movers in the luxury space just before the break at lvmh and montclair. those shares trading lower the market was some what disappointed a big week for earnings in europe and state side. we'll get big tech earnings with a number of those reporting on apple, amazon and facebook the federal reserve kicking off today, a two-day policy meeting. a little bit of optimism coming through european markets around the senate republicans proposing this $1 trillion coronavirus aid package. we were discussing banks just before the break we'll get to annette who joins us from frankfurt where i'm pleased to say she is joining us with the chair of the ecb. >> we are talking about the key findings of the analysis but also about the perspective of the european banking i'm glad to be joined by the chair of the supervisory board of the ecb let us look at vulnerability analysis your key findings, how would you summarize them >> i would summarize them by saying the european banking sector is in a very strong position to withstand an unpr s unprecedented shock. it is something w

matt: it looks like we can expect lvmh to underperform.dly upholding the luxury industry. what do you think about luxury goods? are they going to see a bounceback? see even inou don't these kinds of recessions really rich people holding back, do you? steve: there is obviously an element of people who won't change their buying patterns. obviously, going to retail stores anywhere in the world is easier than in other countries. one thing we should acknowledge is for a lot of these names, travel is really important so the industry is a significant driver of luxury and until we see travel between countries. until you start seeing cross-border, i think we are not going to see the growth we have been used to going forward and to be honest, at this stage, that doesn't look as if it will happen this year. it is more likely to be a 2021 story. steve, thank you for joining us and for sticking with us this morning. standard chartered, standard chartered bank chief investment thisegist talking to us tuesday. the ecb asks banks to freeze dividends until

i also wanted to show you lvmh.t is down quite significantly investors --inted disappointing investors with earnings. the picture is that stocks and u.s. futures are pushing higher today. cooling somewhat but it did touch 2000 late yesterday. dropped after the french luxury conglomerate reports earnings that missed analyst expectations because of the lockdown. let's get straight to the bloomberg first word news. here is leigh-ann gerrans. >> good morning. senate republicans have unveiled a $1 trillion plan to bolster the economy. the package, announced by mitch mcconnell, includes an extension to unemployment benefits but at lower levels. it includes cash handouts of protection from virus lawsuits. >> we have one foot in the pandemic and one foot in the recovery. the american people need more help. they need it to be comprehensive and carefully tailored to this crossroads. that is what this senate majority has assembled. >> meanwhile, nancy pelosi delivered a harsh assessment of the plan, calling it pathetic. the eu

you look at lvmh, organic only a 29%n 38%, but decline in operating costs.verse those numbers? is there room to counter the companies that does not do long-term damage to the brand? stacey: this is part of the problem. it is a high expense business. it is very difficult. the variable costs to cut our limited. also, you do not want to cut too deep because when things do rebound, you do not want to be the guy that is not innovated or has not serviced your customer. how are they serving the customer? when you go into a ledge we store right now, you are almost assigned a salesperson. they walk the store with you. that costs dollars. you need enough salespeople to be able to accommodate people coming to your stores. it is limited what you can cut. alix: in terms of e-commerce, how much are the luxury guys able to sell online? stacey: what has been surprising is luxury in general has been pretty behind investing and getting up to speed selling direct online. what they have been really successful doing is going on malls and joining the luxury pavilion, which has be

it is lvmh is dropping after the french luxury conglomerate earnings missed analysts expectations. that is a good way to look at the details, struggling even if they have an online presence. joining us now is david riley, asset management chief investment strategist. when you look at the market and what they are being driven by, how much of the focus is on the stimulus in the u.s., the size and the scope, and who it will go to? david: i think in the near term the stimulus package, the market is expected to come out of washington is absolutely vital. i do think that one of the key lessons that we learn in the aftermath of the global financial crisis and the euro zone sovereign debt crisis is that policymakers introduce austerity too soon. they introduce the stimulus too soon, and there was much reliance on central banks. i hope certainly that policymakers come around and bit -- and realize that fiscal has to do more of the heavy lifting in terms of reporting the recovery. some of the data is starting to weaken in the u.s. because of the upsurge in cases, even though that may now sta

that is a bigger drop then rival lvmh but less than expected. hoaxes the worse. ebay has raised its forecast for the year but the new outlook disappointed investors who had hoped the digital marketplace would take a greater advantage of the surge in online spending during the pandemic and there are concerns when lockdowns are lifted, the company could return to sluggish growth. credit suisse set to announce an overhaul of its business. the swiss lender plans to merge its investment bank and capital markets unit. the changes are an overhaul by the chief and may be announced when the bank post second-quarter results tomorrow. that is your bloomberg business flash. turn to: let's diversity and creditworthiness. investors require on moody's -- rely on moody's ratings and the esg are becoming part of those cut relations. bankss has called floyd's race action plan which boosts diversity and increase the number of black appointees to senior positions a credit positive step. stepsed jes staley the their firm is taking on diversity? >> we have to take a

lvmh customers are curbing purchases of high-end fashion faster than the company can cut costs.s hit the demand for luxury goods. joining us now is deborah aiken, a senior analyst from bloomberg intelligence. did we see all areas hit in terms of the followthrough into the profit? h: yes, if we look across, wasrange of revenue decline 23 to 39%. however, if we look at what in leather goods, they held up well in terms of the profitability contribution. the biggest issue was on selective retail, which houses the hospitality side, the , retail, that came through with extra loss. that had a big impact on the net line, 38% decline on the adjusted operating profit versus 20% decline on sales. nejra: what can we read across to other luxury names? deborah: as we were going into q2, the consensus was calling for 47% declines. 38%.has come out at we are looking at second-half recovery. the market is looking at parity. it will be flat for the second half. the thing is that companies are actually underlying cutting costs, they should, stronger. -- sorry, half one sales, there are fixed costs

monday you get ryanair, you get lvmh, will be a luxury story.isa, pfizer, mcdonald's in the u.s.. ,ater in the week you get apple alphabet, amazon all in one day. i am looking at exxon and chevron on friday. it will probably be ugly. how ugly? have the and then you banks, you have credit suisse, you have deutsche bank. if you look at what we have had so far, the second quarter earnings season is not as bad as some people feared, but it is also not great. if you look at europe. i was kinda break it up in terms of earnings-per-share. with 25% of companies reporting overall, european earnings-per-share is 50 perceived set -- is 53% year on year. it is not as bad as the lower consensus estimate. we will have to see if the pattern continues. alix: speaking of consensus, i feel you've seen more positive revisions in europe than here in the u.s. that dichotomy will play out as well, which is interesting. the question is how does the outlook sum up in light of the trade tensions but also u.s.-eu. also central banks and the fed coming out on wednesday. f

then you have names like l'oreal, lvmh, daimler.e automaker with the most short interest on that value level. then the list gets a little bit more diverse with a lot smaller companies. you look at short percentages of shares outstanding. dani burger and i both agree it is probably a little bit more fair. you have companies like fraport, peugeot, royal mail. those are the type of companies in the top shares of short interest outstanding. anna: ok, thanks very much. annmarie hordern with the latest on tesla and the broader short story. thank you very much. up next on the program, it is always 5:00 somewhere. somebody in our production team seems to think 5:00 is the magic number. we will be speaking to the brewdogs ceo, james watt. more on that next. this is bloomberg. ♪ anna: welcome back to "bloomberg markets: european open." european equity markets on the back foot. enthusiasmthe same from shanghai, so down to touch on european equity markets. u.s. futures point low. let's talk about what we see from a sector perspective. european

sales, i do think the worst is over, given that in the first six months of 2020, lvmh was affected by lockdowns in countries. going forward with that coming to a halt, i do see sales decline moderating. from a profit perspective on the other hand, there is the likelihood and risk that the profit declines will continue in the same magnitude, given that costs are stickier, particularly when it comes to wages. that alle know by now the employers are trying to hold onto as many employees as they can. and this will probably be one of the bigger challenges, not just for louis vuitton but for retailers globally into the second half of the year. we saw second-quarter sales growth at 65% in mainland china. the question really is that sustainable? >> right. that is a huge number, obviously. on a year on year basis, for that to continue, into the second half of the year, i think that will be too optimistic, given that what has been baked into this 65%, we have to factor in the pent-up demand that came in. because in the first three months of 2020, shoppers were not able to head out to do their n

look for companies like lvmh and l'oreal to move. finally, m&a news. valve maker, the former being the big swedish industrial giant. the offer is for about $2 billion takeover and it will be a public cash tender offer. anna: thanks very much. a couple of things to watch out for. a lot of the market moving stories. keep an eye on anything to do with copper. a strong rally in copper prices. open set, the market for a bouncing european stocks. ♪ anna: we are a minute from the start of cash equities trading here are your headlines. stocks rise as investors look ahead to result season with some optimism. even as investors shake off the corporate impact of the coronavirus, infections rise from florida and hong kong. oil slips as opec-plus is said to be planting seeds out of control in august. they meet midweek to discuss how to tinker without affecting prices. plus, poland is set to win the country's presidential election by a thin margin. the result is pivotal for the nation's future ties with the european union. warshaw --in warsaw shortly. positive on the