i saw the ceo of iag talking about 2023. there is certainly an expectation that may be long-haul is going to take longer to recover than the short-haul, and corporate is going to take longer than leisure, and perhaps it is going to be shorter for longer with the likes of zoom. so the airlines have to make that up another way. for example, iag pre-pandemic was saying they could generate 2 billion need plus -- 2 billion plus euros in free cash flow, so they certainly have restructured , and to come back to where they wear pre-bid -- pre-pandemic before that happens. guy: does premium economy help? using we will see more of that? do you think we will see more vfr traffic towards the front of the plane? what can cargo do as well? david: the airlines are certainly pushing that they are changing their inventory mix, so you see a lot of them talking about premium economy, a lot of them talking about premium as mixed between leisure and corporate. so aircraft are talking about a premium business with leisure. if this is the case, ma

in iag today up by fascinating to see how that proceeds.wn 6/10 of 1%, boosting profitability and the automotive operations by record sales of the model five series sedan, all sitting the negative currency headwinds and increased technology spending. the world's second-biggest luxury carmaker in the midst of a record rolled up with new and refreshed models to recapture the sales lead in the segment from daimler unit mercedes-benz. bmw down 6/10 of 1%. mark: jobs -- vonnie: jobs today in the u.s. with the dollar strengthening. 2.77 is the number to watch. and this is the dollar versus the sterling. yuan, i knowhinese the chinese talk about their basket of currencies and the reference rate versus the basket. it is important to look at the reference rate when it comes to the u.s. dollar, given we do not have any progress on trade talks. steven mnuchin leaving china last night with no progress being made, the promise of more talks. 2.96, slowly going higher against the 10 year yield after it went down to 2.93 and change after the jobs report. c

we need to talk about iag. let's first talk about tui. trading down today.arket starting to price in a rights issue. you discussed that you think a rights issue is more likely than an asset sale. i am curious why you think that. there are good assets that could be sold. how deep of a discount do you think it would have to be from tui to make it worthwhile if they were to do a rights issue. mark: is a choice between worse and worse, between showing assets that have depreciated or writes on a stock that has clearly come down substantially. we heard from a company nervous about the pace of recovery as you hurting your comments about the share price performance. while tui makes a point about cash breakeven, as great as that sounds, it belies the pressure of this business and the broader sector going forward, particularly heading into a challenging winter, and we cannot see further -- more importantly, it is a winter where we would like to see consolidation. , as early to go early as early can be given the fact we are six-month into this crisis, get the money, go

iag, q1 is normally weak but they posted a profit. strong consumer demand, 80% booked in the second quarter. air france has a little more weakness. there are still labor issues. still issues they have to face. fuel prices are broadly coming down. alix: here we are firing on all cylinders. regional banks getting some relief. we saw a nice solid rally up 1.5%. if you think it has been shorting with the regionals may be you are seeing short covering today or is there optimism. apple under promised and delivered at their earnings are good. you are seeing the best rally for apple this year. that's helping the overall sentiment and this can help us absorb higher yields. we are firing on all cylinders. guy: talking about firing on all cylinders, travel continues. who would've thought we would still be seeing this kind of demand given the economic headwinds that are building. maybe today's job data will show travel is solid. this is data out of america. the chart you have here is the intention to travel to a foreign country within six months.

iag as well. difficult.ith their balance sheet right now. 2023 -- easyjet could be one of those as well. we need to see those numbers coming back in the industry. people like lufthansa and air france selling off bits of their fleet easily. guy: to your point about the legacy carriers out of continental europe, i am struggling to see where the acquirers come from. why would -- ryanair i cannot see michael o'leary being interested in anything other than organic growth. easyjet will see what johann does. iag, maybe. there does seem to be the lack of acquirers at strong companies. why don't they wait for the capacity to come out of the market and take advantage of it? luke: ryanair has quietly done a bit of m&a. it has not been a particularly successful acquisition. if an opportunity comes up they will not stand by and let it happen, especially if there happens to be a boeing fleet, which is what ryanair is through and through. it has grown into the 747 and they have big orders for the 747 max. if they can get s

iag, we will get more details about that in a moment.next hour we will hear from the u.k. transport secretary laying out the narrative in terms of how the traffic light system is going to work in the u.k. how are you going to go on holiday, which countries can you go to? technologies underperforming. let's talk about the sector breakdown. adidas coming through, really delivered in terms of expectations. there is underlying concern about what is happening vis-a-vis china and that is a storage watch out for. that seems like it is for another day. today's numbers strong. we were just hearing about what is going on at siemens strong numbers. continuing picked up. interesting to compare and contrast with adidas. siemens getting strong numbers out of china. the pickup and offending the company, which has been so slimmed-down. there are ongoing commodity headwinds. iag, really cautious today. they are in a very different position. very cautious about what kind of pre-pandemic looks like going into the summer. we will see later about positive he

britishe looking at airways owner iag. it is having its best day since december., at one point it was surpassing 6.5%. it is hovering just over 5%. the company has taken off restrictions on non-e.u. ownership. it will be the best performer today on stoxx 600. 5% on theore than ftse 100. let's take a chart at the iag freezing situation. today is the best day since december. the stock climbed 47% in six months. there are issues they had to strike including a pilot and surpassing a record data breach fine. there is an uptick in revenue, ridership. writer -- this chart we will stay on right here because it has to do with the top iag holders. that requirement for non-e.u. ownership is just below 50%. today it came in at 39.5%. the biggest airline owner is cut airways. we will leave you with just this. one word for you, brexit especially as it could pertain to a risk in ownership. guy: thank you very much. what we have coming up for you. the battle of the charts. that is next. this is bloomberg. ♪ bloombergme for the business flash. bloomberg has learned a canadian bill

guy: when i looked at my screen after the pfizer news came out, iag was up 30%. lufthansa was up something similar. all of the entire travel sector was roaring higher. is that indication of the potential that these companies could have, were we to see some positive news being cemented? how much upside could there be in some of these most deep down -- most beaten-down sectors? andrew: i just think it is pretty interesting that if you look at the way the market has been trading up until this point, and i think this is still the case, even as there was supposedly a lot of optimism around the vaccine, if you listen to the news or talk to investors, i thick a lot of investors were very open to the idea that a vaccine would be successful. yet if you look at what was leading the market higher, it was still very recently many companies that benefit from abnormality, that benefit from more restrictive economic activity. is a good step towards this idea that maybe can be more normal. it might be the more cyclical parts of the market where there is more operating leverage,

iag is trading higher. i want to talk about iag. it is trading in sympathy with air france.ll say next is more but public service announcement. iag lost a court case in the u.k.. that case was designed to stop its pilots going on strike in august. i know a lot of you spend a lot of time on her planes crisscrossing the atlantic and europe. it looks like iag could be facing stripes. -- stripes -- will be facing strikes. credit suisse is trading higher. that is look at the european close. vonnie: let's have a lacrosse assets. -- major indices fluctuating the major moves are beneath the surface. on fomc day, all eyes are on the 10 year. gold futures down slightly. we also had crude oil inventories, another drop-down that was larger than expected, four times larger. we saw crude oil rise more than 1%. still $58.41. let's get the some of the movers in the stock market. apple is moderating gains. above 5% earlier. analysts are pleased with the quarter even though sales of iphones were at the lowest since 2012. the attention is turning to services and other apps. analysts are lookin

iag may be implemented of what is happening elsewhere. kailey: this market has repriced expectations to a significant degree over the last several weeks and it is having to do that even more so today after that inflation data. the preferred inflation gauge came in hot on every metric. headline core year-over-year, all living deliver -- all of the delivering the surprise. the s&p 500 down 1.6%. the nasdaq 100 down about dew points 25 percent. the two year treasury yield up 11 basis points to 4.81. this is the highest we have seen since july of 2007. all of this translating into a stronger dollar. the bloomberg dollar index higher by 0.7% on the day. guy: all of this really maybe has a big geopolitical element to it as well which is why it is worth spending time talking about what is happening in ukraine. this is what is happening in kyiv. a press conference is being held by president zelensky. he is briefing the media right now. he is looking to involve china and india to back his peace plan. we had a proposal from china earlier on. let's

iag out with numbers. european equity markets going sideways to be honest. priced in some of this economic data but that claims that ahead of the big number tomorrow on inflation. i think telling us a story in this economy is still coming along. kailey: the data still looking hot and the labor market still looking strong. investors trying to figure out how to price it. balance of power is coming up. the comes in from ohio will be joining on bloomberg television and radio. you're heading off to the radio studio. guy: talking more about keir starmer's product -- promises. we will be having that conversation on dab digital radio. this is bloomberg. ♪ get help reaching your goals with j.p. morgan wealth plan, a new tool in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside and the other goals along the way wealth plan can help get you there. j.p. morgan wealth management. >> this is "balance of power with." david westin.

iag, owner of iberia airways, is trading down sharply today.expecting to see a further lockdown. the eu talking about negative covid tests being revived. the u.k. is expected to tighten its rules of entry as well. all that being priced into iag and other stocks. they are down 7.32%. alix: i want to bring in mark manduca. you have france that could go into a lockdown and whether the u.k. will lift lockdown. how much of this is priced into the travel guide? mark: you summed it up beautifully. borders are beginning to close and we had israel and scandinavia offering their own versions of events. needless to say u.k., france, neighbors do want to be left behind. it appears that this notion of bed and breakfasting rivals, at their own cost by the way, is the australian style mechanism. the first question is in terms of what is priced in, is this event possible? the clear functionality issues around this. if you take 8000, 7 thousand arrivals into the u.k., we are we going to find beds for these people? if you have ever taken one of these tests, it i

iag and the travel sector.are starting to cig's cash rate come into the market -- iag's cash rate come into the market. this is the company that owns iberia, it owns british airways. tough talk from the travel sector. we are certainly seeing more evidence that we are seeing a fate in terms of demand coming through for air travel in europe. air travel from a different is aective, sasso aviation french company that makes corporate jets. it also makes fighter jets. there is a geopolitical angle on this story. grease announcing it will be buying 18 of these advanced -- buying announcing it is 18 of these advanced fighter jets. tensions are rising in turkey and having problems internally. frome is buying more france and not the united states. we are seeing -- so being one of the main beneficiaries. kailey: let's look elsewhere in geopolitics. the eu is stepping up demand on china to open its market further. the european council president said differences between the eu and china still exist. >> differences exist and

iag's ceo also appearing today before parliament.e told mp's that the news was a surprise that the eu would now have to look at again for any plans for ramping up. period coming into going tois definitely make it worse. there's nothing positive in anything i hear from the prime minister. we had been planning to resume on a pretty significant basis our plans for july. i think we will have to review that. the ceo of iag, which owns british airways, among other carriers. let's get a sense of what this means now. we are joined by robert briggs, policy and public affairs director at airlines u.k., the industry body for u.k. airlines. it does seem as if the government's announcement over the last 24 hours is going to have a significant impact on any reopening of u.k. airlines. does this effectively end the prospect of a summer recovery for those carriers? robert: hi. it is absolutely a blow. i think as we are starting to see other parts of the economy open up, we are seeing restrictions affect the u.k. airlines. many think we are now more

the iag ceo will leave next month.ns iberia and aer lingus amongst other airline brands. staying in the aviation sector, boeing has another problem with the 737 max. ragsctors have discovered and tools left in the fuel tanks of newly built planes. the boeing is now looking at more than 400 of the jets. they have since been stored since the max was grounded almost a year ago. will give northrop grumman up to $13 billion and richard spending through 2025. this is part of a trillion dollar effort to modernize the landsea, air, and nuclear weapons triad. and that is your bloomberg business flash. vonnie: coming up, it is our global battle of the charts. this is bloomberg. ♪ everyone uses their phone differently. that's why xfinity mobile lets you design your own data. you can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. all with millions of secure wifi hotspots and the best lte everywhere else. it's a different kind of wireless network, designed to save you money. s

john: we have seen some of the low-cost carriers like ryanair and iag.e large amounts of liquidity but they have had to retain that, they've had to do equity raises, bond issues, very little in terms of government support in the case of u.k. carriers. we are seeing government projections for lufthansa and air france klm and other groups. a debt load is rising. one airline ceo said we are at the saturation point or close to the airlines. if the airline survived they will be shackled for years with these massive debt loads on their balance sheets. it is a major challenge and if more liquidity is not coming in they will have to get back to the markets or shareholders for additional liquidity just to keep going. alix: am i going to get to france? when do i get to go? john: it sounds like it has been that way. the french press just had an interview. although they are requiring proof of a test, there is some hope you'll be able to get to paris in the future. alix: i had booked a hotel room for october. this is what i did. thanks a lot. john strickland. let's s

i'm thinking of carriers like iag.y work very hard after the financial crisis to put up balance sheet in place that could survive anything that is now being tested. strength actually work against you in that scenario? mark: it is not just a little more money. you were talking about 2.75 billion. this is significant dilution. i love your point. the reality is, a lot of governments and their respective airlines are going to be looking at the names that have the money , that have the ability to pay for. that word we were talking about, esg, carbon credits. if governments want to raise capital, they are not going to look to their own because they own those entities. the're going to look to last remaining areas of profitability. these are the people who are going to pay for the new escrow accounting roles these the people that are going to have to pay for the carbon credits that are associated with etf schemes. ryanair is going to be a target in the medium-term. when it comes to government on airlines. i think that is what

iag trading down 1.6%. the airline stocks had a solid week.z, theoday is alex man who has been sharing british airways, part of iag, will be stepping down. remember william walsh, who has put them in that job, has recently stepped down. iag trading at 101. allegro, this is an incredible story. finishing almost exactly on 70. we are trading up 62.79%. this is the commerce platform out of poland and the stock is searching much more than a lot of people anticipated. a very positive first day of trading from a price point of view. can definitely say positive on that one. for more on the debut of allegro is it ceo, francois nuyts joining us from warsaw. congratulations on this strong trading debut. you are clearly reaping the benefits of this e-commerce world, spurred in large part by the pandemic. how long can your new investors expect this to continue? francois: thank you. we are focused on what pleases our customers, and the kind of company that allegro is normally exists in other continents. we were born 20 years ago. you normally see that in t

iag moving lower. positive comments from a lot of airline executives. iag more pessimistic.sh owner losing ground. only 45% is what they see capacity compared to 20%. iliad, this is a buyout, one of their billionaire owners that owns 71% of the stop offering to buy them out at a 60% premium. though shares up about what the premium is, 61%. l'oreal, such a muted movement despite the fact they had earnings out today. organic sales beat expectations. they gain share in all geography but rbc saying that is not enough to boost shares. it feels wrong to say, but this is not the impressive quarter we have come to expect from l'oreal. alix: interesting, particularly if things reopen and we buy clothes rather than face cream again, what does that mean? let's get into that. bloomberg's carolyn to non-spoke to l'oreal ceo following the earnings. >> in countries where the lockdown and the easing, whether it is the usa, i'm thinking of the euro or china last year, the appetite bounces back immediately. makeup is back. it is not back to 2019 levels. you could see the say -- you could say

iag is down 3.5%. alix: we thought next year was going to be about how good it could be.per joining us now. he leads the covers over in europe that covers the transportation sector. how bad can it get for the index? >> it has certainly been a shock today. a real shock to the system. the reality is that airlines are always in the firing lines. they always tend to be towards -- sensitive towards any sort of reversal. the possibility of germany to follow with lockdown, has really set them back at a point when most airlines were really looking forward to positive christmas periods, and then to a really healthy rebound next year. for the past few weeks, all the talk is been about optimism, with a strong rebound in traffic did that. --. >> airlines have been pretty close to breakeven. this is really sort of venting that confidence. -- denting that confidence. guy: winter is less important. we don't know will happen with ski season, it is pivotal to that, but airlines make the money in the summer. to what extent can they manage a short-term lot? there were a lot of idle during t

iag slashing fourth quarter capacity to conserve cash as fresh travel restrictions continue to hit demand. the market is softer when it comes to equities, down by 0.3%. tech is the lead losing sector in europe. most sectors are down, but travel and leisure is the most positive sector. down at the bottom of that very tight range we have been occupying, the s&p down as well, down 0.1%. a slew of earnings coming at us from both sides of the atlantic. euro-dollar softening up, so we are seeing some dollar strength. yesterday was quite a big session, and we did see a lot of dollar weakness. 7000. copper at german 10 year yield, we are seeing yields picking up, as you can see, a little bit -- sorry, prices going up, yields going down. what we continue to see is a situation where we are seeing the spread across the atlantic widening out. what is interesting is we are seeing general euro strength on the back of that. you wonder whether or not at some point, that starts to play into that story. alix: let's wrap this all together on a macro sense. on the one hand, you have stimulus hopes in the u.s

i am interested we are seeing iag up today.oing to be the year we finally see this migration from short-haul recovery to the long-haul recovery? andrew: the transatlantic finally reopened in november. that was a superb christmas of trading -- there seems to be a lot of optimism in the industry there will be a solid summer trade on the north atlantic. we will have to wait and see if we get a clear path and a continued recovery from the virus and normalizing of travel rules. than the transatlantic should be strong. we end up continuing to wait for asia, the reopening of europe and asia. that is not great. in the context of iag that is not relevant. alix: guy and i were talking before that it seems like when the sun shines, summer you will book, winter do not bother booking because there'll be new waves, potential travel restrictions. if we go in waves like this, how to airlines manage that? andrew: if we are going to continue having persistent uncertainty, airlines will struggle. how do you plan your fleet sizes and crew? if you

talking about iag, about qatar, about going. them early or on -- i talked to them earlier on. we'll take a listen to what they had to say. this is bloomberg. ♪ ritika: this is the european close. coming up, nypd former commissioner ray kelly at 7:30 in new york, 12:30 in london. this is bloomberg. guy: the global recovery for aviation appears to be patchy and regional, frustrated many of the world's long-haul carriers and the companies that supply them. i'm talking about boeing and airbus. earlier i spoke to the ceos of qatar airways, boeing, and iag. i kicked off by asking how frustrated they are about how slow this process is unfolding? >> i'm extremely frustrated because what is happening every day is governments are changing protocols of who they will let enter and who they will put in quarantine in who they will restrict from entering their countries. different requirements for vaccinations for the covid test, so this is confusing the airline and the passengers, so i hope the government realizes they are damaging not only t

iag down as well. hello but of good news and a little bit of bad news.s down on a number of reasons but one of them is heathrow will be putting up charges. not as much as they would have wanted to but still charges are going to go up. another cost on an industry that is still struggling to recover. november 8 will be a huge day for iag and other airlines because of the reopening of the north atlantic. so i can come for you. alix: nostalgic. really digging into the 80's. let's go back to the conference underway in los angeles, howard marks is long with a panel with bloomberg's romaine bostick. howard: a serious global depression right now. romaine: there are a lot of people who agree what they did was right. there a lot who disagree with keeping it in place. have we reckon with the ramifications of keeping the stimulus out too long? howard: most people, if they were knowledgeable and devote were held would prefer low interest rates to high. the business does better, people can buy stuff cheaper. rates on mortgages go down. politicians can spend more money

iag has managed to avoid taking government funding.e is still relying on its own resources and already was leading the pact on the green agenda. we look at lufthansa which took quite a chunk of government funding, not only from germany but from other countries. lufthansa has just done a big rights issue. air france klm a bit different. a bit murky. how much government will stay in that airline group, having funded the french government and the environmental stipulation into that funding. it is a mixed picture in terms of airline freedoms. the local carriers are out there having just had a successful rights issue at ryanair. very cash flush relatively speaking given the depth of the crisis. we are seeing new aircraft which are more fuel-efficient such as the 737 max in the case of ryanair or a320 in the case of other airlines. we need to see a much more cooperative and collaborative approach from governments. this is the message we will hear from willie walsh. we need a lot of investment to speed up the process into the future. the sect

iag is suffering as a result of that. then you have adidas.have had problems in vietnam in terms of the supply chain. china is a really big market for them. you have a move to buying local brands and also to close stores avenue -- as a result of what is happening with covid. >> i was warned not to call it adidas although every fiber in my being once to do that. we are joined now by and analysts in berlin. how much of this is a china covid story? >> has a lot to do with china. this was supposed to be a big year for adidas. in the western hemisphere, we have big sporting events like the world cup in qatar. then everything went wrong for them in the key market in china. that accounts for 20% of sales. that fed through to the numbers that they revealed today. sales are down, profit is down and the outlook is needed. a lot of this has to do with the fact that the business has ground to a halt at least temporarily. there is a slide from the ceo that showed customer frequency per city and he didn't sugarcoat it by saying shanghai down 100%. nobody is

stocks like iag, these kinds of companies continue to feel the pressure. that sector has really felt it. the european close coming up next. we will have more analysis in just a moment. ♪ guy: we are going to take you to the white house. the president and the vice president speaking. let's take a listen. vp pence: our airlines will took a key role in preventing the spread of this disease. at your direction, we met with leaders of the nursing home industry to talk about the measures come of increased measures to present -- to prevent the spread of infectious disease. nursing homes will be announcing a new priority of inspections for infectious diseases. we are detailing that. we explained it to the industry today. on the issue of testing, mr. president, you have made that a priority. we will have over a million tests in the field today. i spoke to governors grateful for the fact that the changes you made this weekend through the fda now make it possible for state health clinics, as well as universities around the country, to be able to conduct coronavirus te

iag has had a good week. wizz has had a good week.ot of european airlines making more positive news. the travel and leisure sector has been in outperformer. a return to travel, returned to people moving around the world. potentially that should be good for the luxury sector. that is not what the numbers are showing this week. kriti: let's stick with that topic. the growth in the luxury sector was late to the decline in the travel sector. he spoke to bloomberg tv earlier today. >> luxury goods overall has very strong demand before the pandemic. with the pandemic it grew because there was a big trend before it an experiential luxury , spending for travel, restaurants, hotels, and this was heavily impacted and is still very low. that is back -- not the level of 2019 and certainly not to people have been. the economy is doing well. the purchasing power is still high, especially in the two strongest markets for luxury goods, which are the united states and china. people have a strong appeal for spending on the luxury goods. if we look at w

i know they have more roots than something like iag, british airways.e have been traveling over the summer months to them from the european capitals. alix: none of those things for me but maybe for you. let's get more on bloomberg travel guidelines. bloomberg transit reporter sid phillips joins us. we could see europe rejigger whether u.s. individuals can go to europe, similar for the u.k.. what are you expecting? sid: we are hearing the european union is considering whether or not to reimpose travel restrictions on american travelers from america. as things stand at the moment, people from the u.s. can enter europe if they are fully vaccinated. those rules may change going forward. francine: if you look at airlines, are european airlines on a tear? when will they be revoked if they get revoked? what are executives telling you? sid: at the moment it is complicated. short-haul travel has been the biggest beneficiary from the green passes. ryanair is only 7% low 2019 levels in terms of capacity this week. that is a market difference from iag and british a

iag trading strongly. the vaccine will have a material impact on those businesses and our ability to travel. the euro up above 1.14. we do have the ecb coming up tomorrow. let's talk about what we have coming up for the rest of the hour. the chairman and ceo of train technologies -- trane technologies, they do hvac. we will talk about how you recondition all of the air-conditioning units that we have to allow us to basically eat and drink inside. a really important conversation as we think what will happen as we approach the autumn and fall. what will happen to the service side of the economy. the banks are in big focus. 93%man sachs reporting a surge in revenue on the stocks and bond trading in the second quarter. highlights is our bloomberg wall street reporter. >> they have a lot of questions about the m&a environment. goldman the lead m&a advisor. the backlogn saying is higher, but he expects activity to continue in the next two to four quarters. , but we will see them come back. there are a lot of unc

iag, let's talk about what has been happening with the allied sector.se are the days when u.k. -- the u.k. has imposed its quarantine rules. the vaccination program has been moving on, we have seen the airlines traveling strongly today. iag, it is the rest of the sector, broadly as well, texas is the story all the way across europe. all of the names moving sharply. 6.62% to the upside. the director of research and managing director covers airlines and he joins us now. mark, i would have thought with the backdrop of government sounding really cautious at the moment, trying to dissuade people from traveling that airlines would continue to have a tough time. they are not. why? guy: it is a whisk on day. let's be specific. they have been talking about four things in our conversations. first, a potential for max subsidization this summer. albeit, you and i know that physical activity of doing one of these sessions is an uncomfortable exercise. second, an acceleration in vaccine rollouts, not just in the u.k. but also in continental europe. third, a lot of ta

iag, the travel sector has been under pressure, iag down 2.3%. then we get into the luxury sector.is the head scratcher for me. trying to get a hold of a hermes handbag is as difficult as ever. if you want to get one you have to get on a waitlist. secondhand sounds pejorative. there is a strong market. residuals remain. as we were discussing a few days ago, this is an asset class. hermes having supply chain issues, supply-side issues, but demand continues to rock. the stock down 4.6%. kailey: even if i could afford a bag, i could probably not get one. you cannot keep up with the burton demand because you are so constrained on the supply side. that works against them in this quarter. you have to start thinking about -- do they have to start thinking about their production model differently? they will can -- swetha: they will continue with steady growth rather than the media work growth the rest of the sector has seen. hermes strategy will be to have the steady growth. they have been hit more than other peers, they said the average bag can take more than 50 hours to make which is lab

that is good for iag. virgin has a 19% market share of u.s./u.k. flights.nk, losses tied to wirecard means it will not hold its profit forecast. alix: really got hit. the stocks closing higher on the news. no accents today? scarlet: no accents. alix: disappointment. [laughter] let's stay on commerzbank because earlier we spoke to the ceo on how the coronavirus and the wirecard scandal affected earnings. profit.e have shown a year we said in the q1 announcement it would become much more aspirational to reach positive income given the proto-impact on negative -- given the corona impact on revenues. now we have the single case, which was unexpected, and even more important. we want to look into q3 or q4 for the restructuring charges to make progress on our confidential program. us to a negative net income for the year. in terms of the wirecard story, before you are ceo at ,ommerzbank, long before journalists were writing stories about the problems at this bank and the amount of smoke coming from the company meant everybody should have known there was fire. the

we've been keeping a careful eye on iag and all of the airline sectors over the last few days.t is down 7.26%. when you are launching a massive rights issue you will see a mechanic issue. not yet. trading strongly today, driving the tech sector. the 5g story -- it seemed for a while erickson had the power behind it, but nokia coming back nicely. lower despitek the fact it came through even the best expectations. it is the lack of guidance that has concerned the market. the stock trades down 8.5%. i also mentioned what is happening with the banking sector. a blowout performance in fixed income trade that beat everybody, even on wall street. this allows the french bank to move past embarrassing losses. the cfo was asked if the bank would be able to maintain guidance in the event of a surging coronavirus case in france? >> we anticipate there will not -- if youd nationwide look at the results of this quarter and the first six months, it is in line for us to confirm -- >> your fixed income activity was boosted by the exceptional relativity in the market. up 150 poor percent -- up 1

iag doing a little bit better today. reportedly are pushing back against the government in the u.k. it can fire all of its pilots as a result. up 1.1% today as we are likely to see an acceleration in some of the changes at ridge petroleum. -- at british petroleum. alix: market still seem to ignore the economic data. and the economic outlook. world bank is out with part two of its economic prospects report and is forecasting a 5.2% contraction in gdp this year, the deepest recession in eight decades and risks tipping millions of people into poverty. kose,g us is ayhan director of a group at the world bank. his team wrote the report. pick three of your highlights you think it is important for audience to know when it comes to moving out of the covid pandemic. ayhan: the first highlight, we are expecting a historical contraction in global gdp. not just the worst episode since the second world war. worst episodeth since 1870. second, wherever you look, you see the contractions in economies. economiesg markets will contract 2.6% this year. this will be the first contraction since 1960. i

iag, north of a pound, a few days ago, huge line in the sand, management.up by nearly 8% today. i think reiner is having a solid story on that as well. we see the airlines getting a lift from another upgrade. then there's credit suisse. look at that. it is a rising market we are seeing today but after the turbines of the last few days, a kind of breath of air now. credit suisse up by nearly 9%, rallying hard, up 429 -- 4.29. we will see the statement on what exactly the slimmed-down bank will look like but for now, judging by that story, maybe the crisis is starting to ever little bit. we will see what the day brings. >> luscious keep that in mind too, more on the struggles. the senior and listen global investment bank at bloomberg intelligent. allison, do we chair the fact that the stock is over four dollars and 12% in today's after having this cap monday or are the problems real? allison: i think we can find relief. there are real problems, but certainly i would say a lot of the action in the stock yesterday was related to the market and uncertainty. the

iag down 7.26%. i think the numbers today were quite solid.op -- thyssen krupp has had a tough time. as the middle story gathers pace -- as the metals story gathers pace its numbers are starting to improve. i think the market was looking for a bit more. maybe they still being conservative come as a result of which may be the market is still ahead of where the company is. alix: let's go to commodities for a second because despite the outperformance of some of the metal and mining stocks it has not come close to what we see in the underlying metal. this chart tells the story. the blue line is lne copper prices. the white line our basic resources versus the overall stoxx 600. you can see they had a rally. they are outperforming. nowhere near -- typically that gap does not happen. you normally do not see one of this magnitude. let's break that down with colin hamilton, bmo capital markets managing director for commodities research. is that a buying opportunity or have these stocks lost their beta to the commodity price? colin: i think there is sti

lufthansa, easyjet, iag all under pressure. 7%.france down by lufthansa down by 4.5%.the biggest travel company down very hard. a big meeting in russell's tomorrow. we will see the ceo's -- in brussels tomorrow. the ceos of these companies will be talking to them. we are looking like we make it some coordinated action. that is the european close. vonnie: in the u.s., we had an up and down overnight session and a bounce at the beginning this morning, but a small bounce. since the policymakers are going to try to work together and talk to each other, we have seen that increase. major indices up more than 2% period dog got up to 2.5% higher. the 10 year yield back to 2.09. move. a big the spread is wide because of the move in the yield curve which was quite substantial. 4.3% and still below $47 a barrel. that tells you how big the selloff was in those assets. here are individual movers. andter was higher all day we will be talking about twitter and the ramifications to where the company and maybe for the presidential election. cosco -- costco and some of the .ther food do

looking at pictures of the 747 's, which iag and others have just retired. dax is down a full 1%. the cac down as well. travel and leisure stocks coming off today. the banks are under pressure as well. inre is certainly a collapse german investor sentiment at the moment, and the j&j story in terms of the pause in vaccine develop and has until things. the details of the close coming up next. this is bloomberg. ♪ are you frustrated with your weight and health? it's time for aerotrainer, a more effective total body fitness solution. (announcer) aerotrainer's ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time, all while maintaining safe, correct form and allows for over 20 exercises. do the aerotrainer super crunch. the pre-stretch works your abs even harder, engaging the entire core. then it's the back extension, super rock, and lower back traction stretch to take the pressure off your spine and stretch muscles. planks are the ultimate total body exercise. build your upper body with pushups. work y

with the government be ok with iag owning those slots? i don't understand.hat is a huge amount of capacity being taken out of the north atlantic. delta owns a 49% stake. it can't own anymore. i'm kind of curious, what fills that vacuum in the u.k.? mark: when you talk about heathrow airport, to be honest, iag already holds 40% of capacity, so needless to say, whenever any slots come up, it is always going to be an enticing proposition. you've seen it recently in gatwick as well, where we seen bankruptcies. ultimately, those slots have been bid for very readily. i see further consolidation potentially, as you talk about in the u.k. market, but i think there's a bigger point. there's going to be broader consolidation in europe over the next two to three years, which ethic is going to be very good not just for the north atlantic, but specifically for europe to europe travel. in the meantime, we are going to have to slightly go through the variant deaths before we come through the other side. i think you will see a price war after we move out of all the talk of

then there is iag. iag is down 7.52%.es seem as if the long haul carriers may be more at risk in terms of the selloff into the global narrative we are talking about less the inter-european narrative. nevertheless the former boss of that business joining me earlier on in a conversation. willie walter. he is now the iata general director and we talked about what the industry will look like once we finally do emerge from the pandemic. willie: it looks more cautious, but equally competitive. the thing that has pleased me is the focus on environmental issues, maybe even more so. people are coming through the crisis and the pandemic. given the state of airline balance sheets, i do not believe we will see any significant m&a activity because i do not think airlines will be prepared to take the risk to spend the capital they have available. it is certainly possible certain airlines may not be able to survive if this continues. guy: the iata director general joining me earlier. i also have the opportunity to talk to johann lungren

iag. this as a vehicle to tell a story about heathrow, the big dominant user of terminal five at heathrow is owned by iag. there is a new coo coming to heathrow. will that represents a reset between the relationship of the -- represent a reset between the relationship of the airport in the airline? we have moved on quickly. i was going to show other stocks but i am being told i have to move on. next week, monday, we get manufacturing pmi data. tuesday, the reserve bank of australia decision which caught us by surprise. wednesday, opec. it is a sensational story at the moment. germany factory orders will come through by the end of the week. then, the aix-en-provence economic form taking place. we have great guests lined up from there. sonali, next week will be an interesting one. we have also had inflation data. plus we need to think about what the second half of the year is going to look like. sonali: that is right. it is the start of the second half after a big first half. it brings us to

iag up nearly 5%. then there is glencore.ay, completing the lineup with the addition of a new chairman. we are seeing a new generation coming through. the market likes that. data coming out of china helping out the mining sector. a broad sector trading sharply to the upside. let's talk about what else is happening. an interesting weekend in france. an event some people call the french davos. economic conference taking place over the weekend in the southeast of france for the first time in two years. french and european business leaders able to gather in person to discuss the recovery and the political impact of what is happening with the pandemic. bloomberg's caroline connan speaking with the french industry minister, the german minister, as well as the euro minister about the risks out there. >> we have india still has massive problems. southeast asia, excluding china is not vaccinated. only a few days ago. the crisis is not behind us. it is just the drivers of recovery are there. we have the unprecedented amount of monetary

that is iag. imi, industrial company out of the u.k., makes ventilators. it has upgraded.t applauding that. up 11.2%. nestle trading down today. this continues to be schneiders big push into the health side of the business and is looking about bountiful -- looking at an ipo. nestle is in there. the stock i want to finish on, we call aberdeen standard or standard life aberdeen good i've always been slightly confused because i always got it wrong. they are trying to simplify it. it is currently sla, but we are basically taking out every vowel in the word aberdeen permit i think we have some put it -- and i think we have some footage they put out. it is pronounced aberdeen but does not look anything like aberdeen. i wonder what the people of aberdeen think about this. kailey: disenvowelment. apparently they think millenials do not think we need vowels and anything. as a millennial i do not think i agree to that. aberdeen is trying to appeal to younger investors. i'm not sure it is having the desired effect. they've been getting ripped apart on twitter. guy: i am pretty stunne

next week we get ryan and iag. what the picture is likely to be when it comes to the eu sector when it reports numbers as opposed to the u.s. benedikt: the picture was over all good. american airlines was a bit of a fly in the ointment. the stock fell because people were not happy about the outlook. in europe, things are strong. ryanair on monday. investors expect it to be a record number in terms of profit. looking out for the fourth quarter, traditionally a weaker quarter, there will be some concern about whether inflation, which is still persistently high, might start affecting people's buying after they spent money during the summer. we also get boeing toward the end of the day. the picture will be on production and how they managed to get over -- and half they managed to get over the stacks they had -- the snags they had. you and i were at the air show in paris. a lot of ticket orders. investors will be looking for signs. can boeing deliver the jets they promised? kailey: going to be a busy week for you. rathe

you've talked about iag. the u.k. feels like it is on a slightly different page.ariant is causing significant concern. we have pushed reopening out. how big of a wrinkle could this be? daniel: i think it is meaningful and i think you're seeing it in the ryanair share space. what you also see his european countries like italy putting quarantine back on for travelers on their side of the deal. the delta variant is probably the most meaningful downside risk to airlines right now. it is still early days. there are different studies. it is not clear how well the vaccines protect against the delta variant. next couple of weeks will be decisive. alix: when it comes to the different countries and internal europe, who is a loser and who is a winner? daniel: definitely the u.k. is on the back end. all of the airlines are searching for ways not to flight of the u.k. but to connect other countries who are more lenient. the winners will be the sun and sand destination, spain, italy, greece opening up their borders from the rest of europe. those will be the economies that do be

iag up, also confusing.sh airways saying they will have to furlough some workers because the u.k. is not really allowing people to travel outside the country. it does feel more of an optimistic trade. i wonder what we will see on monday if we come in. boris johnson is much more negative about any further reopening. guy: i think a lot of people have price that in. the expectation, judging by what the science is saying in the u.k. is that reopening will be pushed back. i do not think that will have a positive impact on the travel stocks. they have been very volatile this week. run at the top or run at the bottom of the leaderboard based on the way we are seeing trade developing. you are basically trading the tape at the moment in terms of what the politicians are saying. the co's are not happy about this. we spoke with easyjet yesterday, i spoke to iag earlier in the week. michael o'leary, he is the most outspoken. you and i talked to him earlier on and tried to get his take on what will happen to this industr

the biggest loss in the airline sector has not been iag. it has been air france.ok at that. a near 10% drop for air france. an update on what is been happening over the summer. the market did not like that. i mentioned the banks, i just up by 3%. the bond market story working out with european banks. vonnie: in the u.s., equity markets seeing fractional gains. the s&p 500 up onto percent. oil and gas drillers are pushing that higher. $58.05. we got news of the new industry -- the new energy minister from saudi arabia. he has said policy will continue and so the oil market may see more cuts. the 10-year gilts at 1.62% and that -- the 10 year yield at 1.62%. let's take a quick look at some of the stocks moving. -- up 6.5% on the oil and gas news. oil and gas drillers are all high, as well as the suppliers for materials. brands, all sorts of problems through victoria's secret, and the jeffrey epstein tsonga which will not go away. investors -- the jeffrey epstein tsonga, -- the jeffrey epstein saga, which will not go away. stocks down in anticipation of news tomorrow

iag down hard today, one of the worst performers in terms of airlines.tock off the earlier lows. stops benefiting today. 5%, a flip inrly terms of what we have seen as the travel stocks coming back, the stay-at-home stocks doing less well. we are starting to see the flip back in the united states, which is interesting. as we mentioned, the oil sto cks have been under pressure as we see brent and wti both taking a big hit. kailey: the energy sector off in the u.s. session. let's bring in ian hartnett great year in the u.s., we are seeing a bounced off the u.s. lows. there seems to be a bit of dip buying coming in. you see today is an opportunity to buy the dip or necessary steam coming off of what many said was an overheated equity rally? ian: we see this as being a very extended market. when you think about the positioning we have had, this was right for a bit of a correction and it is dangerous to buy the dip just on the presumption we will be policymakers. if anything we think policymakers have set themselves up for something of an area of trouble in t

will this undermine the tactical story around iag?that become a more sustainable story or will the companies have to come back to the market? that is what the market is grappling with. you see a huge shift one way. are we going to continue to see that being sustained. are you going to become more nuanced? it is being driven by the vaccine news that has been driving so much. alix: we want to welcome stephane bancel. thank you for joining us again. we appreciate us -- we appreciate it. found thery analysis vaccine was 91.4% effective. you are requesting emergency authorization. you say you can get the vaccine out in 24 hours. what does that 24 hours look like? stephane: thank you for having me. today is an important day. two weeks ago we had phase 3. today we're are announcing the final analysis. the piece that is most important -- serious cases. all were on placebo. whatyou think about happened in terms of severe cases leading to hospitalization and i see you and death, this is this is a and death, moment in the fight against the pande