets. francine: one of our top stories

on the bloomberg terminal is trying to figure out what they mean with common prosperity and what has happened with the crackdown. there must be a fixed income angle to this. what are you looking at? tom: is it going to offset the strength we have seen in china? these divergence -- is divergence going to impact the huge growth in china? the answer is no. despite the smaller rules and changes -- at the moment we do not see a policy change would be able to globally impact everything in the markets, especially in terms of where central banks are going in terms of interest rate rises. china will have managed with the economy closely and will continue to do so. francine: thank you so much, tom

kinmonth. let's get to the munich autoshow current where the international autoshow has found a new home after almost seven decades in frankfurt. matt miller, you are at a conference with real people talking about real things. matt: a lot of real people here. mostly they are talking about cannot get enough batteries, enough chips? they are also talking about mobility solutions, ridesharing, delivery services. this looks like it is going to be a hefty chunk of their revenue. we could be looking at 15% to 20% of their revenue going to mobility services for a company like volkswagen, which is why it is spending so many billions of dollars, $2.5 billion a year, developing software, making acquisitions, and putting pieces together for a bigger mobility services business.

that jargon term is going to make more sense to us when we start using these services more often. francine: matt and i are having a disagreement on whether bugatti could be considered italian. matt miller will join us later on. coming up in the next hour, a portfolio manager will have a thing or two to say about china and the jobs report. that is at 7:00 a.m. in new york. this is bloomberg. ♪ >> the price of aluminum climbed to its highest and more than a decade following a military coup in guinea. the west african nation is a major exporter of bauxite.

the head of guinea's special forces said he took action to address financial mismanagement and corruption. in the u.k., it is likely to be a tough week for british prime minister boris johnson in parliament. he will be forced to defend his handling of the afghanistan crisis. plus, johnson faces a backlash from his conservative party over reports he is planning a tax hike on workers to boost funding for social care. that is something the party has pledged not to do. 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. ♪

francine: welcome back to bloomberg markets.

aluminum climbed to its highest and more than a decade after political unrest in guinea fueled concerns over the price of rum materials. joining us now is eddie van der walt. first, the coup was yesterday. i did not know they had so much bauxite. does it actually point to supply chain constrained or is it because they have so much bauxite, which is needed in aluminum? eddie: this is key for the aluminum markets. china imports 40% of its bauxite from guinea. that means the market will be tight. china is the biggest consumer of most metals. in another scenario, we may not have worried as much because well a lot of china's bauxite

comes from their and that is used to make aluminum, we would not have worried otherwise so much. the fact that supply chains are already so stretched causes panic about the issue. at the moment, we are hearing supply of bauxite is not particularly affected, but the market is worrying. francine: what do we know -- the market is concerned because they are worried bauxite can get to where it needs to go? eddie: over the years what have seen in these situations, it is resource nationalism. we have seen countries say, why do we export all of these things and should we honor these long-term agreements we have made with companies?

should we redistribute these resources? it is an important source of foreign currency for guinea. we do not know at this stage whether that will be the case yet, but we have seen that in the past. francine: with china, how much disruption does that bring? eddie: we have seen metal prices overall doing fantastically well. part of that is that at the moment supply chains, as stretched as they are and ports closed and so on, the moment you see that additional knock on, that could bring the whole thing to a halt. francine: thanks so much. now back to munich. he cautioned the semi conductor shortage would probably last months or years and touched on the company push into self

driving technology. >> we need time to get electric because we need the capacities for the battery sales. that will take time. we are running at only 6% electric car sales worldwide. and some of the countries, 70%, 80%, norway, sweden, holland. it depends a lot on the local policies. when policies are in place, we are very fast. could we be faster? not a lot. we are fully booked and hope to continuously grow. we are aiming at 2025, which will be a tough target. >> are you going to double your

sales of electric equals every year? >> exactly. >> in terms of the semi conductor shortage, look for a moment it was going to be a bottleneck issue and now there is a double-dip. how does that play out? >> you are right. we expected after summer break relief as we set up a lot of recovery plans, but we suffered the setback mostly through covid . malaysia was hit hard by covid. that hit us hard. we hope to overcome this new situation probably next month and then recover this year. overcoming those really crisis

issues, i think probably we will remain in shortages for the next months or years because semi conductors are in high demand and the capacity ramp up will take time. it will be probably a bottleneck for years to come. francine: that was the volkswagen chief executive speaking to matt miller, who joins us now. when can i get into a car, sit back, read my book, and it is all automated? matt: they do have a few of those vehicles here, but it is going to be a while before they come out on the market. they have concept cars here that are driverless, autonomous vehicles. passengers can just get in like robo taxis or some that you could even buy for private use

and they will drive you around. it is going to be a few years still before they get on the road. they have to deal with not only the technological side but regulatory issues. they have to figure out culpability in case of an accident. it is going to take time. for now, the focus is getting the electric vehicles out there and doing the sales they want. they have 6% of their volume worldwide is electric. they are one of the biggest carmakers in the world. if you look at a smaller carmaker like bmw, they are at 11% and want to continue to ramp this up. the ship shortage is one of the biggest problems. my colleague spoke to oliver zipse. he said today it is going to be six to 12 months at least until the ship shortage is sorted. this is a longer-term issue automakers have to deal with.

francine: i know a lot of the focus is on green issues. what is the most exciting thing at the auto show? matt: to me -- i do not know if exciting as the word i would use, but the tiktok boys who have short pants and white sneakers, i am seeing all of these middle-aged auto executives walking around in a suit, usually no tie, and wearing those white sneakers, trying to emulate that tiktok look. i think it should be embarrassing for them, but that is the biggest trend i have seen here so far. francine: it is like when we used to see central bankers in suits and ties and sneakers on their feet. i like the look, keeping up with the time.

matt miller is wearing proper shoes. coming up next, a european economist. we will talk about the pivot to green and inflation. this is bloomberg. ♪

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francine: welcome back to bloomberg markets. we have been hearing from ministers across the eu as they weigh the risks of inflation. they spoke to bloomberg over the weekend. >> i don't think it should come as any surprise that there is a spike. >> we are not concerned by the current level of inflation in the eu or anywhere in the world. >> inflation is very much influenced by energy prices, food prices. >> all institutions consider it will be transitory and we have to avoid it as structural. >> we think it is temporary. >> we are monitoring, and we should monitor it accurately but

without going to conclusions too soon, we remain vigilant but we are not concerned. >> it is a natural feature of a strong recovery we are witnessing. francine: christian schulz now joins us. do you worry about deflationary pressures or inflationary pressures that would force the ecb's hand? christian: forcing their hand is something to be worried about. the underlying question is unanswered. i side with the ministers just interviewed. the main problem for a stronger inflationary picture in the euro zone is the labor market. many are unemployed. many are out altogether. wages are forced down when these

people try to get jobs. there is also concern, the high inflation will translate into second round demand and therefore the ecb will look at this with more concern and become more hawkish in the months to come, maybe this week. francine: what does it mean in terms of what euro does? what is the biggest concern for ecb right now? the fed or other smaller central banks if they raise rates? christian: the fed is very important. the u.s. dollar is important. we saw that friday when the u.s. labor market disappointed. euro went up. that is bad news for europe. the export market is not as strong as expected and the other is the ecb cannot really do much

about it. they can send a dovish signal this week by perhaps keeping the pace of purchases the same but it looks like the hawks at the ecb are in the ascendancy. our take is they reduce the pace a little too then smoothly go into the app, pre-pandemic from next year. overall, that is not a dovish message. that should not be negative for the euro. francine: what do you expect for the german elections? the polls are tight. what would be good for the economy now? christian: the one to watch is all these coalitions, at least 5, 6.

the one to watch is the left-wing alliance where all the left policies come together. they have spending, public investment but also higher tax rates and more regulation, higher green prices and so on. that would be good in some sense for demand but it would be bad for supply and therefore reflationary. others are all coalitions that reach across the political divide so they are constrained by policy objectives and in the end quite the same as we have had for 16 years now. francine: how does it reshape deficits when you look at the german economy? can it reshape the future of europe depending on who is in charge in germany? christian: who is in charge very much matters because that person will represent germany at the negotiating table at future eu summits and there are big questions coming up. perhaps of upsizing or making

permanent the recovery fund, more risksharing from germany, completing germany and the single market -- the sorts of questions. if an experienced finance minister becomes chancellor, which becomes extremely likely, that is good news for stability. someone new, they would need a phase of learning on the job. that will take time, particularly as we do not know what will happen with the french elections and with italy, perhaps the presidency or mario draghi gets promoted one level up. francine: when you look at german bunds, do you see yields converging even more than what we have now? christian: it looks like at the moment, the social democrats will get a strong role in the next government.

that should mean less risk of eurozone breakup because it is very pro-european and happy to engage in further risk sharing. more fiscal federalism. that would be positive for bunds and on top of that you get more fiscal expansion which would be negative for bunds on the others of the spectrum. if we end up with a government with a more right tilting majority, that poses slight risks. overall, the one message from the election will be germany's commitment to the eu and the euro is unwavering. the extreme parties have not made any advances at all from the last election. francine: christian, thank you so much for this. we look at the pressures from china. i don't know whether we should

look at it independently or if there is concern supply chain issues, because of port closures and the no covid policies in asian countries, could impact policy in europe? christian: this morning we got the factory orders. 15% above pre-pandemic prices. at the same time tomorrow we get production data likely to still be five percentage points below pre-pandemic levels. there is a lot of fuel for multiyear manufacturing recovery, which benefits the european economy. in the short run, there are risks from supply shortages. there is a question about china's regulatory tightening and what that means for growth. underneath all of this, i'm convinced we have a multi-year manufacturing upswing ahead of

us because we need to fill the gap between demand in orders and supply in production. francine: what happens, and we are a long way off, if we don't get the full infrastructure package in the u.s.? is the world economy at risk? christian: no, at least not from a european perspective. the u.s. is an important market but one which is very stable. it has ups and downs and some are driven by the political cycle. a big infrastructure package would be good for demand but if it does not happen now, it will happen in the next presidency or the one after that. it is a stable market. it does not influence like an upward trending market like china. i'm looking much more china than the u.s. for a cyclical area. at the moment, i am pretty

convinced we have a long upswing ahead of us but we have to face the facts that in china, a lot of things are trending downwards at the moment. china is so important. i cannot say that with low clouds on the horizon. francine: thank you so much. let's get straight to the markets. emma: wanted to take a deep dive on european equities with this particular market focusing on europe, given that the u.s. is closed today for that holiday. the market is strong in the market, inching ever closer to its all-time high. burberry doing pretty well. lots of rumors it is a potential takeover target. lots of deals happening in the u.k.

the third-largest market globally following the u.s. and china for takeover bids. rising, we are seeing green across the screen for much of europe, but on friday, the dax is about to become the dax 40. this is gaining a good 1%. let's look at how the industry groups within the stoxx 600 are doing. it is a majority of them in the green today. construction materials and real estate are laggards. tech is the big leader, gaining. the german global connectivity platform is the leader, leading the whole of the stoxx 600. interesting stock, only went public two years ago, down 30% on the year. a lot of short interest on it. one long-term skeptic may be

cutting that short position somewhat. some of the other big movers today. alla minium -- aluminum, was up 5% earlier. clearly, very important, this is sending the price and stock higher. looking at leonardo, the biggest aerospace company out of italy, this moving higher by 2.5%. on friday, the ceo told us they are looking to move ahead with the ipo of the u.s. army as soon as possible -- of their u.s. arm as soon as possible. francine: thank you so much for the latest moves. coming up, the johns hopkins bloomberg school of public

health on booster shots and vaccines. this is bloomberg. ♪ angel: oil extended losses today after saudi arabia slashed prices for asian buyers. that raises the prospect of fierce competition among sellers. a resurgence of the coronavirus continues to cloud the outlook for demand. meanwhile, natural gas prices are undergoing a historic surge. the cost of gas is already at record seasonal highs in most major markets and looks likely to rise further. economists warn it is another risk factor for lasting inflation. the biden administration is feeling confident it can pursue a key democratic senator.

joe manchin demanded last week strategic cost but the chief of staff told cnn he should be persuadable by the arguments that the package adds nothing to the debt. singapore is the latest country to lift a ban on the boeing 737 max. the plane is now legally allowed to fly and its airspace again after it was grounded in 2019 following two fatal crashes. china still has not lifted the ban. global news, 24 hours a day, on air and on quicktake from bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪

francine: welcome back to bloomberg markets.

the biggest landlord in hong kong expects political setbacks. >> obviously, the market environment is something we deal with on a regular basis. in reality, we don't see this reciting a lot. a lot of corporate's are elevating and going back to quality, actually removing and going back to quality. reporter: a lot of travel has been restricted. restrictions right now, people just can't travel around the world.how difficult is it for you to get more people to lease properties now? >> we still find the market quite vibrant. a lot of clients are upgrading and coming to us in terms of

facilities. our vacancy has dropped by the end of this year. reporter: people are looking for quality but there will still be nine developments outside central set to open up. you hear the likes of bmp, they are backing off staff to cheaper locations. do you believe there will be a decentralization? >> i do not see that at all in the portfolio for the last two years. there is a lot of talk but i do not see that at all. what i see going forward is that people want to come back to central. reporter: even with this office space? >> absolutely. reporter: why do you think that is? >> what we offer in the central district is very unique.

this is probably one of few places you can do 12 meetings per day without actually leaving a one mile radius. i don't think any place in the world can do that, not new york, london or tokyo. the maximum you can do in one day is four. the efficiency we provide in the hong kong portfolio is that you can do 12 meetings per day, and that is very unique. reporter: do you feel you still have a couple years before these buildings open in central? that you will take as much marketshare as you can in the coming years? >> it is more the other way around. we have a very strong position there. last for years, we have done a great deal in providing amenities, the flex facilities, a lot of the ecosystem we have.

again, i don't believe -- yes it is competitive but medium and long-term, having these new buildings in central is very valuable. it brings the central district into a stronger position. reporter: you mentioned singapore, shanghai, hong kong. these are all hubs. you mentioned there are not a lot of people willing to leave hong kong at this point. are you seeing anyone recalibrating how they view some of these markets and where they strategically put their office is now given the activity you are seeing in these cities? >> we can put satellite office s in these but hong kong is the anchor. we have not seen anyone made a big move of offices into other jurisdictions. for hong kong, it is very simple. you have the low tax rate, the

free flow money, a very good regulatory system internationally recognized and also proximity into china which is one of the biggest markets in the world. geographically, hong kong is very uniquely placed to thrive in this new commercial arena. francine: that was the hong kong land executive. let's get more on the virus from johns hopkins. dr., thank you for joining us, especially on labor day. happy labor day to you and all our american friends. with these questions on booster shots and the vaccination rate and what do i do have my child is going back to school, but what is the question you get asked the most? >> when vaccines will be

available for children under 12. that is a question i cannot answer. we do not know the data yet for kids under 12. hopefully, we will have some of that data and the fda will be able to share it transparently, convene an advisory committee and make a good decision. francine: when do you expect delta to trail off? dr. sharfstein: there are signs in some states that is beginning to happen. there other states that are potentially vulnerable. most of the models show by the end of september, mid october, it will be trailing off in some places. the question will be how far down it goes and whether it really goes far down or just bubbles along and there is still

a lot of people affected? we will have to see where it goes. there are different things around the world. in the u.s., it may look different in different regions. francine: with booster shots, there are number of trials, and if you are not expert, they can be confusing. if you had covid and two vaccinations, you're much more protected? dr. sharfstein: certainly people who are immunocompromised should get booster shots because of the risks you did not respond well to the first shots and there are evidence with the third shot more people are responding. beyond that, it is a little early to say. i am looking forward to seeing more data. there is a hope the fda will be able to see the raw data from israel and look at it. there are statistical illusions sometimes happening. people really need to get into the data to see. the challenge is distinguishing

whether immunity is waning or rather it is the delta variant. if it is a former, booster shots have a strong case. if it is the latter, it may not matter. one thing i can say is it is really important for people who are not vaccinated to get vaccinated, certainly people who have been sick with covid before. francine: when you look at the winter months, is there a danger delta gets worse or that we would have another mutation because we get -- ? dr. sharfstein: one of the concerns -- pediatrics is showing initial area of concern is what will happen to other respiratory viruses? it may happen, right now in pediatrics we are seeing severe infections in kids, also creating problems in children's hospitals filled with covid patients. we have this very unusual year

where there are very few viruses in general. we don't know exactly what will happen this winter. that could be a complicating factor. francine: thank you so much. the johns hopkins bloomberg school of health is supported by michael bloomberg. this is bloomberg. ♪

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♪ francine: 12:00 p.m. in london, 7:00 a.m. in new york. i'm francine like water in london. welcome to -- i'm francine look what in lent -- france dellacqua -- i'm francine lacqua in london. welcome to "bloomberg markets." today it seems that investors are betting that a slower hiring in the u.s. may actually delay tapering of the federal reserve stimulus. if you look at the friday movement, it was a little bit all over the place because the miss was so big, there was underlying concern that it was bad news for the economy. aluminum hitting a decade high amid some of this political unrest in guinea.

let's head over to the markets desk with, chandra -- with emma chandra. emma: you mentioned european equities rising. we've got the ftse 100 rising some 0.6%, the cac 40 up by around 0.7%, and the tax up 0.6% -- the tax up zero point -- the dax up 0.6%. you mentioned the labor day close for the holiday today. all related to that job's report on friday. of course, that missed investors ' hopes. we are looking at this across the screen. aluminum hitting that decade high. we should have a chart which will show you its performance year to date. i wanted to show you that because i wanted to show you how

well aluminum prices have been doing the course of this year, up some 40%. that is down to all of that stimulus we have seen globally and how that impacted demand. as well, we saw china perhaps struggling with that demand. that also for stock prices. then we see the unrest in guinea today pushing those prices even higher. there is real concern in the markets that that supply will be constrained. it is key in making element name -- making aluminum. also looking at oil today, it is down. wti and crude both falling today. this as saudi arabia slashed prices for asian customers. we should also be able to show you bitcoin, which is having a bit of a strong day i had of el salvador making it a legal tender from tomorrow. francine: thank you so much.

now let's have a look at what else is i had this week. president biden will likely make his choice this week on whether to renominate fed chair jay powell to a second term. then tomorrow, el salvador becoming the first country to accept bitcoin as legal tender. wednesday, dallas fed president robert kaplan holding a virtual town hall discussion. thursday, will get the latest ecb rate decision and press conference from christine the card -- from christine le guard -- christine lagarde. full swing ahead for the rest of the week. reporter: we've got so much excitement. there's the ecb, there's the beige book, and we really want to hear from fed speakers what they make of all of this. there's a lot to be excited for in markets, absolutely. francine: what you make of what we heard from the nfp? markets didn't know where to

look. if you are a traitor, you think -- a trader, you think, does that mean more fed stimulus? do you want to go home and hide under your desk? eddie: we ask that question before the number came out. if these things go in different directions, if we see a jobs growth slowing and inflation picking up, or wage inflation picking up, which one is the market going to listen to? my sense at this moment is that the market is looking towards the inflationary noise. we are not seeing breakeven's move an awful lot, but we are seeing yields move a little bit and gold's move a little bit. i think this is a difficult situation for the fed, and it just brings that worry about stagflation back under the table. francine: i also want to talk to you about joe biden. if he does not reconfirm jay powell, the market is not really focused on this because the names that were floated would be just as deaf a chefs him -- just as dovish as him.

eddie: i don't think the market is particularly worried about that. they got so much else on their plate at the moment. it would be a bit of a surprise. the market is quite comfortable with powell let the moment, and we haven't seen strong indications that he is not, that might and will not. francine: you look at commodities -- that biden will not. francine: you look at commodities every day. today might be different because of what we are seeing in guinea and aluminum at a decade high -- at a four decade high. eddie: we seen prices run up this way anyway because of price disruption and the ramp-up and demand for goods globally. at the same time, there's this worry that supply chain disruption has been with us for months now. suddenly, we are getting to that point where if you see a producer like guinea, we are not even shutting down production, but we're just worried about

them shutting down production. that would just boost prices. francine: thank you so much, eddie bender felt -- eddie van der walt. alberto gallo, algebris partner, joins us now. what is the market not understanding about this long-term gain? alberto: essentiallyalberto:, both china and the u.s. have similar issues. there's lack of growth, demographics is slowing, and there's a lot of inequality. but what is interesting is both china and the western economies are trying to solve this problem, but in very different ways. in the united states, we have a sluggish recovery, and the response is monetary policy, one-size-fits-all responses.

there's the idea underlying this with also the rise in modern monetary theory discussions that there can be a free lunch, which is something that in economics, everyone has been taught as an impossibility. but the idea that the u.s. can print enough money to solve inequality, to solve climate change, that central banks in the west are the solution. it is mostly a one-size-fits-all story. this brings markets to a goldilocks environment where currency is depreciated and stocks go up. what china is doing is very different because they are tackling all of the problems like inequality, monopolies, corporate monopolistic behavior, all of these they are tackling in a very surgical, microeconomic way with regulation. they're very more focused on

strategy versus easing. francine: -- alberto: the paradox is what is good for the economy is actually bad for markets. so what china is doing long-term might work for the economy and for inequality, but it is better for investors. the u.k. are using loose monetary policy, which works very well for markets, but it is not going to rebalance the economy. francine: i want to bring in our columnist eddie vendor vault -- eddie van der walt. i don't know whether that goldilocks market scenario it's pulled out if something happens with inflation, and therefore central banks need to move, or something else sharpen a correction. eddie: i love this goldilocks scenario because this is kind of a reverse goldilocks and that things are just bad enough that

policymakers won't want to remove stimulus. at the same time, inflation is picking up, but it is not hot enough for them to start panicking. but i think that worry is going to be on the place inside, particularly on wage growth, and particularly even if that slow jobs growth turns out to be the result of struggling in hiring rather than as a consequence of their not being enough jobs out there, which the jobs data certainly tell us there seems to be a lot of jobs out there, then this is something that the market will be worried about. francine: so how do you see this reverse goldilocks scenario being put to an end? alberto: on inflation, the answer is if you put 10 economists in the room, you will get 10 or more different answers. it is very hard to forecast. but we are not convinced that inflation is transitory, and we see that some of the supply bottlenecks causing inflation

are actually a lot more persistent. in particular, let's think about all of the geopolitical bottlenecks. china becoming more isolated, the u.s. in turn on shoring production of certain goods. and about the chipmakers, intel's ceo seeing the shortage of chips will last for another. two or three years so these things -- for another two or three years. so these things are not transitory, and they will drive costs up, and companies are passing them on to consumers. then there's the wage discussion. democrats are very careful about minimal wages, and the fed wants to reach full employment. we already see the supply of labor is constrained because of breaks it, but we might see something -- because of breaks it -- because of brexit, but we might see something in the u.s. as well. what we are going towards is a

more state capitalist environment, where the government has a bigger role in the economy. francine: thank you so much, alberto gallo. coming up in the next hour, we speak with the b2b capital global macro strategist. he usually has a thing or two to say about the global economy. that's coming up at 8:00 a.m. in new york, 1:00 p.m. in london. remember, it is a pretty big week. not that much going on in terms of market news today just because it is u.s. labor day, but later in the week, we have the reserve bank of australia right decision and china trade data as well. this is bloomberg. ♪ >> with the first word news -- aluminum has climbed to its highest in or than a decade after a military coup in guinea. the head of guinea's special

forces says he took actions to address corruption. in the u.k., it is likely to be a tough week for prime boris johnson in parliament. today will be forced to answer to his handling of afghanistan, and backlash in his own party over reports he is planning tax hikes to boost funding for social care, something the party has pledged not to do. the united arab emirates plan to increase its trade ties with fast-growing economies in asia and africa, and hoping to draw 150 billion dollars in foreign investment from older partners. the uae will also ease restrictions to try and attract foreign talent. the country has been the middle east's commercial capital for more than a decade. now it is facing competition from saudi arabia. the ceo of volkswagen fears the global chip shortage may last for years. he said that semiconductors are

in high demand and it will take up to wrap up -- to ramp up capacity. it has been constraining auto construction around the world. traders returned to the lme floor today for the first time since the pandemic. plus, an outbreak of the coronavirus could force it to close again. 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. ♪

so the demand picture is pretty strong. francine: let's also bring in eddie van der walt. i don't know whether these are idiosyncratic stories. so aluminum, because of what is happening in guinea, oil because of what is happening in saudi, is there a narrative underpinning all of them? eddie: i think there is. we are seeing the supply side of a lot of commodities are tight, and i think that helps. we've got the reopening trade still in progress. we'll has got its own idiosyncratic factors in that opec has been supporting the price throughout most of the year. i think we are starting to see the signs that opec would pump into rallies, so the upside for oil is a lot more capped than it would be from metals. will: energy is extremely

interesting right now. i think eddie is right that opec is capping the prices, but globally, energy prices are incredibly strong. natural gas prices rallying hard in europe, our prices are close to all-time highs. coal is very high. that is about reopening and the recovery in the economy. so we've got that demand-side looking strong with supply-side constraints, so oil is the outlier here. if you take oil out of the picture, other energy commodities are very strong, and we have seen some real strength in metals like aluminum highlighted by the cu in guinea -- by the coup in guinea. jonathan: thank. will kennedy is in charge of our modded he's coverage. eddie van der walt stays with us. volkswagens partner developing self driving technology is

starting to test thomas vehicles on roads in germany. herbert diess spoke with our matt miller earlier today about the company's work with argo ai. herbert: it is a race towards who get steve pearce licenses, who can prove safety for the passengers, who can roll out the first pilot project in cities. so it is still not about scaling. we have to prepare for scaling, but still it is a race to get the technology rate. we are very dusty technology right. -- the technology right. i think our candidates are better. more range, more precision. there's a very good team, one of the best teams. so we feel strong that together with brian's team, we can be one

of the top teams of autonomous driving. matt: can you imagine sharing that with another brand later? herbert: we have a 40% share of the kit development currently with ford. yes, we would be open to share. matt: it seems like it makes of a huge portion of mobility, and you want mobility to make up a significant version of your resume. herbert: our estimation is by 2030, where we are focusing our strategy, probably 50% of mode ability -- of mobility might be autonomous services. 85% cabs in different use cases.

mass: 15% and 85% -- matt: 15% and 85%. herbert: that is our estimation. matt: and in terms of how much revenue you will make from ability? -- from mobility? herbert: it is very early to say. you have supply and demand, and you have a business to run. you have to build the cars which is very similar to what we are doing now. you have the additional business of the drivers. now someone has to take the responsibility and charge for it, so there's a good potential for growth and profits as well. and it will probably be very fast-growing, but it does not replace automotive. so i think it is additional growth. the entire mobility turnover by

2030 can be twice as high as today because of such innovation. matt: but mobility, software, tack, it is not -- tech, it is not going to take over your business. you are still going to be a company that designs and builds cars to sell. herbert: very true. we think brands will remain. very important for the customer to make the choices, also to express themselves, so we will retain all of our brands. but technology will play a much bigger role. jonathan: that was the volkswagen chief executive herbert diess speaking with our very own matt miller earlier today. coming up next, we focus once again on the jobs data out of the u.s. we also talk about the fed and inflation with neil sharing -- neil shearing, capital economics chief economist.

we will ask a thing or two to neil as well. this is bloomberg. ♪

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♪ jonathan: --francine: welcome back to "bloomberg markets." emma: i'm looking at how european equities are performing today. they are in the green following their asian counterparts. not seeing much movement in the u.s., closed for labor day, though the futures markets are open. we are seeing solid gains across europe, up 0.6% for the stoxx 600. the ftse 100 also gaining around 0.6%. some of the takeover targets, or potential takeover targets, are driving the biggest gains, the likes of burberry. that is putting in a cell again today. a different luxury stock story emerging in france. looking at the cac 40, also gaining 0.7%.

the likes of lvmh carrying that. gucci and hermes also leading. last month, we sought bit of a selloff in luxury stocks as we heard about the new common prosperity policy out of china. a lot of investors running scared from that. but it seems that today, they are getting back into the sector , and that may be led by a couple of notes we are seeing from analyst, so this is taking a more nuanced approach to that common prosperity policy from china. analysts say it won't affect all luxury stocks in quite the same way, and he will still see an expansion of china's middle-class, even under common prosperity, and that is good for luxury. in a separate note from berenberg, we are seeing strong gains for lvmh. finally, moving away from equities, just something to keep an ion ahead of tomorrow, looking at the aussie dollar, we are seeing it is falling today,

declining by the most in about a week. this of course has elevated -- as elevated covid cases way on sentiment. -- cases weigh on sentiment. francine: thank you. joining us is neil she aring, capital economics chief economist, and with us do is eddie van der walt. how bad are some of these going to do in the western hemisphere? blue they be supportive for the markets because central banks are going nowhere? neil: that's a good question, isn't it? are we in that goldilocks situation where economies are still growing, but central bank's are keeping supportive policy in place? we have approached a point now where it is pretty clear that all economies across the western hemisphere are slowing. we have seen that in the data.

you saw that with nonfarm payrolls data on friday. we are seeing it in some of the business surveys, too. what is interesting is businesses are beginning to lay the groundwork for scaling asset purchases in the u.s. the easy be meeting coming up on thursday, very interested to hear what policymakers have to say. i suspect they might not want to taper asset purchases. so would got this juxtaposition between the data that has started to soften, the central banks spooked by inflation numbers surprising on the upside, and they are starting to withdraw some of their policy support. francine: i went to get eddie in on the conversation, but does it actually hurt your view that economies will fully recover

from covid post-pandemic? neil: no, we are not giving up on that view just yet. normally, when you get a scale of the crisis we have seen with covid, you only get the last economic hit. we don't think it is quite sane because of the unique nature of this crisis. i do think some of the optimism about growth is starting to be tempered out. just because of the extreme near a gains made in the first half, i think that is sharper than what was initially anticipated. francine: we have been looking at a lot of the data we got. i know we spoke at length about the jobs data. what is the data that will actually give you an indication whether we fully recuperate what

we've lost in the pandemic? it's not about the income increase in, it's about being at the same level had we been -- the same level we had been had we not had the pandemic. eddie: we've been talking about the beige book. for me, it is going to be about the anecdotal data. it is going to be about the market commentary or ceo commentary in pmi data. it is going to be about where are they struggling because i think we are entering a new normal, and we don't really know what that new normal is. there is some things that have changed as a result of the pandemic. some things will never quite be the same. but we still don't know with the full of locations of those are. so while raw data is really important at this point, i think the anecdotal, the high-frequency, and the things we struggle to quantify at this point, i think that is where the focus should be. francine: do you agree with that, neil?

overall, how bad was the jobs data on friday, given we had these inflationary pressures on wages? neil: i do agree with that. the other thing i would add on the data front is that though the pandemic has distorted the data, there's a number of different ways of just measuring when the economy shut down that are very difficult. that is why around the country, the data from business leaders is even more important. the jobs data itself, you're right that in many respects, the jobs number was weak, but we got the wage number being strong, which is good, clearly. so more than i -- more than

a whiff of stagflation in the data friday. but might we see the jobs that improve, given what is happening with the delta variant? eddie: you know, i completely agree with neil there. it is not hard to imagine that economies, their growth will start slumming at this point because it is just so difficult to keep growing at that pace that we had before. but at the same time, there is that fear. you mentioned stagflation, that we are in the middle of these kind of double dips. do you think that is a risk? neil: stagflation is a risk. i am pretty sure that what is going to happen over the next 12 months is going to start to drop back. look over the course of this year, and probably about their .9% in the increase in inflation this year could be attributed to

reasonably transitory factors. reopening effects, things like airfares and restaurants as economies are opening up. i think what is really interesting is due to second round effects, we have seen global shipping costs soar. that could start to happen next year, and the really interesting question in my mind is what is the central bank position, and are they starting to soften, perhaps viewing a little more inflation is a good thing? i think that is, to my mind -- francine: neil, if did, did stimulus stays on -- the accommodative stimulus stays on

for too long come does it just become in effective or harmful to the economy? neil: if using about the story of this crisis so far, when the first lockdowns happened, what happened was the service sectors were set to be shut down, which meant that spending -- we are now seeing goods sectors essentially operating at their capacity limits. there's not much more we can do for more goods production. so we've got a sense of how much demand is in the economy because it has had against the wall. demand will go into goods, and goods are hitting their limit. so if we do see do see

production been constrained by the virus, there's not much more we can do. eddie: i think neil just hit on a really interesting point to their about, you know, you can't ramp and economy up that is used to growing at 4% or so to 16% and think it is going to continue going. the problem is we saw this earlier this year when we saw the ship stuck in the suez canal. supply chains are so tight that when -- not a small event -- but when there's limited events that impact one part of a supply chain, it can bring a lot of industries to a halt. i think the same is not true of services. francine: the $1 trillion question. neil, my eagle eyes tell me you

have capital behind you. how many have you actually read? [laughter] because i didn't make it -- i thing i sent added 20 and then gave up and probably watched "love island." neil, thank you. thank u.s. will to eddie van der walt -- thank you as well to eddie van der walt. coming up, the interview with the chairman of daimler, coming up. we have a full round up of the german election. this is bloomberg. ♪ angel: oil extended losses today after saudi arabia slashed prices for asian buyers. that has raised the prospect of fierce competition among sellers.

this concerns because of a resurgence in the coronavirus that continues to sow the outlook for demand. singapore is the latest country to lift a ban on the boeing 737 max. the plane is now legally allowed to fly in and out of its airspace again after it was grounded for two fatal crashes. the max was also cleared to fly by malaysia and india. china has still not lifted its ban. there's a sign that banker travel in europe is picking up. london city airport, havard of regional business travelers, seeing -- a favorite of regional business travelers, seeing demand. the government is confident it can persuade key senators to support the president cost tax and spending package. last week, senator joe manchin

demanded what he called a pause in the economic agenda, but the chief of staff told cnn that manchin that the package adds nothing to the debt. a record-breaking weekend for the first marvel film featuring an asian euro. the movie "shang-chi and the legend of the 10 rings" blew past estimates and was the biggest estimate for a movie -- and was the biggest opening for a movie over labor day weekend. 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. i'm angel feliciano. this is bloomberg. ♪

francine: welcome back to "bloomberg markets." international flights made from

-- will be starting soon. -- from afghanistan will be starting soon. that's the latest from the taliban. bloomberg opinions foreign affairs columnist joins us now. bobby understands afghanistan like no one else. you were telling me the region which the taliban claimed they have control of, it is uncertain whether they actually have control, but it is a very strategic kind of region. bobby: it is a very difficult part of the country. it is mountainous, full of difficult to access valleys and ravines, and it is where, last on the taliban were a control of the country, they were unable to take charge of the country. that is where the northern alliance resistance against the taliban was able to hold out, and eventually, when the united states led the effort to get rid of the taliban, that is where the effort began, starting from the north. the delavan says they have -- the taliban has now said they

have taken control. we should regard that with skepticism because it is such difficult terrain. the fighters in the valley are saying that they have deliberately given up some of the low ground and taken up strategic positions in the high ground and the difficult to access places. that would make sense militarily. i feel like we need another shoe were to to drop to say with certainty that the taliban control the whole country. francine: the last time the taliban work in charge -- taliban were in charge, they were supported by allies. would this time be the same? bobby: there's other allies, india for instance, were crucial. it doesn't look like the resistance fighters who have fled to the pen share -- the pump share are getting that backing this time around.

of course, the taliban will make it their number one priority to get that valley as quickly as possible. francine: if the taliban get recognized as a legitimate state by the u.s. and western allies, is there anything that the taliban need to do in the next two to three weeks? would opening the airport give assurance to the west? bobby: they haven't yet announced their government, so the first and most important thing that the whole world is looking for is who is going to be actually running the government. the taliban have indicated that they are going to announce a government. they been indicating for several days. we were expecting one today. they have set again -- they have said that again. why the postponement? this is an organization that was basically in waiting to take over the country. if that is true, what is the hold up? until such time as we know who the faces are, and whether it is

an inclusive government, whether other groups and political affiliations in the country are brought into the government, i don't think the rest of the world will really begin the process of recognizing the taliban. their first got to be a government. so far, no one has because there's no government to recognize. the chinese have said they will recognize the government. the russians of indicated the same thing. the turks have hinted at the same thing. people seem willing, at least in some countries, do what -- to recognize the government, but there's got to be a government first. francine: i urge everyone to go and read his columns. in germany, less than three weeks until the auction. german power and carbon prices have surged to a record. environment two issues have been a key battleground for both parties. the country is europe's biggest polluter. let's get more from bloomberg's

maria tadeo in berlin. at the center of some of these priorities that people actually vote on, where does climate change feature? maria: if you look at polls and the breakdown in terms of priorities, the germans really care about, climate is almost 30% -- more than 40%, i should say, that say this should be the next big policy priority for the next coalition government. for a single issue to have double-digit concern and support in election poll, that is incredibly high. it does highlight that this is a conversation that frankly even i experience on a daily basis here in berlin. a lot of this is for a number of reasons. you do have the demographics come into play. the change of a new generation that is more involved when it comes to climate. you also have the german industry dearly pushing for new guidance. they say they need this in order to be able to compete in the future. everyone in the european union

says they need to be climate neutral, but the flooding is really having an impact on the german psyche. the fact that people died because of extreme weather in this country, something that has really resonated and put this to the forefront. francine: what can you tell us about the polls? are they constantly shifting? are they within a margin of error that makes it impossible to guess who will be in charge come the day after september 26? maria: the polls are running very tight. you make a good point on the margin of error because if you're looking at five points up and down, that could change everything. when you are pulling 25%, that would give both parties the option to form a government. but is clear is that the trend is being cemented. this is no longer a competition to get to the first spot. when you look at these particular candidates, when you

look at the numbers for armin laschet, he's not able to regain his momentum. they look worse because they've not been able to put a floor to his numbers. francine: what are the policy issues? i know the economy is left, right and center. how does the crisis plan to it and some other things that will influence voters on september 26? maria: the number one thing germans say they focus on more than climate is social justice. olaf scholz was on the campaign trail again over the weekend, and said he wants to see a society that respects each other. it continues to use that word. when you look at berlin in particular, there's a huge conversation around housing and how to make that affordable.

there's also a big conversation around the industry, how they for the bill, and how they should be participating in making this economy greener. of course, that exist into the perennial debate in germany which is fiscal spending. who's going to spend wet, and how much. the one thing that separates the greens from the list of the little parties running is that they say the next new investment going into greening and modernizing the economy should be exempt from the debt rules, and that would be a considerable departure from the usual line from germany, still a very fiscally conservative country. francine: thank you so much, maria tadeo in berlin. we are three weeks away from that election on september when he sixth in germany. coming up in the next hour, -- we have a pretty big week in terms of what we could hear from joe biden on the replacement or not of jay powell.

we could also have an rba decision from australia tomorrow, and we have the ecb thursday. i know we will look at markets, looking at what inflation means for futures. this is bloomberg. ♪

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♪ guy: monday the sixth. labor day in new york. i'm guy johnson in london. welcome to "bloomberg markets." it is a quiet session. the u.s. is out. it is sunny outside here in london or get as a result of which, volume down by around 50%. the stoxx 600 is a little higher. i think this is probably post payrolls. there's a sense may be that the

market is nine dissipating that we see a devastate for from the pet -- from the fed -- a market that is anticipating that we see a dovish tilt from the fed. let's talk about what else is happening in these markets. as i say, it is a quiet session, but there are a few things worth noting. emma chandra is here with the details. emma: you mention what is happening in european equities, inching towards another record high, so strong gains across the continent. i wanted to take a little but of a look under the hood of the stoxx 600. we should be able to bring up the function be terminal that shows you what individual sectors are doing for the stoxx 600 are good we are looking at a majority of them in the green.

it is really tech that is doing the heavy lifting, up close to 1.8%. consumer goods doing pretty well. when you look at the laggards, we are looking at real estate and utilities not doing very well. if we could look at that other big story of the day, you mentioned aluminum hitting its highest in more than a decade. we should be looking at a year-to-date chart for aluminum. that shows you how high it traveled already this year, caught on the back of that unprecedented global stimulus. of course, the moves today from the political unrest we are seeing in guinea. there, the concern is about a supply key to making alumina. analysts are worried about how much china will get. let's finally move over to few other movers for you. i would to bring you that --

sinking on steel coming out of china and the worsening demand outlook for steel. also need to look at the aussie dollar. elevated concerns about this -- about covid weighing on sentiment. we get the decision from australia tomorrow. finally, look at bitcoin, $51,000. it will become legal currency in el salvador tomorrow. eddie: i wonder if there will be -- guy: i wonder if there will be other countries to follow. we will start with aluminum and go from there. thank you indeed. as you already mentioned, the recent u.s. jobs report a bit of a mess friday. very much brings into question the fed's taper timeline. hiring downshifting abruptly in august, so wages were a little higher.

here's some of the reaction we got here at bloomberg to that number. >> it is a materially lower number. >> it is a weaker report. >> this definitely has some delta variant on it. >> this is elongating -- this is the long game coming out of a worldwide pandemic. >> zero jobs were paraded in leisure -- were created in leisure and has been healthy. >> we get some bounce back here in september. the market is looking through this and seeing that this is temporary. >> tapering is still very much on the table. >> the market is pushing back any taper announcement to november, maybe december. >> the most important thing not to lose sight of here is the emphasis that tapering is not tighten. guy: we will see. let's get some more reaction to this. another voice into the mix. neil mckennon -- neil mac kinnon, vtb capital global

macro, give me your thoughts. neil: it was certainly disappointing. the adp numbers gave us a pretty good steer, and it does suggest there might be some disappointments. but i think as far as the fed is concerned, this is slightly worrying. it may well bounce back next month. who knows? but a lot of the jobs growth was in the leisure and hospitality sector. dissipation rates, the things that jerome powell looks at. wage inflation i think is becoming more of a problem. i think we had the last five months gain an average earnings. that could present a problem for the fed at some point, and raise worries about stagflation that he just mentioned. guy: what does it do in terms of the timeline?

there was an expectation that maybe would start talking about tapering. do you think we will push that into a next year? neil: i think there's a good chance for that. there's an outside chance that it might not happen at all. guy: let's talk about that tail risk. why not? neil: the view in the markets is that there will be tapering. we don't know the numbers. we know that some presidents had been pushing for an immediate taper in terms of what they see for inflation or whatever, but i think fed chair powell will proceed quite carefully on the get from the market point of view, there's a possibility that they are expecting a taper and they may have to revise if next month's jobs report just

confirms that last friday wasn't a blip, and things will change. i do think we should consider as investors and economists the possibility that the fed might have to abandon the prospect of tapering altogether. guy: the delta variant was obviously being seen as largely responsible for the data we just got. the crystal ball for the next few months when it comes to delta is really quite opaque at the moment. it was simply high numbers within europe and in the united states. if we remain with these relatively elevated numbers, does delta continue to exert such a great influence on the employment prospects of the united states? or as we go back to school, as we get through labor day and people start to maybe think about returning to the office, do we end up with a more normal trajectory? neil: i think it is a big unknown, and it is very difficult for any of us to say with any degree of certain what might happen. there's always the risk that the

delta variant could get worse. but from the vantage point of where is the u.s. economy going to come of the global economy going to, if we look at many asian economies affected by the virus, affected by supply chain disruptions, there's already widespread evidence of a downturn in activity in many asian economies, not least of which into the chinese economy. that is very important. you mentioned just moments ago what it's been happening to commodity prices. that is a key factor related to what is going on in china. so we could have a situation where both america and china are slowing down at the same time. got a situation with the chinese central bank looking to tighten up for a regulatory point of view, whereas the fed wants to continue with a very accommodative policy. guy: what does that tell us about where we are in the cycle? neil: i think for the first half of this year, if you asked any

economist who came onto your show -- guy: i did. [laughter] neil: the story would have been of synchronized, sustained economic growth, gangbusters numbers, and all of a sudden, as we transitioned into the second half of this year, economists became a little more downbeat because some of the activity numbers were not as strong as expected. lots of downside surprises in the data, which is what we are still seeing. i think it's fair to say the consensus view is yes, we think there's a cyclical slowdown taking place that is probably temporary. we are looking for a bounce back is probably the consensus view, and the fed at some point will be able to implement some sort of taper. but i think there's a good chance that's not guaranteed at all. i think we need to see going forward, through september, october data, to assess what the situation is. guy: there's a lot of discussion

in washington on whether we will see the full range of bidens aspirations when it comes to what gets realized. joe manchin apparently persuadable, but we will wait and see. we may get the first package. we may not get the second package. if we get a lower number in that second package, say 1.5 trillion dollars, two trillion dollars, how does that change the calculus of the fed? neil: i think fed chair powell is aware of all of these things because as we go into october, the debt ceiling issue again, there's also a lot of the economists who have been monitoring what contribution does fiscal policy make to economic growth are shown that the so-called fiscal impulse is actually starting to fade. in other words, we have seen the best of what fiscal policy can do in terms of its impact on the u.s. economy. going forward, particularly into

2022, that fiscal impulse starts turning negative. we are seeing politically it is very difficult for president biden to push through totally what he wants. there will be a compromise come but for 2022, doing much more in terms of fiscal impulse is going to be very difficult. that's when a cyclical slowdown could easily translate into something that is a low bit more worrying. eddie: stick around -- guy: stick around. we need to talk about this through another lens, the ecb. we are going to hear from the ceo of daimler, coming up as well. that conversation coming up this is bloomberg. ♪ angel: with the first word news, i'm angel feliciano. the price of aluminum climbed to its highest and more than a decade following a military coup

in guinea. do west african nation is a major exporter of a raw material used to make the metal. the head of guinea's special forces says he took action to address financial mismanagement and corruption. the taliban say that international flights from dubai will resume. restarting international flights and allowing safe passage to afghans who wish to leave are key to the taliban gaining legitimacy overseas. banks are warning they are not ready for the european central bank's historic climate stress test next year, according to a survey of major european banks conducted by bloomberg. it is the latest sign that the finance industry is struggling to adapt to europe's ambitious goal of steering capital away from polluters. the ceo of volkswagen fears that the global trip shortage may last for years. herbert diess told bloomberg that semiconductors are in high demand and it will take time to ramp up capacity.

the chip shortage has been constraining auto production around the world. traders returned to the london metals exchange iconic open house trading floor today for the first time in 18 months. it was closed because of the pendant. traders fear that volumes will be sharply lower than the -- the pandemic. traders fear that volumes will be sharply lower than before because of the pandemic. 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. i'm angel feliciano. this is bloomberg. ♪

♪ guy: 70 minutes past the hour. this is -- 17 minutes past the

hour. this is "bloomberg markets." it is labor day and the united states, as a result of which, volume has been quite light in europe. the afternoon could get even bleaker from a volume point of view. it is also quite nice weather here in london. we are in a new range for the stoxx 600. we are around 460, 470. so for 75 the mid range now, up around 0.7%. volume is light, but it feels quite a positive session. take a look at the with the sector breakdown works today. i think this is the post payrolls reaction. u.s. futures pointing to a fairly positive story as well. this is ecb week. last week was payrolls week. i think it is the first time in five days we've got the dollar on the front foot. $1.1864. only down for the euro 0.1%.

the saudis are selling crude in asia a little bit lower. the commodities are probably the most interesting space this morning from a market point of view. of aluminum up by what ash aluminum up by 1% -- aluminum up by 1%. this is certainly something i think that will be worrying the chinese. it is also going to be a factor for the car industry, which is dealing with supply shortages on a number of different fronts at the moment. obviously we have been focusing a great deal on what is been happening with the chip sector. that's been a huge problem for the car producers, the truck producers. munich is kind of the epicenter of all of the action this week on the story. daimler's ceo a little earlier on speaking to bloomberg's matt miller, out at the iaa motor

show, finding a new home in munich, talking about the ev transition, talking about the chip shortage, the supply chain problems this industry is now facing. >> we are accelerating our path towards electrification, and we are really going to go for it to see if we can convert our whole portfolio to fully electric by the end of this decade. that is why we have brought four world premieres with us to this show. the beautiful eqe, the first amg , sophisticated luxury, an suv, as well as the fully electric g wagon. >> everyone is excited about the electric g class. tell us about it. >> we hinted yesterday at what the drivetrain will look like,

with four individual motors close to the wheels. all i can say at this point, it will be insane, so you have something to look forward to. >> what about sourcing the batteries? how difficult is that? do you have to scramble to get supply before your competitors eat it up? >> we have sourced our needs more or less up to 2025, or maybe a little bit yonder that, but with this new accelerated strategy, trying to be ready for 100% fixation by the end of the decade -- 100% electrification by the end of the decade, we are now ramping up for it we are talking to our partners. we are close to announcing a european initiative on the battery cell side as well. >> i assume across different parts, materials, chips especially, this has become an issue. how is the supply chain bottleneck affecting you? >> you have to go all the way down through all of the t

iers, and we are doing this in operations around the world, in asia, and europe, north america. we are talking to our partners about supply for all of those plans around the world. >> would do you see relief in terms of the chip supply? when do you see that opening up again? ola: we are hoping that q3 this year, which been hampered by men to close downs in malaysia, that that is the drop and we could start to get back on track again in the fourth quarter, but structurally it is something that the chip suppliers and the wave of producers are telling us will be with us to an extent here. >> you have been allocating parts to your higher-margin product, right? are you able to keep profitability hi with that strategy? ola: we always have a dual perspective with a strategy like this. of course, we keep the waiting

times as short as we can. but also looking at the health of your profitability, so when a balance between those two, we are trying to navigate through this can straight as best we can. eddie: how long does this -- matt: how long does this big demand stay on? ola: we have tremendous demand for this portfolio, and nothing to do with covid or any production constrained. we have the best portfolio ever, so now we are in a situation where this constraint meets probably the highest demand we have ever seen. guy: the daimler ceo. matt is going to be back a little later on. he's a massive fan of the g wagon. i am not sure how he will take to it being electrified. we will discuss that later in the program. the issues and that conversation a very germane to what is happening in the global economy. we are seeing shortages in terms

of materials. for the auto sector, it is a chip story. then he will come and aluminum story as well. there's also a wage factor which we are increasingly having to deal with, that second derivative which really starts to alarm. neil mackinnon, vtb capital macro strategist, still with us. that is what banks are having to factor, and i think they are really struggling with it. we clearly don't know how transitory some of the effects are going to be. labor is trickier once it becomes embedded, that maybe that shortage will rolloff, but what we are increasing -- what we are witnessing is an increase. neil: we might see some easing back, but as you said, 2022 is not going to be an easy ride. i think the supply chain problems that have been key for

the global economy, for all the major economies, are going to be there. on the one hand, we are seeing inflation pressures, and hoping that we will be transitory, although that has never been properly defined. we also don't know what the pain threshold for the central banks are. obviously they are willing to tolerate some sort of overshoot. all the major central banks are willing to do that. but how far does that over suit translate into a worry that they may be losing control? so handling that problem while at the same time ensuring that your economy stays on track is very difficult for the major central banks. guy: ecb thursday. event, nonevent? neil: a bit of a snooze fest, if i can say that. this one could be a bit interesting because some of the ecb presidents are talking about a taper, so we might have a

situation where the ecb tapers before the fed. so it is going to be interesting on thursday. guy: thank you very much, indeed. you'll -- neil mackinnon, thank you very much. ing -- ing's head of global strategy is joining us next. this is bloomberg. ♪

guy: approaching half past the hour, this is bloomberg markets. let's figure out what is happening today. the first thing to say is there is not a lot going on, particularly from an equity point of view. the details are all important. we probably should ask emma chandra what exactly is going on. dara: let's take a look at what is happening on european equities. the markets are closed and investors hope of fully taking a bit of a break before we get back to school. zero 600 dating .7%.

gains across the board for europe. the ftse 100 up. the cac 40 k-pop. -- the cac 40 up. for the ftse 100 we have burberry up around 2%. it is a takeover target. we have been hearing about how british companies have been very popular among those looking to takeover companies and u.k. is one of the best for that this year. also the cac 40 we had lvmh. gucci getting around to present today. -- to cheat gaining ground -- gucci gaining around 2%. largely to do with china and the announcement of the coming prosperity, a lot of investors rattled. we are seeing a move higher,

maybe on the back of a more nuanced analysis from analysts. an analyst saying it should not be seen this will affect all luxury stocks the same way. what is more important about the prosperity policy is it is about expanding the middle-class and that is good. that also echoed by the likes of berenberg and we are seeing that move into luxury stocks. pretty interesting on a day we are not seeing so much happening. we have been talking a lot about aluminum, i'm saying it right despite five years in the u.s.. hitting the highest price in 10 years. stocks moving off the back of that. we saw a lot happening in asian sessions. a big alumina maker is also getting dutch a big aluminum --

a big alumina maker is also -- guy: thank you for much indeed. we'll come back to the aluminum story later. boris johnson said to speak later today in the house of commons. facing a backlash from members of his conservative party of reports he is playing to hike taxes on workers to pay for social care, which is experiencing a funding crisis. joining us is bloomberg's emily ashton. boris will have a fairly tough today in commons. not only is he happy to do with follow-up from afghanistan but he is having to deal with a funding crisis. walk me through how the argument is working within the conservative party. disposal -- social care needs more money, it is it paid for by insurance or tax hikes? emily: social care is something

boris johnson has pledged to reform. he really wants to do this. he does not want covid to overshadow his premiership. he has also promised not to raise taxes. reports showing that considering a national insurance rise. that would hit the younger workers, there was -- those who've been affected by the pandemic the most, to protect the elderly people and help them keep their homes. lots of mp's do not think it is fair and there may be a fair way of doing it. that may well come tomorrow and that could lead to a showdown. guy: is the solution to the problem to fund the increase in social care via a rise in income tax which does affect pensioners , and therefore they will contributed to some of the

funding for social care? it becomes more generationally easy to manage? emily: i think that could be something they are mulling over. the reason we turn to national insurance sometimes is because psychologically people think of it as separate to a rise in tax and they see it as earmarked for health and more palatable to voters. there all of these things floating around. it is not paid by those of pension age and that is why mp's think it is unfair. labor has said they will not support the rise in national insurance. guy: some within the conservative party feel that the fiscal numbers are not as bad as they're being shown to be right now. there are some to the right of the party suggesting the fiscal position is much better come and as a result of which there will be no need to do any of this.

our lives to -- how realistic of a prospect is that? emily: we see reports of may be some good news rishi sunak could review. i think social care is something that requires fundamental reform in that system. it also requires, away from the money and the capital care cost, it is about -- this is what the campaigners have been telling me -- it is about recognizing carers and how much they are paid and respected. this has all been affected by other factors like brexit. it is not just about a capital care cost. guy: a huge shortage of workers which is manifesting itself in very difficult positions. thank you very much, indeed. bloomberg's emily ashton.

let's carry on the conversation. we are clearly watching the fiscal monetary debate heating up. we are starting to see the effects of increased fiscal spending in europe manifesting itself in the numbers. finance ministers and economy ministers gathering this weekend on the shores of lake como for a workshop. when get on the risk posed when it comes to inflation. we are seeing huge amounts of money pouring in to the economy. there huge amounts of demand as a result. the supply side not keeping up. is what they had to say from lake cuomo over the weekend. >> i do not think it should come as any surprise there is a spike in inflation. >> we are not concerned by the current level of inflation in the you or everywhere in the world. >> inflation is very much influenced by energy prices,

food prices. >> all the institutions consider it will be a transitory feature and we have to avoid if it becomes structural. >> we are seeing the increase is a temporary one. >> we are monitoring it, we should monitor it very accurately. without going to conclusions too soon. >> remain vigilant, but we are not concerned. >> is a natural feature of a strong recovery we are witnessing. guy: what does that mean for the ecb? what does that mean for christine lagarde. chris turner joining us now. we have interesting meeting with the ecb because they are not always that interesting. we are starting to see the hawks voicing their turn -- their concerns about the inflation prints we out of the euro zone. do you think the ecb in its entirety will be listening to

those concerns? will we see any change coming out of the ecb this week? chris: our key issue is the ecb would not want to be positioning themselves at tapering before the fed. they are very pleased with what was the weaker euro in late july or early august. we are seeing they want to be pretty careful about how they communicate, their policy, the pepp scheme is a pandemic scheme, and the hawks have been worried about whether that needs to be continued given the state of where the pandemic is. overall we think even though the europe might stay beat into the event meeting, afterwards the ecb will not take that step and reduce the pepp amount. guy: what is the upside on the

euro? we have a flirt with $1.19 last week. any idea that could be sustained? chris: it is probably sustained into thursday. for ecb day, it is normally about 50% for above normal volatility, which is the price this week, maybe creeping higher. the german elections, that certainly 30% or 40% above normal. to answer your question i think the euro can stay bid but it would be hard to break $1.19 on a sustained basis. guy: you think the german election will be a volatility event? at the moment it looks like that will not be the case but we do not know what the final traffic light will look like in terms of the coalition. my feeling from talking to people at the moment is nobody's particularly excited. could that change?

chris: the fx options market seems relaxed about this. the kingmakers, what price to they demand for their rolling coalition? obviously spd is doing very well in the polls at the moment. the market is quite relaxed, but i think we still have a couple weeks to go until the election and i think some more event risk could be priced in, giving the spd a greater say in any future coalitions. guy: have we seen tax rises in the u.k.? what impact does that have on sterling? chris: it is what is priced into sterling money markets. because of the bank of england communication the terminal rates for the bank rates are priced out of her future years. the market struggles to price that above .5%, thinking the

bank of england will turn to quantitative tightening, trying to shrink its balance sheet when the bankrate hits .5%. not a lot more to be priced in in terms of the boe tightening cycle. it might be interesting as we approach the autumn statement, any suggestion there will be tax rises or fix the fiscal holes could weigh on sterling at a difficult time politically as we look towards the end of the month. guy: the market is pretty short on the dollar. any chance we get a surprise out of the rba that could shake that up? chris: you are very right. one of the biggest shorts is australia on the back of the chinese slow down and the lockdowns locally. i think the market is positioned to push lake. those are tiny tapers. only talking about reducing

their purchases from 5 billion to 4 billion. even being resolute to tapering you could see moves on the upside. china, we have a big question about what is going on with chinese activity. it is a bit of a short squeeze in the aussie dollar. perhaps it not last too long. guy: always a pleasure. nice to see you. chris turner, ing london head of foreign strategy. next, we will take you back to munich and here part of matt miller's conversation with volkswagen ceo talking about the elongated ship shortage lead to stray. this is bloomberg. ♪

angel: u.s. secretary of state antony blinken goes to qatar for his first overseas trip since

the taliban take care of afghanistan. qatar is a major american-based and a base for people airlifted out of afghanistan. blinken says he will express gratitude for all that qatar has done for evacuees. hurricane ida has had more impact on golf of mexico oil than any other storm in history. 32% more than hurricane katrina in 2005. prolonged disruption caused by katrina and hurricane rita the same year led to the deferral of more than 160 barrels of oil production. the biden administration is feeling confident it can persuade a key democratic senator to support the president's $3.5 trillion spending package. joe manchin demanded a strategic

pause in the white house economic agenda but the president's chief of staff told cnn joe manchin should be persuadable by the fact that the package adds nothing to the debt. it was a record-breaking weekend for the first marvel film featuring asian superhero. the disney movie took in more than $71 million at theaters in the u.s. and canada. that blew past estimates and was the biggest opening for a movie over the labor day weekend. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. guy: this is bloomberg markets. i am guy johnson in london. let's take you back to munich. the semiconductor shortage will probably last a few years. that is the view from pw ceo

herbert diess. he spoke to matt miller earlier today in munich. herbert: we need time to get electric. we need the capacity. then it will take time. we are running a probably 6%. in germany, 20%. some of the countries already 70% to 80%. not norway or sweden or holland. it depends a lot on the local policies. policies are in place to change. could we be faster? the supply chains for batteries and capacities we set up are such that we are fully booked and we hope to grow, but we are aiming at 20% to 25% ev's, which

will be a tough target. matt: are you going to double your sales of electric vehicles every year? herbert: exactly. matt: in terms of the semiconductor shortage, it looked like for a moment it will be a bottleneck issue, and now there is a double-dip. how does that play out? herbert: we expected after the summer break the situation as we set up a lot of recovery plans to support additional capacity, but we suffered a setback through covid because in malaysia was hit hard by covid. semiconductor manufacturers hit us hard. we hope to overcome this new situation towards the end of this month or next month and then recover in the last quarter

of this year. as you said, always look for the first quarter and the second quarter. overcoming those crisis issues, probably will remain in shortages for the next month or even years because semiconductors are in high demand. capacity ramp-up will take time. it will be a bottleneck for the next month. guy: herbert diess, the ceo of volkswagen talking to matt miller. let's go from parsed airplanes. singapore the latest jurisdiction to lift a ban on the 747 max plane, now legally allied to flow -- now legally allowed to fly out and in of singapore airspace. this after it was grounded locally.

-- grounded globally. how significant is singapore? what i'm waiting for is china. >> this is definitely significant given that the carrier has a major exposure to the max and hoping to use that plane to open up ev before covid happens. in the sense of countries like india and malaysia -- once travel comes back will probably see the airlines fly more of the max. guy: how many does singapore have? >> i'm sorry? guy: how many maxs does it have? >> they have six planes at the

moment. they have flown these planes out of storage in australia while they were grounded. before this singapore airlines was getting ready for the reentry of the planes into service. guy: what are we going to see china giving the green light to the max? >> your guess is as good as mine right now. it really depends on how regulators think about it. maybe hoping so because it is a major market. your guess is as good as mine at the moment. guy: thank you for much indeed for the update. we are moving eastwards in terms

of the recertification of the max. coming up next, peter chatwell. looking forward to that conversation. we will look back to the payrolls and forward to the ecb. that conversation coming up next. this is bloomberg. ♪ andrew: i have an exclusive u.s. open update from tennis channel. leila fernandez hit the headlines again at flushing meadows as she reached the quarters at a major for the first time. the 17-year-old fought back from a break down. former champion angelique herbert and three small spending stats at louis armstrong stadium. naomi osaka -- after overtaking naomi osaka in the third round, fernandez produced a carbon copy of that performance to continue her cinderella run in the big

apple. the canadian fired 45 winners past the german to set up a meeting with the number five seed in the elite 8. do not forget you can watch all of the action from new york every night on tennis channel. ♪

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guy: 2:00 in london, 10:00 in new york -- 9:00 new york. labor day monday. equities are higher but volume is like. let's get the details with emma chandra. emma: is a low-volume day but we are seeing stocks rising. let's take a look at what is happening throughout the session. let's start in the agent session. eating a 31 year high. we are seeing stocks rise eight europe. inching ever closer to a record. seeing a lot of gains across european markets. it is labor day in the u.s.. u.s. markets are closed but futures are open. slight gains. up .2% for the s&p 500 futures

markets. we will see what that translates to tomorrow after everyone returns to work. we are into autumn or if our american politics were here we would call it fall. this function will show us how our kids are performing. i do not think we have that -- how markets are performing. i do not think we have that. we are seeing luxury leading the way as far as the cac 40. we are also seeing some of those taking the targets in the u.k.. the ftse 100 gaining 2%. the other big story of the date is aluminum. we saw it hit a 10 year high. we are looking at a year to date chart. i want to show you how it has been getting amongst all of the unprecedented stimulus. then today we get political unrest in a state in the west of

africa. the concern for investors is whether or not china, one of the biggest aluminum producers, will get enough of that. that is why we are seeing aluminum prices slide and seeing some of those aluminum producers spike when it comes to the market. not doing so well when it comes to other commodities. down 3.4%. this after steep curves out of china when we look at oil as well and we are seeing that sliding out of saudi arabia. i also wanted to mention the aussie dollar. that has been sliding. let's talk about bitcoin. had been getting but was still doing pretty well. the reason i wanted to look at it is it becomes legal tender

tomorrow in el salvador. anyone going on holiday there might be able to buy things in bitcoin. guy: the u.k. has already been a bit of a mystery but maybe we are starting to resolve that. thank, indeed. this week we are certainly paying attention to the rba meeting. keep an eye on the aussie. the ecb is probably the big event. the central bank holding at september policy meeting thursday. inflation in focus. his inflation high enough that emergency stimulus could start to be withdrawn? certainly a subject at the forum in italy over the weekend. european policymakers are downplaying their inflationary fears for the euro zone. >> i do not think it should be any surprise there is a spike in inflation this year. >> we are not concerned by the current level of inflation in the eu. >> inflation is very much

influenced by energy prices. food prices. >> all of the institutions consider it will be a transitory feature and we have to avoid it becoming structural. >> we have seen that this increase is a temporary one. >> we are monitoring it. we should monitor it very accurately. without going to conclusions too soon. >> we remain vigilant but we are not concerned. >> this is a natural feature of a slow recovery we are witnessing. guy: a very nice place to hang out over the weekend. the shores of lake como. joining us to discuss the issue is peter chatwell. the hawks on the governing council starting to get a little excited about what they see is a growing inflationary trend within the euro zone.

do you think christine lagarde will pay any attention? peter: i think because we have had three prominent hawks talking to domestic audiences in this way it was almost immediately after the 3% cpi print, then at least the market will be expecting that until thursday. if we consider european financial conditions since last meeting, they have got easier. there was less pressure on the ecb to keep things running at full pace, but the difficulty they have is if they are too aggressive in allowing things to tighten in terms of a slower pace, then they risk it backfiring. a very difficult communications challenge. guy: will they want the fed to go first? peter: i think we should differentiate between the

european central banks may be slowing things down a bit temporarily to give themselves room to pick it up the next quarter, while the fed is on the brink of or getting closer to slowing things down to stop their balance sheet expansion. the ecb is nowhere near stopping the balance sheet expansion. that will be years away. guy: if that is the case, do we need to start hearing about how they are going to restructure the pre-pandemic program to look a little more like the pepp, the emergency program, to give themselves more flexibility. we start seeing language around that? peter: that is the case and the clearest signal this is in the pipeline is coming from the chief economist philip lane. he made reference a couple of weeks ago to how tech was becoming less significant going

forward. but also that the ecb, if there is more supply of european government bonds in issuance, then the ecb has the ability to do a larger than pre-pandemic norm of atp execution than would otherwise be the case. this is very much like the ecb becoming committed to targeting financial conditions. if there is larger government bond supply than there was in 2019 then they have the capacity to increase accordingly. guy: one of the factors in the calculation will be the german election which thus far has not been that fascinating. when we get the results and if it were to turn out the fpd along with the greens control the next parliament, is it likely we will see more issuance

and that changes the calculation for the ecb in terms of the way they need to manage the process? peter: that is one example. i would think that given where we are, given how easy european financial conditions are and how many governments would be able to materially increase their fiscal usage with no -- with low or negative costs than if i were the ecb i would be hoping governments take advantage of these conditions and therefore need to be considering a larger quantum. we also have to take into account these programs are

already -- the investment flow is very significant. guy: when we look at what is happening in the ecb and what is happening with the fed, they in some ways feel like they are on different pages. the fed has made it clear that tapering is not hiking. do you think the ecb needs to bother with that? i find it very hard to believe anybody realistically believes the ecb will be tightening anytime soon. peter: there are people who continue to get wrong what the market got wrong in 2013, they do see tapering and tightening rather than a slower expansion of the balance sheet. i think the ecb should be very cautious in communicating this kind of slowing down, perhaps

temporarily, of the purchases to avoid an unwarranted tightening in financial conditions which would threaten to undo the progress they have made over the last two quarters. guy: the reason we are doing a lot of what we are doing from a monetary point of view is to deal with the effects of the pandemic. what is your assessment of what the situation will look like as we work our way into autumn. we are running at relatively high rates for the delta variant in many parts of the world. how cautiously do you think central banks are going to be approaching this? you think they are expecting in the euro zone to be on a steady trajectory out or are there going to be bumps along the road and that implies even greater caution? peter: i think there is solid macro economic evidence that shows when the number of cases rise, consumers become more

cautious. we have seen that in a number of economies. i think the central banks will be looking at this sort of evidence and it will be considering what the scientific community is projecting for future winter covid breakouts and also considering what if a new version of the vaccine is required and is that sloped rollout if the current vaccine was slow to rollout, what are those risks? i expect them, especially if inflation forecasts will be benign, they will be considering to run and easier than otherwise expected policy because of the downside risks. in an economy like europe or japan where inflation is not a structural problem, therefore they have the opportunity to run policy on the very easy side. guy: stick around.

we need to talk about friday's payrolls numbers. we need to talk about the curve steepening we saw last week. come back in just a moment and will try to figure out what the fed will get into next. a focus on the payroll number. it is important. we will do that next. this is bloomberg. ♪

laura: the price of aluminum climbed to its highest in more than a decade following a military coup in guinea. the west african nation is a major exporter of the material used to make the metal.

the leader says he took action to address financial mismanagement. the taliban says international flights from afghanistan will resume shortly. both katter and turkey are helping restart operations at the kabul airport, allowing safe passage -- allowing safe passage for afghans who wants to leave is key to afghan -- is key to the taliban legitimacy. -- the latest sign the finance industry is struggling to adapt to europe's ambitious goals. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am laura wright. this is bloomberg. guy: thank you very much. it is labor day in the states. a good opportunity to recap friday's payroll numbers.

hiring downshifted sharply in august. the economy added fewer jobs than expected. a low bit of speculation on what the fed's next step will be. we talked to a range of guests about the subject. >> this was a materially lower number. >> it is a weaker report. >> this has some delta variant on it. >> this is coming out of worldwide pandemic. peter: there is one huge red flag for me. >> zero jobs are created in leisure and hospitality. >> we had zero gains in that area. >> some bounce back in september. >> tapering is still very much on the table. >> the market is now pushing back any sort of fed taper announcement to november, maybe december. >> the most important thing not to lose sight of is the emphasis that tapering is not tightening.

guy: tapering is not tightening. if i were to say three words away from what we just heard, it is temporary, taper, and delta. delta certainly having a meaningfully impact on the numbers, policymakers at the white house flagging that. as we go into the fall, are we going to see a pickup in numbers, are we going to see what we have just seen friday being replicated over the next few months or was it just a blip in we bounce back next month? these are key things the fed will have to focus on. peter chatwell also looking at these issues. what was your take away? peter: this was not a massive setback for the economy. what it was was a big setback for the hawks who have been championing at the same time we

have this labor market recovery we also had inflation running out of control. we simply do not buy that inflation is running out of control. what inflation is doing is running hot. we can see the evidence building that the inflationary pressures are starting to decline. they are still running above the levels it was running over the last decade. out of control it is not. therefore an earlier tapering and tightening is not what the doctor ordered. for those that want the u.s. economy to be able to escape the liquidity trap, that is. guy: if you take a look at the numbers, the one thing that did stand out was while the overall number was low, the wage number was starting to pick up. it had been picking up for some time. it is that second round inflation that central banks fret over. peter: that sort of wage

strength minus the function of some of the jobs we were not created last month being in the lower paid sectors. more generally on the discussion of wage growth, we really do want to see it higher if the u.s. is going to credibly be able to sustain a core pce level of 2.5% over the next year. that is the sort of level we see it coming in at and we would expect the fed would be looking through that and not urgently tightening in response to that. wage inflation is a necessary part of that, otherwise simply the u.s. does not get out of this trap. guy: the curve steepen a little bit. there is the expectation may be things start to get a little tighter on the short run and we get more supply further down the road. what you think the taper

timeline looks like right now? peter: what i am assuming when plugging numbers into our model is taper is announced somewhere around november. could be earlier, could be later. the taper in earnest begins in january and is finished by around july or august. what matters in my mind, given the amount of liquidity, is when does the tapering finish and what is the terminal size of the fed balance sheet? what is crucial to me is that taper timeline has been effectively decoupled from the timeline of rate hikes. guy: we will leave it there. a question coming in from a viewer on the ppi number we have coming up. we will leave it there.

always great to get your input. peter chatwell joining us. coming up, we'll hear from the vw ceo on his companies push into self driving technology. software huge part of what he sees the company doing next. this is bloomberg. ♪

guy: the merger show is on in munich and the vw ceo sat down with matt miller earlier today. he was talking about the semiconductor shortage that has been plaguing this industry, indicating it might last months or years. he is also pushing this company very hard when it comes to not just the mechanics of ev's but the software that goes with it. herbert: we need time to get electric.

we need the capacity. plans for better retail will take time. -- in some of the countries already 70% or 80%. norway, sweden, holland. it depends on the local policies. where policies are in place, we are very fast. could we be faster? not a lot. the supply chains for batteries, for the new technologies we set up our such that we are fully booked and we hope to continuously grow. we are aiming at 20% to 25% ev's , which will be a tough target. matt: you're going to double your sales of electric vehicles every year? herbert: exactly. matt: in terms of the

semiconductor shortage, it look like for a moment it was going to be a bottleneck issue and now there is a double-dip. how does that play out? herbert: you're absolutely right. we expected after summer break inflation as we set up a lot of recovery plans for additional capacity. we suffered a setback mostly through covid in malaysia was hit hard by covid. that hit us hard. we hope to have a new situation towards the end of this month, probably next month, and then recover in the last quarter of this year. as you said, always look up from the first quarter and the second quarter. overcoming those crisis is use

-- those crisis issues will remain in shortage for the next months or years because semiconductors are in high demand and the capacity ramp-up will take time. it will be a bottleneck for the next month. guy: herbert diess, volkswagen ceo talking to matt miller in munich. in some ways herbert diess is trying to model himself on elon musk. a push on the same lines musk has been pushing himself along. the share price ramped up. coming on sideways since then. this is what markets look like. european markets higher but unlike volume. it is labor day state side. this is bloomberg. ♪

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laura: let's check in on the first word news.

u.s. secretary of state antony blinken flew to qatar for his first overseas trip since the taliban take of afghanistan. qatar is a major american military base and has been a base for thousands of people airlifted outside of afghanistan. antony blinken says he will express his gratitude for help with the evacuation. hurricane ida has had a greater initial impact on the gulf of mexico oil than any other storm in history. it has been responsible for the loss of 16.8 million barrels of output in the 10 days since offshore platforms were evacuated. that is 32% more than hurricane katrina. the loss called by hurricane katrina and hurricane rita the same year led to the deferral of more than 160 million barrels of oil production. singapore is one of the most vaccinated countries and is still taking new steps to slow a ramp increase in the coronavirus and the government is not ruling out a return to closing

restaurants and restricting public life. serous infections continue to rise. among the latest steps, more mandatory testing at jim's and social care services. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am laura wright. this is bloomberg. guy: let's carry on with that theme laura was talking about, what is happening with the evolution of covid. the white house hopeful shots will pick up. dr. fauci saying boosters likely to start with the pfizer shot. we will see what happens with the other shots. amesh adalja joining us now, senior scholar at the john hopkins center at the bloomberg school of public health. there was this expectation that post labor day we would be on a trajectory to return to normal.

kids are back in classrooms, office workers back at their desks. things are slowing to look a little bit different. what is your expectation for what the fall will look like? dr. adalja: we have to expect we will see an acceleration of cases as we get into a season that is colder, that is less humid, where more people are indoors. the virus is not going anywhere. it has established itself in the human population. our goal has been to remove its ability to cause serious disease. we were already have a number of cases, hospitalizations, and deaths. in parts of the united states were vaccination levels and immunity levels are low, they make it into trouble again with translation into hospitalizations. we have a two track between places heavily vaccinated and other places where there's not much immunity so they still remain at risk. guy: let me focus specifically

on the northeast. it looks like we are seeing a peak in cases for the south. the weather is about to turn more inclement. we will start seeing that around halloween. is it your expectations that we can manage this process now without serious restrictions? dr. adalja: i think many states will be able to manage cases and hospitalizations without restrictions. what we are trying to do is find a sustainable approach to live with the virus because it was not going anywhere. with vaccination and rapid testing in teaching people how to make risk calculation about which activities are safer, you will have some ability to manage and away way we have not in the past. we are trying to decouple cases from hospitalizations. that is already the case in many

northeastern states where there is a lot of immunity. we are not seeing hospitals in crisis. hospitalizations have went up but nothing like we are seeing in the south. guy: the israelis will brief u.s. health officials over the next few days as to what they are seeing. israel has seen a sustained pickup in cases and a return to restrictions. why will the united states be different? dr. adalja: this is mostly going to be a different policy choice. i do not think the united states will be issuing restrictions if we are just trying to stop breakthrough cases in vaccinated individuals. most things in the united states are gauged towards hospital capacity, and we have hospital capacity problems in some of the southern states. even with delta variance picking up, we are not singing translate into hospitalizations. i do not think everything israel does will be applicable to the united states because we have different goals.

our goal has always been to tame the virus, remove its ability to crush hospital capacity. because this is an endemic virus it will not disappear. i do not think those two approaches will be congruent. guy: when we first started with this crisis, covid-19 was a disease of the elderly. is it now becoming a disease of the young, and if so what we need to do about that? at the moment that is where the cases are popping up. dr. adalja: covid-19 is now a disease of the unvaccinated. it just so happens that if you are unvaccinated you are more likely to be younger. if you look at the united states , people under 65 are 80% fully vaccinated. that will ship to the virus to younger people. we know that is why hospitalizations are different and deaths made to be different.

-- younger people may be spared for the need for hospitalization. what we need to do is emphasize the fact that if you're younger and think you are impervious to the virus, getting the vaccine as a way to prevent any of those negative consequences from happening to you and prevent you from spreading to other people. this has been difficult. we have hit a wall of vaccine hesitancy and it is in the younger age groups. if you look at who is getting infected is younger people because they are not vaccinated. some of them have high-risk conditions. we are seeing a shift in hospitalizations to younger people with high risk factors like diabetes and hypertension. guy: a lot of what we are talking about is 12 to 18-year-olds or maybe a little bit into their 20's. the question increasingly being asked is what about the under 12 as they return to school. physiologically they are different than their adolescent

older brothers and sisters. i am wondering whether or not you think we start seeing vaccinations for that younger group this fall? dr. adalja: it is likely the case in late fall pfizer and moderna make it emergency authorization for children above the age of five so we will be able to vaccinate those individuals. that group tends to be spared from severe disease. for them covid-19 is similar to flu, or maybe less severe. this is something that is optional but will happen in the united states because we have the priority of keeping in persons pulling going in children are damaged so much during the pandemic because in person schooling is suspended. vaccines are one way to keep schools operating as close to normal as possible. this'll be something that happens in late fall. guy: rsv is something that hits this age group pretty hard. the flu tends to hit the older

age groups. we've not had to deal with it for a year or so. how bad will it be this autumn? how bad will we see these complicating factors in terms of having to deal with covid and having to deal with the return to normality and keeping people out of hospital? dr. adalja: we definitely are going to see an uptick in other respiratory viruses. i've taken care of patients with other respiratory viruses. rsv has been kicking up. in the south we know hospitals got hit hard, and that may be because rsv had not been transmitting, people's immunity may have shut down and now it is coming back. we have to prepare for rsv to impact children and is something pediatric intensive care units are dealing with. the flu is a wildcard because we have not seen flu for a season and a half.

we know it circulates between the southern and northern hemisphere, and the southern hemisphere still had a very nonexistent flu season. it is unclear what percentage of the population is going to get influenza or how heavy it will circulate. it is still something there is a lot of uncertainty about. the other respiratory viruses are going to be there as people start to socially interact. you will not get a respite from all of the polls. guy: always a pleasure. useful insight. thank you ray much. dr. amesh adalja of johns hopkins bloomberg school of public health. it is supported by michael bloomberg, founder of bloomberg lp and supported philanthropies. we will take you back to munich. the porsche ceo is standing by with matt miller. that is coming up. this is bloomberg.

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guy: the show is underway in munich. matt miller knows his way around. he feels perfectly positioned to talk to the ceo of porsche. are you having fun? matt: yes i am. i am very happy to be back at an auto show. to be honest, i'm even happier to be standing in front of a porsche. i am here with the ceo, oliver bloom, and we are standing in front of the mission r which is your new concept electric racecar. tell us about it and how likely the are to see this coming into production? oliver: the mission r is our

concept idea for future motorsports. as you know from porsche we look at the starting of mission e, porsche always stands for dreams come true and behind the fantastic motorsport, horsepower and a top speed of over 300 kilometers per hour -- 1000 horsepower. could become a reality in the future. torture -- porsche owns -- matt: 300 kilometers an hour. about 187.5 miles an hour. how likely are we to see an actual series with these kinds of cars? right now we have the formula e

but this looks more like a dtm car. oliver: that's right. when we develop a concept like this we have already thought about which technology we can transfer to our future serial cars. as you remember, we launched a system. we were the first in the automotive industry to work on the system. we have a new battery system inside and several technological -- it is always late to future production. matt: i saw one upstairs and i've seen a lot in real life lately. is it outselling the 9/11 already or do expect that to happen? oliver: we think there is not a competition between the 9/11. matt: but who is winning? oliver: both are fantastic and

volume has never been the driver. we are at very positive levels in all of the intake, but also of the 911. we can say both of them are very successful. matt: the italians are pushing, reportedly, to break exemptions and continue to produce internal combustion engines past 2035 for lamborghini and for ari. would porsche want to do the same thing? would you want to keep producing internal combustion engines? oliver: we have a very ambitious state -- a very ambitious sustainability story. we want to be carbon neutral by 2030. i think decarbonization is a global question and everyone has to contribute. now we're are in a transition period and there are also solutions. porsche is investing in a pilot

installation to produce fuels done by hydrogen. these fuels can be used. our aim is to reduce the co2 about 90%. that might be an option. in the next decade, i think electro mobility will be unbeatable. matt: you will not phase out the motor, right? the 911 will continue past 2030. oliver: we have a clear strategy we will offer for our customers and friends in the next years in each of our segments. the combustion engine, the hybrid engine, and the electric engine. therefore we will be flexible. for the 9/11 we created the idea and run the 911 with the

combustion engine as long as we can while we are offering other products 100% electric. matt: i wanted to ask about china because i heard an interesting fact. your youngest buyers are in china. you have three main markets, the u.s., europe, and china. are they also the highest margin buyers? oliver: china is a very important market for porsche. besides north america, where we have europe and the rest of the world, china counts about one third. the youngest buyer of warsh, the average age is 35 only. that is a big potential for porsche to get all of these young chinese friends for our brand and therefore we are looking forward to how the market will develop. intakes in china are fantastic.

we had an all-time high in 2020 and this year we are going for another record year. matt: you are not concerned about new regulations, the idea they want to redistribute wealth, you are still going to sell as many porsche there as you can? oliver: we are not worried. we are prepared. from our technology and sustainability story, but also all of the investments we do in china. at the end we can count on our friends in china. guy: you are talking -- matt: you were talking about the battery supplier you are working with, custom sales i believe it is called. everyone is scrapping to get battery production. what is the supply chain situation looking like? oliver: we are working together with the volkswagen group sharing batteries. our investment is for the top segment of the batteries. we think this will cause porsche

to invest there. high-powered entity, new technology, fast charging and therefore we are resting there. the semiconductors is another story and we are fighting hard to get the right volume of semiconductors. we have to rethink the whole supply chain because the demand from semiconductors will be even higher in the future and therefore we are working together with our colleagues from volkswagen where we think how to organize the supply chain in the future. matt: i talked to herbert diess this morning. i just saw wolfgang porsche upstairs. how does the idea of the possibility of a porsche ipo playing out right now? surely the company is worth more than the sum of its parts and you can monetize that by selling

a small piece. how those guys feel about it? oliver: is not our decision. it has to be taken by volkswagen group. on the one hand, we have a lot of synergy with the volkswagen group. on the others, there are a lot of opportunities in this direction. there is nothing decided. at the end it has to be done in volkswagen group. matt: it is still interesting to you. as a ceo you think you could run the business well if they sell a chunk of it. oliver: there has been a lot of rumors because of the success story of porsche. porsche stands for a consistent financial situation when you look at the financial results in 2020. the first half of 2021. we have an electrification story . 50% of cars electrified by 2030, then sustainability, carbon neutral by 2030, and then our

technological business we do. this combination makes it interesting. there are a lot of rumors in the markets. matt: thank you so much for joining us. oliver bloom, ceo of porsche talking to us at the munich autoshow. guy: good job pushing on that ipo. i notice a big story everybody is focusing on. interesting we spent so much time talking about the concern around internal combustion engines. what is going on next in the 911 ? we will be back with matt later to dig into that story more and see whether electric cars are the way forward in a rapid manner when it comes to that sector. this is bloomberg. ♪

laur it is timea for the bloomberg business flash:. i am laura wright. there is a sign that bankers travel in europe is picking up. the london city airport is seeing a reawakening. british airways and lufthansa have restored flights to keep financial centers such as zurich and rotterdam. the london airport offers easy access to the city of london. mercedes-benz has come out with its second plug-in char. it is debuting this week at the munich autoshow. mercedes hopes the car will coast on the success of its new flagship electric sedan. this was a record-breaking weekend for the first marvel film featuring an asian superhero. the disney movie took in more than 71 million dollars at theaters in the u.s. and canada. that blew past estimates and was

the biggest opening for a movie over the labor day weekend. that is the bloomberg business flash. guy? guy: laura, thank you very much. let's talk about the markets in europe. equity markets at session highs. volume is light. the u.s. is out. we are still digesting the payroll number friday. good news is bad news and bad news this time around is good news for equity investors. the dollar on the front foot for the first time in five days. not much, but you can see movement when it comes to brent and other commodities. aluminum up sharply. we will talk more about what is happening in guinea later and we will also talk to stuart kaiser of ubs in the next hour. this is bloomberg. ♪

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states, i'm guy johnson. welcome to bloomberg markets. session highs for european equities. let's get what you need to do. chandra: we've got u.s. markets as you mentioned. it is labor day and the u.s. stocks are rising with some records rolling. we've got japan closing at 1.8% higher in hitting a 31 year record. there is a new prime minister. in europe, the europe 600 is up. it is trading at session highs and inching toward a record as well. we mentioned u.s. is also closed. futures are open as we see them rise around 0.2%.

they are assessing what happened on friday with the weekend jobs report. how that may impact potential tapering of stimulus in the u.s.. with the ecb coming up, with their central bank meeting, we've got the function show you what's happening in europe with the stoxx 600 in terms of indices groups. it is technology stocks that are doing the heavy lifting. i want to talk about the group just below that. that is the consumer stocks coming in with a solid gain it today. we see within that, it is the likes of christian dior that is rising, all gaining more than a two percent. it seems it investors may be reassessing their initial reaction to that policy we saw out of china last month. that caused a selloff in luxury stocks we are seeing one chart here.

we are seeing a number of them with a new nuanced approach of what the policy might mean. the policy is still going to mean the middle class in china. that is going to be key for luxury stocks. the other story today is in the commodities. if we look at what's going on, we are of 1.4% today, hitting that decade high. producers are put in a solid gain there. this is due to that political unrest we saw. these are concerns over supply, key to producing at a minium. we saw that reversing now. rent crude is up 0.1%. it had been in the red by a great deal more than that. saudi arabia may be cutting

rices. guy: we will get back to the at a minium a story later on. let's talk about what's happening. that is the payroll story friday. u.s. hiring was down sharply in the month of august. they added fewer jobs than expected last month. the fed's next steps could be to defer that taper. this is what our guests had to say. >> this was a lower number. >> the first read is this has some delta variant on it. >> this is a long game coming out of a pandemic. >> this is one huge red flag. >> the restaurant number. >> zero jobs are created and hospitality. >> you will get some bounce back in september. the market is looking through this. this is temporary. the fed is going to taper.

>> the market is pushing back. it may be december. >> they don't need to rush into it. the most important thing not to lose sight of his tapering is not tightening. >> this is another voice on the subject. guy: thank you for your time today. we really appreciate it on the holiday. we just had a payroll report that indicates the fed decides to defer its taper, pushing it into next year. is that a reason to renew the equity push? >> thanks for having me on. a huge thank you to our central workers and the servicemen and women. we do see even with the jobs report, this gradual recovery for the second half of 2021. a key risk is going to be covid

in the global economies. with rates staying so low, we do feel there are opportunities within the equity markets. you have to pick your spot. we do see areas of elevated risk in those hospitality and travel industries. that does mean opportunity that we see in the tech knology and health care sector. guy: what we saw was a big bet on tech. is that the way to go? >> that's what we see from the unstructured data cited. big corporations are struggling with the concern about the office. we do see some continued demand for these productivity software's. also in the medical device area, we continue to face significant amounts of pressure. one of the ways we see that is

huge demand for health care and health care related workers. with an overall shortage of those individuals, different devices and technology, that will be highly in demand. >> one of the things to your point that came out of the labor report friday was wages are going up. you say there is a shortage of workers in key areas. we are seeing wages go up. we are not seen the labor market improving. what we may be seen is key constraints. i'm wondering how to think about the equity market. what should i be looking at? is this sustainable? isn't this going to eat into the p&l? isn't that going to hit margins. >> there's not going to be a

straight line growth story. younger americans are going back to school. we see data on high risk exposures in the classroom. we see that continue to spread. however, with that data, we still feel there are opportunities for growth. we are going to push forward and we are still bullish on key geographies. technology focuses on software as well as health care technology. guy: when we look into next year, is this going to be the case? it feels like longer-term trends you are alluding to. are we going to revert back to the most cyclical recovery? when does that happen? hospitality sector is struggling. we see problems with delta,

especially down the south. that could be a more tough story in the northeast. is this a tactical story? is this more structural story? >> it's very much a data-driven environment. that's why we believe that ai powered investing is the way to go. harnessing big data to help you determine your investment exposures. the delta variant is a problem. we see other variants that may have vaccine resistance. depending on the different geographies and areas, we will continue to see differentiated forms. i do feel investors need to be wary of some of these different risks. we do see a progression. we continue to see improvements across the board as far as

profitability. being careful to pick your spot, some of the names we like our alphabet, guy: what you see as you crunch the data? i'm trying to understand where we are in the economic cycle. i am looking for clues anywhere i can get them. what are you seeing? >> we continue to see a gradual recovery. even with the muted jobs growth number, we see individuals returning to consumption. this is in areas of productivity. we sue the workforce trying to resume this new normal paradigm. we continue to see that until the data, until our situation with covid continues to change.

when you see that change, we are going to adapt. the thing we see from big data is people are negatively impacted. you can't hide from the big data showing up. from that perspective, we feel we have the use authorization for some of the vaccines. we are still waiting to see the fallout there. it remains outdated in the investment environment. guy: in terms of long term haverhill shifts, what are you able to deduce? >> we are going to continue to see a polarized information environment. as a result of a variety of different factors from social media and other forms of media, you see a differentiated response. what you see our tactical

opportunities. especially with covid, you tend to see areas where you can pick and choose your spots. that's why we are bullish on the technology and names. we continue to see that demand into 2022 for health care workers and other technology workers. we believe those sectors will continue to see growth and demand. guy: enjoy the rest of the long weekend. thank you very much for joining us on this labor day. thank you very much indeed. up next, we will be returning to the metals market. there is political unrest in west africa. that fuels supply concerns for china. we will get the latest on that story next. this is bloomberg. ♪

vasileios: the taliban said that international flights from afghanistan will resume shortly. they are hoping restart operations at the airport, they are allowing safe passage to afghans who wish to leave. singapore is one of the most vaccinated countries. it is taking new steps to slow

the coronavirus. the government is not really not a return to closing restaurants and restricting public life. more minute tory testing for high-risk environments such as gymnasiums and personal care services. the price of adam many him climbs to its highest price. it is a major exporter of the raw material used to make the metal. special forces that he took action. he urged mining companies to do the same. global news 24 hours a day on

bloomberg quicktake with journalists and analysts in 120 countries, this is bloomberg. y:hank very much indeed. i'm a little confused. there is a big knee-jerk reaction. there is been a potential coup and a supply for china. walk me through what the issue is. it >> there is an overreaction to what is happened so far. we have not seen disruption yet. there is no indication that there is going to be supply disrupted. i think this is part of that story where commodity markets are tight. they are tight in specific places. there is enough aluminum out there. they are in the wrong places. china is importing aluminum.

they should not be importing. this is just showing you that supply change stretch. when you put pressure on those supply chains or hint that you are going to, you see prices react. guy: in terms of how the chinese are going to deal with this, it is part and parcel with this. iron ore and aluminum are two different things. they need less iron ore and maybe more aluminum. that could be used for a variety of different things. there are a lot of reasons why. how do we think the chinese might react? >> i think china will keep a close eye on this. energy cost is big for the aluminum market. that will be interesting to see. we don't know yet.

china has levers that they can affect the prices, particularly in the aluminum market. they are such an important consumer. guy: what is happening with iron or? the chinese have talked about wanting to slow down steel production. they are talking about the fact that they would like to see that happening. we see this drop in the iron ore price again. >> i think it is at a different place. and we talked about a super cycle, we are not talking about all commodities. we are talking about specific metals used in the electrification, the story of the future. aluminum is part of that story. copper is a bigger part of it. they are used in the production of lightweight cars. that is a big part of that story. iron or isn't.

it's the commodity on which china built its growth up until now. it's not going to need it as much going forward. they are getting away from that kind of growth. guy: maybe from the construction boom they are seeing at the moment. common up, we're going to take you back to the munich motor show. we will hear from the coo, he will be joining us as well. i want to talk about what's happening on the ground with this motor show. that will join us shortly. this is bloomberg. ♪

guy: it is 21 minutes past the

hour. this is bloomberg markets on labor day. the ceo wants to differentiate its offering from the rest. he spoke to matt miller. >> let's start with the separation from volvo when it comes to product. it will be the next biggest step, very much different with the design and its a very drive oriented powerful car. it's a different premium position. it's actually sharing the future technology. that is our common ground. the body we build on it is very different. it's a very different suv generally. we're very excited about that.

we are our own company. that means different products. it means a company that is on its own two feet. that is connected to our funding story. >> how about the idea of an ipo. have you decided how you want to do it? >> funding, we are exploring all the directions. we are still in the decision process. matt: what about sales, production? how do you want to grow the company? we have heard you might be building in the u.s. >> that's not a maybe. that is fact. that is one of the things where

production will be worldwide. we have a very big expansion of markets in europe. this year for example, going to 30 locations in the u.s.. that is us, that is the end of 22. that is unheard of. matt: what sales goals you have? how many units do you want to produce? >> it's a very clear brand. it is not a niche brand that is just about hand built. we clearly have expectations. we are going for the 100,000 target. we want to double that in a couple of years. we have respect for the time it will take. we want to do it with substance.

guy: they used to be the volvo super tuning area, now it's a standalone company. matt is on the line now. this motor show must be a bittersweet moment for you. there are a lot of motors but not a lot of engines. matt: to be honest, there really aren't that many cars here. a lot of carmakers have just given it a miss. audi doesn't have any cars. none of the brands. dodge, chrysler, fiat, they've all skipped it. even the carmakers that do have stands, they don't have that much product to be honest.

portia and lamborghini are holding meetings off site. i am sitting in the portia right now. this is just sewing -- showing one concept car. they don't have a lot of world premieres. it is focused so much on batteries and self-driving technology, the stuff that bores me to tears. it will be more exciting when they start to make revenue from those. guy: i think that's a depressed matt miller, despite the fact that he is sitting in the porch area. matt will be joining us a little bit later. this is bloomberg. ♪

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pipeline is almost about to going to operation. it's a link between russia and germany. it has been welded. the idea is to be operating before the end of the year. the u.s. has said it could give russia new leverage over europe and introduce sanction. president biden has softened the stance. hurricane ida has had a greater impact on the gulf of mexico oil than any other storm history. it is been responsible for the loss of six point million barrels of output -- 16.8 million barrels. prolonged disruptions caused by katrina and hurricane rita the same year led to one junta 60 million barrels of oil production. the secretary of state flew to qatar for the trip since the taliban takeover of afghanistan. it's a major american military

base has been a gateway to thousands of people airlifted out of afghanistan. he expressed gratitude for all they have done to help the evacuation. global news four hours a day on bloomberg quicktake, powered by 2700 journalists and analysts in one junta 20 countries. this is bloomberg. guy: thanks very much indeed. global stocks are up for a seventh day. today, you can go off to one side. futures are trading. they are rallying. this may push out the fed taper. joining us now is the head of equities and derivatives. what is the message we should be taking away from the payroll?

>> good morning. i think the markets are going to look past the data. the consumer survey work and things of that nature things are starting to improve. hospitalizations have turned a little bit lower. it does weaken the case a little bit for an earlier taper. equity invaders will look at this as a one-off and frequency data shows it probably will be. it probably does put added importance on the next couple of payroll reports. the market continues to rally. it puts more focus on upcoming data. guy: what do you do if you are concerned about equity market levels even what you just laid out. the market is going to be bumpy.

what do i need to do if i am looking to protect my portfolio? >> i think it's a great question. it has to do with how you are positioned. some hedging is probably warranted. that hedging we've seen recently is much more in large cap tech. it has a lot to do with taper. people are worried about the impact of rising rates on that part of the market. this is much more of a growth concern. they are probably going to end up with things like the s&p 500. it would be much more impacted if the reopening gets in the way or stumbles a bit on this data. what we've seen is people hedging the higher rate story. if the growth concerns become an issue, you will see small-cap and maybe banks.

i think it's a little tricky. if your hedging growth, the answer is the other way. what we are seeing is much more on the right side and people hedging taper. guy: august normally provides a little bit of volatility. it didn't this time around. is that just deferred? is that gone? it got up a couple of weeks ago into the below 20. i've been through august where the number is higher. what do you make of that? >> it's a good question. august seemed like people were by appointment. there were some key events in terms of economic data.

a lot of people took the days between those events off. that led to greater volatility. if you look at what some investors focus on, three of the worst weeks of the year happened in september. i would say that we are not clearly out of the woods. you do have an inflation. right now, people took a little bit of a break from what was going on. that was one of the reasons why we saw such low volatility. guy: we are starting to see some funds reducing the leverage they are prepared to put on. what should i take away from that? >> there are a number of reasons for that. to your point, we are at all-time highs. it looks like growth and earnings will reach the peak for that cycle. you have some people dialing

down at risk. another key consideration is the correlation between bonds and equities is moving closer to zero. that means bonds are not hedging your equity portfolio. from a risk management perspective, that does force you to pull down leverage. the cycle for a lot of people looks like we are past peak. the bond equity correlation is forcing risk managers to look at portfolios in a different way. guy: how are you thinking about what the fall is going to look like from a covid point of view? the expectation was we would all be back in the office and returning to normal. that looks like it's not going to happen. how does that change your thinking between now and christmas? >> it's important. a lot of the major banks in new

york have pushed off the full return to office into next year. if you look at our consumer surveys, a lot of consumers were less comfortable being back at work and returning to normal activities. from an outlook perspective saw a strong job market and had not changed their spending intentions. if it's true, we should be fine. we haven't seen consumers change their spending behavior. if we get another bout of viruses ticking higher or another variant, that could have a major impact on growth. as the weather cools down, as people are forced to enjoy indoor activities, will they reengage with that? our view is they are going to be hesitant about that.

we will be monitoring as the virus comes down. does that change views on normal activities. right now, we are not concerned. it is not impacting our growth outlook. over the next few weeks, we will get a lot of new information. if it looks like it is negatively impacting consumer spending, that would be a headwind for growth. markets seem a little bit insulated. guy: to that point, one of the key drivers has been the earnings season, which is delivered upside surprises. what do you see for the next one? we are going into the fall, people are going to be indoors more. there could be a resurgence in the virus in the north pierced

-- northeast. earnings of been such a key driver. wages are going up. the consumer might be cautious. as you look ahead, what are people pricing right now? >> it's a great question. the last two earning seasons have been a low bar for earnings but high for volatility. consensus looked too low. we would expected those to be revised higher. options were very large. right now, the setup is similar. consensus is looking at a 7% decline in earnings. that does seem like a pretty low bar. i would take that with a grain of salt. earnings don't happen for about six weeks.

it certainly seems like the bar for earnings continues to be set low despite strong s&p results. one of the reasons it's priced is because it looks low. at least right now, it looks a lot like it did for two cute. -- q. how long can this persist? how long can corporate's continue to protect margins with all of the inflation? if you look at the last quarter, the parts of the market that moved the most are consumer staples. they weren't able to push inflation. i think the crank -- dirty answer would be how it did last quarter. the more nuanced part is how long can this persist? we will get a much better read

on that in the next few weeks. guy: i will be interested to see what happens this time around. look looked like an easy set up. this is just one example of the challenges they get greater and greater. thanks very much today. i want to take you to the british parliament, boris johnson was on his feet a few moments ago, facing challenges. they are questioning the prime minister with afghanistan and the funding of social care. that is a huge challenge force johnson is dealing with. we will continue to monitor what is happening there. this is bloomberg. ♪

guy: 10:45 a.m. in new york, i am guy johnson. this is bloomberg markets. the french finance manager is optimistic on mobile minimum or potassium won't face a problem when it comes to washington. he spoke with bloomberg in italy. >> i don't think that the government, the american situation, could be hurt a

compromise and a final agreement on all the technical parameters of this new international taxation system. it has been very positive over the last days of finding an agreement at the political level. i hope she will be successful. as far as france is concerned, we will do our best to try and reach a consensus during the next g20 on all the technicals. we have a political agreement. we need to enter into the details. we need to fix the final technical parameters. i think there is a good chance that we might find a compromise. as far as the rate is concerned, the french position remains the same, 15%.

>> we are going to switch to inflation now. that is one of the biggest insecurities in the markets. the you think that is going to persist? how does this impact the recovery? >> we are not concerned by the current level of inflation in the eu. we remain vigilant because this is a key issue. for one reason, we think the reason there is an increase in some prices or semi conductors is linked to a strong economic recovery we have now. this is both in the united states and europe. in france, we have 6% in 2021.

we see this. we think it is linked to the current situation, which is quite good. we remain vigilant. we are not concerned. >> the last question, you mentioned conductors. there is a global shortage. the minister mentioned today that you need to catch up in terms of production. how important do you think that autonomy is in this field? what is being done about this? >> it's absolutely vital. we need to become more independent in the semi conductor production. we are facing a very important shortage. this leads to important

difficulties in the automotive industry. this is because of a lack of semi conductors. there is a need to invest more in semiconductors, between italy and france. we need to get rid of this dependency and be more independent and more sovereign. we have to bear in mind this is costly and the issue will build new chains in semiconductors and put this on the table. there is a need to share the burden along the member states of the eu. it is quite clear. we want to be independent as far as semi conductors are concerned. >> is this going to be done at the european level? is this going to be at the

national level? >> it should be done at the european level based on the preparation with italy, france, germany, other member states. there is a need for technical preparation with those companies. guy: the french finance minister. he was speaking from the workshop. coming up, big venues in the u.k. went from vaccination sites to requiring vaccine passports. we are going to discuss the logistics of that next. this is bloomberg. ♪

laura: it's time for the bloomberg business flash. the coo of volkswagen says the chip shortage may last for years. semi conductors are in high demand and it will take time to ramp up capacity. the shortage has been constraining auto production around the world. boeing is in talks on a follow-up order for the 737 jet. they could not agree on pricing. europe's largest low-cost carrier has ordered 210 of the smaller 80 200s. the order would been for a larger capacity version. that's the bloomberg business flash. guy: thank you very much indeed.

it is labor day in the united states. this would mark the moment we started back to normalcy. this was meant to be when kids were going back, a lot of people would start returning to offices. it doesn't feel like that. over the last few weeks, the narrative has changed. where are we in the northeast united states, in the southern states, in europe? sam joins us from bloomberg intelligence. this was meant to be the dividing line. this would be the moment we started actually getting back to normal. where do you think we are? sam: the issue is the definition of normal. i would say that life in the u.k. is close to normal. people who want to come to the office are coming back. people are working from home. in france, i'm not feeling

anything apart from having to show my pass when i go for dinner or to a bar. aside from that, that's the european side. in the u.s., if my normal you mean no masks, no masks anywhere and easy flying everywhere in the world, we have a long way to go. the definition matters. guy: we are going into the autumn. there is concern we will get new variants. how concerned should we be? sam: the new variant isn't a new variant. the variant has been known for quite a while. when you look at some of the data, there is good levels of

genomic levels. it is really picking up the case. it remains the variant of choice for the virus. i think that currently something i'm not worried about. guy: we will carry on this conversation in the next hour. thanks very much. we will take you down to the european close. we are half an hour away from that. chris is going to be joining us next. like volume. the u.s. is close. equity markets are on the front foot. this is bloomberg. ♪

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guy: 4:00 in london, 11:00 in new york. labor day holiday in the united states. european equities at an index level on the front foot. volumes are incredibly light. becoming worse as the day has progressed. normally this is when we would see pickup from the united states. that is not happening with u.s. equity markets closed. post payrolls it is interesting equities on the front foot. commodities also fascinating. let's dig into the details. here is emma chandra. emma: we will cover the equity markets. looking at some of the major european indices. the stoxx 600 gaining .7%. technology stocks are doing heavy lifting followed closely by consumer stocks and it is also why we areeeg