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tv   Bloomberg Markets European Open  Bloomberg  December 22, 2020 2:00am-4:00am EST

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anna: good morning on welcome to "bloomberg markets: european open." i'm anna edwards in london. risk of, concern over the u.k. coronavirus variant overshadows a new stimulus deal in the united states. final push, boris johnson offers a last ditch proposal on fishing
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as he races to reopen trade routes to france. , draggingring down the s&p 500 lower. lots to discuss this morning. we are nearly at the end of the year. let's get to breaking news, we have the backward looking third-quarter gdp in the u.k. the economy in the third quarter grew by 16% from the previous quarter. we are hearing that the u.k. economy shrank versus a year earlier. in the third quarter, the economy was 8.6% smaller than the previous year, but it grew from the second quarter. .t is backward looking questions remain over the
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resilience of the u.k. economy over the winter months. we saw bluebird economics revising down there forecast and estimate for the u.k. economy. we will go into another recession in the u.k.. tension across the channel. that is something we need to keep our eye on. let's get to the futures. performancergent between the u.s. and europe. european futures, some recovery stateside yesterday. european futures looking mixed. ftse futures to the downside. dax futures fairly flat and uncertain. thechallenges most notably
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variant of the virus in the u.k., that is dominating investors thoughts. u.s. futures pointing to the downside a little. considerable lost ground yesterday. down 0.3%ed to close on the s&p in the u.s. fromergent performance monday's global session, we are seeing futures reflects that. we have the stimulus deal signed in congress, it now goes to the president. it has not done much to take the risk off mood from the market. the new variant of covid going around the world, a vaccine -- asian session down. the dollar continues to gain.
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it was in ascendancy yesterday, that continues to be the case today. the dollar up again, the pound down again. 1.34. it has been all over the place. a lot of this has to do with brexit, and the latest on covid. weaken.d continues to ftse futures are pointing into the red. the market remains risk off as a new coronavirus variant in the u.k., and a wave of travel restrictions. made a fresh proposal on fishing to the eu to try to secure an 11th hour trade deal. let's get to the market conversation. aquino will give us her
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insight and shed some light on what is going on in u.k. assets. brexit we seet this range in the last couple of days, when we talk to investors, they say it is not even. the range around brexit and what it might do to the pound is asymmetric. there is upside to the pound. if there is no deal, there is more downside, is that what you are hearing? kristine: absolutely, and that speaks to how to the market reacted to the brexit news. that was evident in the incremental good news we saw last weekend where we saw upside in the pound, but it was not a unequivocalal -- positive.
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the trade and negotiations are may be good in cable, but not much more. until we get a definitive answer, it is unlikely the pound will be breaking out of its recent rate. it is above that 1.33 figure that i see is key, because that marks the separation between last weekend when they u.k. and e.u. agreed to keep the door open to further talks. we are above that figure now. in anys desire to price optimism. see a definitive answer, these ranges will probably persist. let me get viewers up-to-date with lines of singapore, they are stopping all
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travelers from the u.k. from entering the country. they will only allow its citizens living in the u.k. to return. so many countries, so many european countries, north american, asian and beyond -- this seems to be the scene running through markets and the global travel universe. day, doing so for a second we see this cautious narrative around a new variance of covid in the u.k., and what that does to how tough of a winter we have in the northern hemisphere. kristine: absolutely. stemsese headlines confidence, and that is what markets are going off of now. confidence that we would get a stimulus deal from the u.s., that came to fruition.
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there is remaining confidence we will get vaccines rolled out to the mass population, and the virus will be contained. confidence gets punctured by headlines like a new strain coming out of the u.k., and countries refusing travelers from the u.k., this create a narrative that the pandemic is here to stay into 2021. ts the notion of economies reviving and life going back to normal, which at its core is a confidence buster. anna: yes, in the short-term it raises questions about lockdown measures that will be necessary. we saw that playing out over the weekend in the u.k.
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it raises questions about the vaccine, we hope not, but as we heard earlier, we need the scientists to tell us that definitively. something more uplifting is an agreement in congress around this $900 billion stimulus deal or relief effort. some do not like it called as a stimulus deal. regardless what name we give it, these are the assets we think will benefit the most. tostine: anything sensitive consumer activity, especially funds distributed to individuals, that will go a long way in boosting any consumer sensitive sector like retail primarily. that will be a boon for the small caps any fiscal support will be most helpful to that
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sector, which has been really battered in the last few months. bit ofes to a little supporting consumer confidence, especially this time of year. you expect household to be doing last-minute christmas shopping, or maybe shopping the boxing day deals. that confidence will hopefully translate to a boost to consumer sensitive sectors and small caps as well. thank you very much, kristine aquino, who leads our market lives team in europe. when we return, we will talk about the fight against the virus. tightening restrictions, the u.k. chief scientific advisor says further measures are likely
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to be needed and more areas of england to keep the new covid-19 variant under control. this is bloomberg. ♪
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>> it is likely this will grow in numbers of the variant across the country, and it is likely that measures will need to be increased in some places in due course, not reduced. it is a case that this will spread more. the u.k. chief scientific advisor saying that more will need to be done to limit the spread of the new covid-19 variant. the new variant and travel restrictions are weighing on global equities. the stoxx 600 sunk the most since september, and the pound fell the most since march.
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several countries close their borders to britain. we are joined by samy chaar, chief economist, banque lombard odier & cie. i started this hour talking about the u.k. growth numbers from the third quarter, a backward looking to give us a sense of the squeeze put on the u.k. economy by the pandemic, and the extent of the bounce back in the third quarter. how much are you rethinking your prospects for the u.k. facing lockdown measures we have already seen, and the warning from the scientists that further measures might be needed. samy: it is bad news. we have always expected the fourth quarter of 2020 and the first quarter of 2021 to be quarters where restrictions tooin elevated, as it is soon to think the vaccine can safeguard economic activity in those quarters.
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restrictions were going to remain elevated, maybe not as stringent as they are currently. we know they will be difficult quarters. however, as you mentioned, the reality for 2021 will look more similar to what we had in the third quarter, if we managed to keep control of the pandemic, and if the vaccine works. even with the variant, we can imagine the second and third quarter of 2021 will be catch up , and this is what we are focusing on today. anna: you are focusing on the catch up. a vaccine is the best stimulus 2021 could wish for. i wonder what assumptions you are making about that. i am not an epidemiologist, all we can rely on is what we are told by the scientists, who do not think the vaccine will not work against the new variant. what will be the impact of the
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vaccine next year? doy: the only thing we can is look at what we have seen until now, and basically the third quarter of 2020 -- but also taking lessons from what we have seen in asia. if you control the pandemic, the catch up becomes rapid. 2021, if we manage -- thinking about 2021, it means what we have seen in the third quarter in asia should be able to repeat itself in the second, third and fourth quarter of 2021. some sectors are bound to outperform other can -- other sectors. we are thinking consumption, trade, housing as the front runners when it comes to driving the economic to video for 2021. --n you look
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anna: when you look at the global economy next year, where do you see that happening the most? is it the areas beaten up geographically that will rebound the strongest, or you looking at the scarring on various economies? samy: i would say where we expect the fastest economic catch up has to do with two things, first is the vaccination .rocess, where it is deployed this is an element of catch up. we see good news from the u.k., a good vaccination process in the u.s., also in europe, and it has started in china where it might take more time in some emerging markets. eventually -- and the second help to catchill up is the stimulus you put in
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the system. the safety net from these quarters where you keep restrictions high. the u.s. and europe have done a good job, ahead of the curve when it comes to being able to safeguard the economic recovery. again, the u.s. should be able to recover its output by the third quarter. we have high expectations for asia. this is how we see the economic environment in the coming quarters. anna: thank you so much. samy chaar, chief economist, banque lombard odier & cie stays with us. let's get a bloomberg business, some top corporate stories we are covering. drag ons the biggest the s&p 500 on its first day of trading. the electric carmaker represents
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1.6% of the index, ending the day as the sixth heaviest weighted stock. tens of millions of shares were purchased friday ahead of the inclusion. pellet gun is buying -- pele ton has its largest deal to date. has struggled to keep up with demand. apple is planning to build a self-driving car for consumers -- it isaccording developing its own technology. they have been working on driverless cars 2014, but paired back its ambitions a few years ago. that is your bloomberg business flash. still to come, 40 minutes into the start of european equity
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trading, relief at last. congress finally passes a massive stimulus bill. what impact will that have? we will discuss. this is bloomberg. ♪
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anna: welcome back to "bloomberg markets: european open." 40 minutes until the start of cash equity trading for tuesday, the 22nd of december. european futures looking more mixed than the u.s. counterparts. the u.s. markets fellow long way then rebounded yesterday. european futures look more mixed. the u.s. house and senate passed a long-awaited spending bill
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combining 900 dollars billion in pandemic relief with $1.4 trillion 32021. it includes support for small businesses, $600 payments to individuals, supplemented employment -- unemployment insurance. samy chaar, chief economist, banque lombard odier & cie is still with us. how would you characterize what we saw passed by the u.s. congress? ?ow significant is it some say it is not stimulus but a relief package. regardless of the name, what impact will it have on the u.s.? things.would say two it is on the high side of the range we could expect, considering the democrats had to compromise with the republican senate. the republicans in the senate had a $500 billion package ready . the fact they compromise to get
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a $900 billion deal is on the high side and makes it a significant package. the second thing, you will avoid any fiscal cliff risk for 2021. that allows to secure the recovery, especially in the first order where joe biden will have to increase the restrictions on the economy to contain the spread of the virus before the vaccine can be more heavily deployed. forffers economic security the quarters to come. $900 billion is close to 5% gdp, a substantial package. that would avoid -- would allow to avoid economic risk. it does secure the momentum for 2021. anna: it will be interesting to see what incoming president biden will have to do to
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restrict daily life a little bit in the u.s. with all of that in mind, and the stimulus and play, you like cyclicals. why the confidence? samy: we are in a recovery. there are risks to this recovery . there are risks around the efficiency of the vaccine when it comes to the new variant. of there risks withdrawal of policy support. there are risks when it comes to brexit. the reality is we are in a recovery. there will be bumps on the way. the first quarter of 2021 might be a difficult quarter. when you are in a recovery, we expect the things that traditionally happen in a recovery to happen, that means and outperformance of cyclicals
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and trade sensitive assets and emerging markets and small caps. we want to be exposed to that reality. anna: thank you very much. samy chaar, chief economist, banque lombard odier & cie. , tightening restrictions, the u.k. chief scientific advisor says the new covid-19 variant is more transmittable. we speak to emma hodcroft, molecular epidemiologist, university of basel, who works on how viruses evolve over time. this is bloomberg. ♪
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,> the intervention needed regardless of which variant it is are the same. at that is key, and where we should be focusing while doing lab experiments to figure it out. , thenew variant transmitted ability is suggested , does it prevent antibodies from binding to the virus? we have an indication, these are still questions scientists will
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hopefully answer in the coming days and weeks. was the who chief scientist speaking to bloomberg this week about the new variant of covid-19 found in the u.k. many questions remain about the new variant, but britain's chief scientific advisor said it is clearly more transmissible. less talk about this with dr. emma hodcroft, molecular epidemiologist, university of basel. i know you have a lot of experience on the way pathogens evolve. this seems a good conversation to have with you now, given the work you do. how concerned are you about the new variant? emma: it is important to remember you take in is normal for a virus, it is part of its life. because of these mutations we at aariations rising
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normal frequency. when one variant behaves differently, that is what happened here. one little difference and how a variant is behaving might not be something to worry about, but what is catching the attention here and causing alarm is indicators that this variant might be more transmissible. do we have an opportunity where we can take measures to stop the variant spread? anna: maybe more transmissible seems to be the view of the scientists in the u.k. what about the effectiveness of the vaccine? and your assessment of how long it will take to understand that. bodybeen reading that the recognizes many parts of the spike, and it will depend how many variants get in the way of that process? a greatactly, that is
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explanation. the vaccines teacher body to recognize the whole spike protein. a few differences on a part of the spike means our body will recognize the virus. the question is how many mutations would it take for it to be less effective, and are there specific places where it will happen more. at the moment, there is hope the vaccine will work against the new variant. this.t hard answers to unfortunately, because getting good evidence will take a few weeks, because the virus needs to be grown and exposed to people who have already been infected and have antibodies to work against the virus. anna: if it takes a few weeks, will that give us something definitive? can we expect to know that the variant will be defeated by a vaccine? emma: i think we will have early
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results in a few weeks. getting it down one way or the other is often not something done quickly in science. scientists are working really hard to get as much information as possible. i think the general consensus is this variant is not going to be totally unresponsive to the vaccine. hopefully it will work as well , but iformal virus there is a decrease in the efficacy of the vaccine, it will make a huge difference as far as protecting people, even if decreased a little bit. mutation,erms of the i have seen this has to do with the deletion of amino acids, and that causes it to be more transmissible. is that something we can hope to understand more? emma: this is a complicated
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question. the variant in the u.k. has a number of mutations, more than we would expect, and that is what has caught scientists' attention. we no one seems to increase the virus ability to bind to cells, and another may mean it can successfully evade the immune system. you might not catch it as quickly in your body, but a lot of this is based on early work and computer simulations, and what we know from other viruses. we still need more work on the effect of the mutations. scientists are working around-the-clock to figure this out. anna: do you think it is worth exploring whether there are links between blood plasma treatments given to seriously ill patients, and the development of the variant? if that is the case, doesn't suggest we will find more variants in the united states or
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advanced economies were blood plasma treatments have been undertaken? emma: the idea behind this theory is that the variant may have evolved in someone who has -- who is an amino compromised person. it means their immune system does not work as well as a normal person. maybe they have an immune disorder or an organ transplant or a disease. becoming chronically infected. most people have it for a few weeks, but if your immune system cannot fight the virus, you might have the virus for months. your immune system is not attacking it the way it is in a normal person, so it gives the virus an opportunity to explore a new landscape. it can evade your immune system and live inside you for a few months. if that person receives a particular treatment, that can
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alter the selection pressures on the virus, changing how it mutates and responds. that may be what happened here. we do not want to deny treatments to people. this is probably a rare case, but it highlights the need to treatments,ents' and make sure they do not pass it on to others. thank you so much for giving us your time. hodcroft, molecular epidemiologist, university of basel, a timely conversation with her. some of the top corporate stories we are covering up bloomberg, in order to secure a brexit deal, u.k. may compromise. boris johnson i some ground on fisheries if the eu follows suit and other areas.
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the u.s. is adding more than 120 chinese and russian companies to firms with military ties. it curtails exports and means anyone who wants to sell products to the firms that could be used for military purposes will need a license. the united states is targeting beijing over issues like hong kong to 5g technology. the european union has approved the vaccine from pfizer and biontech. officials at europe's health regulators say there is no evidence the vaccine will not work against the new variant. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. a quick check on the markets, we are 22 minutes from the start of
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the equity trading session. futures point to the upside. ftse futures, a bit of a laggard. the pound down 0.3%. of volatility in the u.k. currency now. the s&p 500t day in landed with a thud, dropping 7%. the slump was re-accelerated after a report said apple is moving forward with self driving technology. joining us now is dani burger. how much of a drop was about into self driving vehicles? it,: it was a small part of about 5% was the slump before we got the apple news. a large part of it was the
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reversal of the wildness of friday's trading. shares tradedf hands on friday, by far a record, more than double the last record for the turnover revenue visual stock. that prior record was tesla as well. trading, it ended the day about $48 billion put in an order overpaid for tesla by 5%. that pumps up its price at the close. on monday up falls by about that amount that the big trade overpaid for. a lot of it is technical. it is not much of a slump for tesla, but for a lot of strategists and hedge funds, they look at tesla and say the inclusion is over. what is next that could take it higher? anna: does tesla's inclusion
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change the equation for people who own the s&p 500 index? we have thought about this running up to the point tesla was included. we thought another portfolio position was being done ahead of time. dani: absolutely, and monday was a good example of what happens in this new world. the s&p 500 owns tesla as well. stock on sixth biggest the s&p 500, and more of its moves will be dictated by tesla. tesla was responsible for four points of its loss yesterday. we can see a more volatile future for the s&p 500. the s&p 500s says would have gained 2% this year if tesla was included from the start. it can have an impact, but
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overall it is somewhat minimal. with thank, dani burger the latest on tesla and the impact the carmaker has on s&p. coming up, bottlenecks at keyport's are wreaking havoc on trade. we will bring you that story next. this is bloomberg. ♪
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anna: welcome back to "bloomberg markets: european open." 50 minutes to go until the start of the cash equity trading session. we will talk about the global shipping conversation. boris johnson said he is trying to reopen trade routes to france. after political bartering failed to end the chaos at the u.k.'s
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busiest port. let's bring in richard ballantyne. do you expect the blocks we have seen across the channel by the french as a result of the new variant of the virus? do you expect that to be removed? richard: we would expect some move their. we think it will be a reinstatement of the exemptions for key workers such as freight drivers who are important to keep the u.k. supply. only time will tell. the hope today is there will be more information in the afternoon. anna: will there be a testing of drivers? will that be part of the strategy to unblock this? richard: it has been discussed.
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i am not sure how easy that will be to implement, but it is something the european governments will look at, because they are understandably looking at protecting their populations from this new strain. driversi think lorry and freight operators are low risk. they spend time in their cabs and are not mixed with the general population. they are coming in and dropping goods off, then going back to europe. a lot are european nationals, the french, the germans, they will not want to see their citizens stranded in the u.k. for christmas. there will be a political solution to this as well. anna: will ports be cut out of supermarket supply chains in response to this? we are listening to supermarkets talking about air freighting in
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fresh produce, or using freight trains. is that what you are seeing? richard: that may be solution for some goods in the short-term. 95% of the u.k. physical trade is handled by our sea ports. i do not see that as a long-term viable solution. airfreight is more costly. a few things would make sense to do, but in the long run we see sea ports as the remaining solution to our logistics challenges. hearing suppliers talking about not supplying the u.k., because we are drawn to this conversation because of the covid variant response. we always knew we would focus on ports because of the transition arrangements.
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we look at it a different way. u.k. is an import driven economy, and a good market. it is what we want to push to buy, and if suppliers are willing to come to the country, because of the situation people might not want to come here and risk being stranded here for a few days. effectively we would see ourselves as requiring a lot of goods, and where we source things. the european markets will remain geographically closer and cheaper to use. a lot of trade will continue with europe after brexit, although there will be some issues to overcome, such as cross-border controls, custom controls etc. only time will tell if those markets will stay as viable as they are. anna: when you say you see
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exemptions for truckers and key workers, and that is the way it could be resolved, is that because you have had conversations that lead you to believe that? or is it your suggestion as to how we break the lock down here? richard: it is a combination of both. it is something we are encouraging the u.k. government to consider and lobby for. also, a lot of european countries will look at pragmatic solutions, and they will allow their goods into the u.k. we are still a viable market. a lot of revenue comes from u.k. manufacturers, u.k. retailers. there will be a pragmatic solution at some point. who knows in this current health
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climate and strain of the coronavirus? it could be more complicated than we first thought. only time will tell. anna: i want to ask about a global trend, we have a lot of conversations with the shipping industry about the late arrival of containers, high prices for shipping globally, all driven by changing consumer habits and patterns, and a resurgence of consumer demand. this is putting pressure on british ports, and then you add the brexit reparation and seasonal demand. how much of the global narrative is part of the destruction we are seeing? richard: yes, our container sectors have a busy few months, and our terminals have had operational challenges to overcome. a is worth noting there is global spike at the moment, and
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that is exacerbating the pressures in the u.k. the pre-brexit stockpiling is lack ofting to a storage space and other things coupling up for a perfect storm. it is something we are getting through. the first quarter will be critical next year. with the brexit transition ending, we imagine things will calm down in the new year and hopefully get back to normal. anna: thank you very much, richard ballantyne, ceo, british ports association. thank you for joining us, and come to talk to us again soon as we focus on this industry. and it's away from the european market open. we will get your stocks to watch, including vodafone offering to buy out the remaining part in german telecom
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firm. we will have more on that next. this is bloomberg. ♪
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anna: welcome back to "bloomberg markets: european open." away from the open. dani burger joins us for the rundown of stocks to watch. dani: vodafone announcing they are buying 70% of kdg. they already own 70% of the shares, but if everyone tenders their shares, they could end up spending 2.1 billion euros on this deal. at minimum they will own 93.8% of kdg shares. ryanairy for airlines,
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may be under more pressure today, canceling 12 flights, citing new protocol from the civil aviation authority regarding brexit, having to do with u.k. operators using foreign planes. they say these are not new rules and they have a long-standing guideline. airbus losing some of its deliveries. ordersr cutting back on of about $5 billion worth. at the same time, easyjet will not take new jets and the fiscal year of 2021. they say they will order about eight in 2022. this is bad news for airbus and easyjet, lower demand. anna: thank you very much. we will talk more about m&a and the banking sector in the next half hour.
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coming up, the market open. futures are fairly mixed. expectations are muted. this is bloomberg. ♪
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anna: one minute to go into the start of cash equity trading. good morning. risk off, concern over the variant overshadows a new stimulus deal in the united states. final push, boris johnson offers a proposal on fishing to secure an 11th hour brexit deal, as he races to reopen trade routes to france. powering down, tesla shares skid, dragging the s&p 500 lower . european futures have been
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negative for the ftse, positive elsewhere over the last hour. reflecting that is a little catch-up with united states. non-london markets lost ground yesterday, a little protected from the downside. those that fell further can now catch up more, so we expect more upside for the continental european markets. the ftse 100 could be held act by negativity -- held back by negativity. by 0.2%, thatown is the first market to open this morning. we are waiting for the other markets to look a little brighter. the ibex up 0.4%. long these early gains last is an interesting question, because u.s. futures .2 the
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downside. butaq futures fairly flat, other futures move to the downside. higher thisdax morning. european equity markets, a positive open because of the new variant of the coronavirus is still a dominant theme we are trading around and european equity markets. let's get to janet mui, director of investment, brewin dolphin shed some light on investment strategy as we head toward the end of the year. let me ask about the growth versus value trade. a lot of people are talking about how value will be to the fore as a result of the discovery of the vaccine. we had a little wobble because of how tough of the winter will be in the u.k. and parts of
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europe. where do you sit as we head into 2021 on the value versus growth debate? janet: there is room for more value to rally, but probably will be a next your story. now, a reminder that the short-term, people are cautious and sensitive to virus developments. growth performing well because of the low interest rate environment. we will probably see some back and forth with the outperformance of value versus growth. the more sustained outperformance probably comes after we get immunity for the public, and recovery in the
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economy. before we see that -- [indiscernible] expect markets to discount that move? and if we are talking about getting back to value, before the pandemic, if we could imagine a world -- i remember talking about whether value will come back, and even then it seems challenged. what makes you sure about the timing, and that we will see that? hard to get the timing, but we know reflation trade has to be driven by eventual normalization of economic activity. that presents a lot of uncertainty. if you look at the economic -- theys, they start expect a more sustained
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recovery in the base case scenario. that is a timeline we can expect for economic growth. that is uncertain, and that is why we say it will be back and forth between value and growth, on growthl have more in january. we are still going to be in a low interest rate environment. that is the thing we have the most conviction on. there will be selective sectors that outperform better. ratesthe low interest makes a big difference. what about stimulus in the united states, stimulus or a support package, whatever you call it, being approved by congress overnight. is that affecting your
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expectations? don't think it changes much, i think the package is below market expectations. it will provide some near-term relief for sure. we think this is helpful during the christmas season as people get $600 in cash. economic resilience of the u.s., we are starting to see some slowdown in an employment numbers. this is needed. it will be helpful at the very least. anna: in terms of the growth story, if you think there is room in the growth narrative to appreciate from here, where do you look for that? faceu think u.s. tech will
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regulatory challenges? we are positive on asia, for a while. it is a region that is outperforming. in terms of the covid situation, china has covid under control. we think they will still have the economic advantage over western economies. also in that environment, asia should benefit from the synchronized global growth because of the recovery and trade, and the sustained low interest rate. is attractive in terms of growth as well. we think the tech sector will continue to go higher. the noises may hurt investor sentiment. have't think investors
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sold off on the news on facebook and google. it will not change the fundamentals. anna: thank you very much. janet mui, director of investment, brewin dolphin holdings stays with us. we will get her thoughts on the u.k. next. the u.k. may be ready to give ground on fishing rights, opening the way for a trade deal with the eu. we will discuss that next. this is bloomberg. when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $400 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience.
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you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store. anna: welcome back to "bloomberg
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markets: european open." the trading session looks positive, up 0.6%. 0.2%.ssets down 1.75%. price is down prime minister boris johnson is ready to give further ground on fishing rights if the eu backs down on other areas. during us now to discuss is maria tadeo. what does a fish compromise look like in a percentage term?
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the u.k. is prepared to move substantially here. maria: as you know well, over the past two weeks, there has been a difficult dynamic where the u.k. is waiting for the european union move on the level playing field, and the european union wants a compromise on the fish first. this is a complicated dynamic they are stuck in. the latest proposals, there is speculation that the u.k. is set to say, we will take a reduction in u.k. waters of 35% from the eu. the u.k. wanted 60%, and the europeans said they would settle for 25%. way forld pave the compromise. there is speculation that the u.k. would be happy for a transition period for five
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years. the europeans wanted 10. the u.k. was pushing for three. this is a point between the two sides. anna: we are getting down to discussing whether the eu will reduce its catch in u.k. waters by 25% or 33%. we are at that nuts and bolts level. disrupting relations between -- across the channel, we spoke the ports ceo. what is the latest? maria: the prime minister hinted that he had been on the phone with emmanuel macron, and was hoping for an intervention to make this move. when you look at the flow of goods entering the u.k. being stopped now, there is no signal
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from the french that this is happening imminently. the language out of the french government has softened. know that they want to put in make this rules to sustainable. if that happens, it would be key to reopening. yesterdayther blow for the travelers into the u.k., portugaln and fortun restricting access to their countries. they are not accepting any planes for the time being. anna: thank you very much. maria tadeo, a reporter in brussels. fightms of the eu's
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against covid-19, biontech says the eu countries will get the covid vaccine in the next five days. we will be speaking to biontech's cco later this morning. don't miss that conversation at 9:00 a.m. london time. janet mui, director of investment, brewin dolphin holdings is still with us. i wanted to talk to you about the u.k. risksors do not see the as symmetrical around uthe pound. what is your assessment? the risk depending on the outcome, i think it is because resilientas been given the potential of headline news of no deal.
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suggest complacency, and they are optimistic a deal will be struck. we do not think the elements of no deal is priced in at the moment. if we get a deal, we think sterling would rise modestly, not too much upside. it is not a scenario that will have significantly more downside. if there is no deal, what would be the response in equity markets? if we saw substantial moving sterling, it sometimes has a correlation to stocks, but not always. between the knee-jerk reaction and considered response, what do you expect the reaction to be? think.that is what we
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the knee-jerk reaction for the ftse 100, because the economic situation is tough with the virus, plus no deal brexit. it has to be a negative reaction. if there is a no deal, pound -- the pound will fall significant lead more. we think the ftse 100 should bounce back after investors realize there is a negative correlation between sterling and the ftse 100. a knee-jerk reaction [indiscernible] wouldthink the ftse 250 be preferred more in that case. anna: what do you expect from gilts? today we see u.k. assets
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standing out. the ftse 100 is underperforming from an equity perspective. gilts seem to be underperforming also. we see weaker demand, weaker prices, rather, and higher yields on u.k. 10-year gilts. what you expect from gilt markets? janet: we think if there is no deal, gilts should move lower. that is because we think that would be the response from the bank of england, not having interest rates, but more quantitative easing. we think there will be more demand for government bonds, including gilts. there are concerns about the government budget position and the deposition, and maybe initial fear of the u.k.
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government gilt market. we do not think that should move much higher from here, because we think there should be more downside pressure from the the safefront from havens. it will noterally move lower. the 10 year should move higher. if there is no deal, the 10 year should move lower. much, janetyou very mui, director of investment, brewin dolphin holdings. janet will continue this conversation on bloomberg radio at 9:00 a.m. u.k. time. let's get a bloomberg business, some of the top corporate stories. vodafone is offering to buy out the remaining shareholders in seven yearsom firm after it agreed to buy the
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company. back then it managed to acquire 77% but was blocked from buying the rest. apple is planning to build a self-driving car for consumers by 2024, according to reuters. the company is developing its own battery technology. apple has been working on driverless car's since 2014, but pared that back a few years ago. it tesla was the biggest drag on the s&p 500 on its first day of trading. the electric carmaker maker represents 1.6% of the index, ending the day as the sixth heaviest weighted stock. the fall follows a surge on friday when fund managers purchased tens of millions of shares ahead of inclusion. that is your bloomberg business flash. coming up, finding a way out of the slump. could 2021 be the year of
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banking m&a? that is next. this is bloomberg.
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anna: welcome back to "bloomberg markets: european open." we are 22 minutes into a trading session that has moved higher. we are not by any stretch making up for the losses from yesterday. some lost more than 2%, some
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more than 3% in yesterday's session. the stoxx 600 is up 0.8%. we see underperformance on the london market. it is not all about oil or banking in london, it is also about pharma. astrazeneca moving lower, that is a heavyweight on that index. europe's biggest banks are coming around to a realization they need a radical plan to get out of the slump. m&a is seen as the way to create a european banking giant. look at some of the pros and cons. nicholas, you have been working with a team that has put together a fascinating piece what you talk about the need for m&a and how it could be one of the solutions for the
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sector, and the possible deals that could be put together. when you look at the returns the european sector made versus the and, they are not as good, european banks are cheaper as a result. does m&a seem like a obvious solution? nicholas: when you have an industry with overcapacity, the natural thing to do is remove some of those companies. in the case of european banks, the environment they face is tough with negative interest rates in the euro area, record low interest rates in the u.k., and then cost basis that has not been managed efficiently. the digital revolution has upended banking, and the reduction in staff has not been commensurate. if you put these banks together, you would have a larger amount
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of revenue, and be able to eliminate a large part of the cost base for the banks, then hopefully be able to lift these banks out of the misery they are in at the moment. ,nna: is one of the solutions m&a is part of the solution, will it be enough to do and market deals or cross-border m&a needs to happen for the sector to start to perform as well as the u.s. banking sector? it depends on what you want to achieve. each deal would be unique, but if you want to address the cost base, and in market deal is the easiest to do. you have an overlap of branches and people within the same country. i.t. systems as well, and you can switch out i.t. systems and close some of those branches. that allows you to tackle costs.
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if you have a bigger picture view, if you are true european and want to connect the different european banking markets, cross-border mergers within europe would be one way of ensuring the flow of capital across different markets. somewhere where the renovation is in place, it is hard for banks to move the liquidity and capital across markets. work in progress for banking regulators. a lot of conversations start with which comes first. thank you very much, nicholas comfort joining us with a look at m&a in the banking sector. up next, a new lockdown has forced london theaters to shut their doors again. what will the industry look like in the near and distant future?
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we will discuss that next. this is bloomberg. ♪
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♪ anna: welcome back to "bloomberg markets: european open" 30 minutes into your trading session. european equity markets showing some resilience today, bouncing from the dreadful story of yesterday. the ftse does a little worse today. while we see the stoxx 600 up by around 0.9%, the ftse is fairly flat. better gains coming through in germany, spain, and milan. in terms of the sector picture, all sectors in positive territory. banking sector the most of
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those, up by 1.6% today. about 0.1%.ces down you will see the share price of vodafone. of kdge getting the rest over in germany. skanska divesting a majority interest in two office properties. that is a seattle business selling that asset for 660 $9 million. astrazeneca's stock price moving weight on the market. we see some weakness in that particular stock and sector. let's get a first word news update. the u.s. house and senate have passed a giant year-end spending package. it combines 900 billion dollars in pandemic relief with $1.4 trillion in regular government spending.
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the votes cap nine months of gridlock over a new rescue plan. the vote now goes to president -- bill now goes to president trump for signing. -- openingnning trade to france. boris johnson says he is working as quickly as possible to end the chaos in dover, the u.k.'s busiest port. dozens of countries are now restricting flights from britain. in order to secure a brexit deal, u.k. may be looking to compromise. boris johnson may give some ground on fisheries if the eu followed suit in other areas. bran could accept the bloc cutting the value in u.k. waters by 1/3. previously, it was asking for a 60% cut. 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. 8:32 in london. as london finds itself and another lockdown, theater is
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among the many industries hit the hardest. some shows had just started to welcome audiences back for the first time since march before being forced to close their doors once again. nimax runs of some of the most iconic theaters in the west end. it estimates it will have lost over 20 million pounds in expected revenue by the start of next year. joining us now is nica burns, i am pleased to say, nimax theatres' co-owner. i want to talk about hope for 2021, but just give us a sense of how devastating it is for the industry to find itself in lockdown once again this winter. nica: we had opened all six of our theaters. weekeek of december, first of december, we did no less than 43 performances of 12 different shows across our theaters and people came. a bigare big -- there was pent-up demand to return to the theater from the public. we put 20,000 customers back in that weak. in a normal week, the west end
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would be putting something like 350,000 people into london every week. that's a serious amount of people and a serious amount spent in other parts of the economy, particularly hospitality. it's a big blow. it's a big blow to all the actors who had given -- been given their jobs back, all the technical staff. we have no choice but to simply get ready to pick up all over again. yes, the stop and start nature of this is something that many businesses in your industry and in other industries are having to get used to. that must be costly. are you managing to make it less costly, less destructive as you go through? are you getting used to having to operate in that fashion? nica: the uncertainty of the closure and reopening is discord. in order to reopen you have to do a lot preparation.
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it cost 250,000 pounds in reopening costs. quite a lot of that spent on bringing staff out of furlough, but also, we all invested in huge covid preparation measures so that we could keep people safe within the building. we also set up a covid testing house for our own actors with our own nurse. we were testing 120 people per day in order for the actors to go on stage and be safe. it was expensive. have a million pounds additional a million pounds additional cost between lockdowns, but we still intend to reopen again as soon as we can. we have already invested in lots of measures. it would be cheaper for us to reopen next time now that we have done all the work. anna: right, yes. interesting. let me ask you about the support that has been available for
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people that need work in the theater or supply the theater. it operates on many different models. some people come as freelancers, some as self-employed. where is the gap in the weight the government has -- you have furloughed people, but where are the gaps? nica: furlough was just a great, intimate thought of bringing in everybody and saving lots of jobs. a number of people within theater, including most of the performers, so if you are on long contract, you are technically self-employed, even though you are actually on my payroll because of where the tax constructions are. so, a lot of those people fell between the gaps. they did not have the right kind of paperwork. noughdid not have e tax return. they were entitled to nothing
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except unemployment benefits. the industry stood up and tried to help. a great theater and film director went to a big campaign to raise money for theater artists. we raised a lot of money together. that helped. we are talking about small amounts of money, 1000 pound grant to an actor or stage manager out of work. it just was not enough. difficult is very when there are different types trying a scheme that fits everybody. n our case, we found all of our freelancers falling through the screenwriters,, they just did not have a scheme that could apply to them. it was difficult. anna: yes. are you concerned about the long-term survival of the west end? i don't just mean theaters, i
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mean everything that adds up to the experience, whether that's tourism or shopping, and theaters play a key key part of that. what are your expectations for what a new version of normal might look like post-pandemic? nica: my expectations are that we are going to have to -- like, the whole country and other countries -- there is going to have to be a rebuilding process. i think theater is very resilient. it is resourceful. people think out-of-the-box. we will be opening up across the country. we will be realistic and thinking about the size of the shows. we would like some help from the government in terms of back to business campaigns. i am not expecting 100% return. we have been doing the most fantastic capacities for the last 10 years. is --year, the box office
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i have been enjoying it. we are going to be a little bit tighter on the money. people are going to be thinking about how they spend it. i believe audiences will return but we need to be smart about pricing, we need to be smart about what we are putting on, and we need to slightly lower our expectations in the understanding that it is not all going to be great from day one. twoill take a year, years, maybe three years to rebuild completely. i think there will be enough capacity for us to be able to put out very high quality work. there will be a balance, maybe everybody taking a little bit less to provide the most for everybody. anna: if you are thinking smartly about what goes on, on the others of this, what will we be in the mood to go and watch? will we want share escapism?
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or will we want to explore that experience theatrically? nica: i think we definitely will want to a really big laugh. i am already -- have already found that audiences are very keen just to relieve of the frustration they have had, have , really have a sing good musical theater work, and concerts. exploring how the pandemic has affected us. playwrights have got their pensts ready already -- ready already. we had written covid into the script. the students were winding up their teacher with their masks, teasing her. the audiences really responded to it. we will want to see a little of that, but what i think i might
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-- my next simply production for a while. anna: i can definitely see that. thank you so much for joining us. nica: my pleasure. anna: nica burns from nimax co-owner. coming up, while u.s. and chinese tech giants have surged this year, -- europe -- the same cannot be said for europe's players, so what can make the sector more attractive for investors? that is next. this is bloomberg. ♪
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♪ welcome back to "bloomberg markets: european open" 43 minutes into tuesday's trading session on the 22nd of december. a bitoxx 600 up by 1%, so of a bounce back from yesterday, not making up for all the losses of yesterday but things looking a little more optimistic. the ftse 100 catching up a little. tech has been on a tear this year, with the nasdaq up more than 40% year to date. there is one region where gains in the sector have been perhaps more tepid, and that is europe. what needs to happen to make european tech companies global players? let's get an opinion on that. par-jorgen parson is a general partner at northzone, an early stage venture capital fund. thank you very much for joining
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us. i know that you think that capital and talent are all coming together and aligning in a way that makes next year and the years ahead quite exciting for european tech. why do you think that is happening? par-jorgen: yes, thank you. i think it is important to note that the tech ecosystem is relatively young in europe compared to, for instance, the bay area. i think it is coming of age now. we have seen tremendous strengthening of the tech ecosystem over the past four or five years, with returns actually in the venture capital sector big at par with how they are being produced in the u.s. i think that the public markets are still a little lagging, but i think that will come back with a vengeance over the next several years. capital, talent, and also the market and the sheer size of the market, that is quite important
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in europe and starting to play out in a good way now. anna: do you think that european tech businesses have the ability to operate cross-border in the same way that a business set up in l.a. can operate in new york and alabama and elsewhere? language barrier aside, which might be part of the issue, can you treat europe like one big market? i guess i am talking here about the eu specifically. par-jorgen: well, i think it is a bit of a misnomer to say that european companies are only addressing the european markets. i think the successful tech companies are global in nature. since most of these markets are of small to carry a company more than a billion dollars, they need to branch out outside of europe. you see quite a few of the very successful european companies also sing tremendous success --
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seeing tremendous success out west and elsewhere. even if there are language barriers and such, i do not think it is necessarily that being a problem for the long haul. maybe notarriers are as pronounced as they were maybe 10, 15 years ago. and also, that the sales models have become more and more remote, more and more that you are of getting your software -- and that makes the sales process much less complicated than it was in the past. anna: i know you have got some six unicorns under your belt right now. i do not want to make you choose like picking your favorite children, but i don't have time to talk to you about six. let me ask you about one that is most exciting, maybe one that is
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going to come to market the soonest. what is exciting you in the portfolio at the moment? par-jorgen: yes, we have experienced a tremendous year with six new unicorns. that means that they were nowhere near that level a year ago, but they have certainly benefited from the fast forwarding of the digital adoption due to the covid pandemic. the more exciting ones is obviously hopin, which is an online conferencing tour that went from basically nowhere to a $2 billion-plus valuation. trustpilot, which we were hoping to take to market early next year. we have great hopes and that, obviously. e-invested in the leader in
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a german tier, company. amountse raised massive of funding and are growing like weed right now, which is quite exciting to see. the interesting thing with that model, though it was invested in the u.s., it seems like the european market is much more appropriate to scale a company to a massive size, rather than the u.s., due to how cities are structured basically. anna: ok. so that some of the exciting projects that you have at the moment. technology, this is still a sector over which a long shadow is cast by what happens in the west coast of the united states. there are big giants like google, facebook getting increasing into trouble with regulators. what is your perspective? from somebody who works in a very different part of the tech universe, geographically and
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from a size perspective, what do you see -- excuse me, how relevant is it to you, the size of these businesses? or is it not the size but what they do with the size? par-jorgen: i think they are starting to become more and more a problem for the communities at large. legislator needs to step up again here. although we are all happy that apple invented the concept of do not store, what i think is ok is that they are imposing an apple tax, and basically leveraging their ecosystem monopoly, and basically preventing other companies to be successful. the same goes for, for instance, google or facebook. they collectively i think control some 60% of the global advertising market. they are defining everything from what kind of data to price point to virtually everything,
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hi time fort is the antitrust mechanisms to come to play here and see what we can do to make a viable part of the economy going. in the sense that, very few new apps today can successfully launch because it is just simply too expensive to access the consumers through the app stores. applebecause google and are basically reaping all the benefits. thanks very much for joining us. par-jorgen parson, northzone general partner, thank you for bringing us your insight. up next, today we are asking the question on the markets live blog, which as that will benefit most from the u.s. aid plan? the stimulus that congress has now passed.
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we will put that question to the team and richard jones joins us next. this is bloomberg. ♪
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♪ anna: welcome back to "bloomberg markets: european open" 54 minutes into an increasingly positive session for european equity markets. let's take a look at what is moving these markets with richard jones in berlin.
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from a risk on perspective, yesterday looked dire. today looks more risk on, doesn't it? european equity markets moving 1.2% higher, but the dollar also on the rise. i wonder how much of a clean picture of risk appetite we are getting here. richard: i think one of the things that we need to remember is that this time of year, we can get some pretty quirky price action. you are getting investors reducing risk, trying to close their books for the year. a lot of investors actually taking profit this year. i think those dynamics are at play. the look at the sort of, reader across from yesterday and we arei think net-net, retracing about half of the loss yesterday today. we are halfway back to reducing what i think were really steep losses in european equities yesterday. i think we are going to have to monitor the news flow. i think the elements that drove
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equities lower yesterday are still in play. i think the short-term pandemic considerations are something investors are still quite worried about. we are halfway back from where we were yesterday. let's see how it pans out the rest of the week. anna: yes, all about that vaccine -- virus variant and that vaccine. which assets benefit from the u.s. aid plan we surpassed? richard: -- saw past? richard -- passed? think a lot of the aipac should is a ready priced in -- the aid package is already priced in. i think it is very much by the rumor. that seasonality is playing a part. it is yet to be seen how effective this latest initiative will be in helping the economy. that will become clear in the coming months. for markets, the impact has probably already run its course.
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anna: richard, thank you very much. richard jones in berlin. thank you very much for joining us. european equity markets on the front foot as we bring this hour of programming to a close, up by just over 1%. all sectors in europe in positive territory. this is bloomberg. ♪
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♪ >> global assets show a mixed picture as investors weigh the risk of the new variant of the coronavirus. a new u.s. relief bill. a challenging christmas. boris johnson offers a last ditch proposal on fishing to secure an 11th hour brexit deal as he races to france. biontechch explores -- explores options to expand vaccine production. we will speak to


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