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tv   Bloomberg Markets European Open  Bloomberg  January 20, 2021 2:00am-4:00am EST

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anna: good morning. welcome to bloomberg markets the european open. i'm anna edwards alongside matt miller in berlin. matt: good morning. today, the markets say everything to play for. stocks and futures trade mixed amid earnings in hopes of more stimulus. the trait is one hour away. top headlines from the bloomberg terminal. it is inauguration day. a new era begins in the united states of america.
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joe biden is sworn in as the 46th president. conte battles on. the italian from minister works to broaden support of an outright majority in a crucial senate vote but at least he won. and lockdown for longer. merkel tightens covert restrictions as germany reports the highest number of daily deaths since the pandemic again. we are under one hour away from the start of cash trading in europe, in the u.k. as well. take a look at futures. gains across the board, although they are fairly tepid. dax futures up only 1/10 of 1%. we do see ftse futures up about one third. in terms of u.s. futures, we also see the subdued gains on dow jones and s&p in many contracts, while nasdaq futures rise 6/10 of 1%.
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anna, we've got a couple of breaking headlines here. in the u.k., i see consumer prices rose 0.6% which is better than the estimate. anna: yeah, absolutely. a rise of 0.6% in year on year number, the estimate was 0.5%. better if you like inflation. let's have a look at how that compares to the yield environment. u.k. inflation up with real yield dropping to -0.4%, according to bloomberg calculations. that puts some investment perspective around that. the big question around markets right now, the fiscal side of things, how long the government will keep the furlough schemes and other support measures in place. from a monetary policy or perspective, the potential for negative interest rates. the next meeting until february 4. interesting to see how that narrative develops as we head towards february 4. we will be speaking to bank of america's evelyn hartman later
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on in this half-hour. we will get some further perspective on the bank of england story and how this inflation plays into that. quick word on burberry, q3 retail comparable sales down by 9%. the estimate for a drop less than that, a .3%. broadly in line with what was estimated. they see modest increases in compliant costs having to do with exit. reference for fresh use. intriguing to see a company like burberry doing this as well. digital sales growth over 50% to interesting to see the narrative around digital coming through. same is true with richemonte. luxury very much and focus. this is what we see from european equities -- asian equity markets come up around half a percent. playing all kinds of narratives. we listened to janet yellen speaking to the senate as we wait for the inauguration ceremony.
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talking about the fiscal side of things for janet yellen and reflation but also nasdaq outperforming yesterday. it could do so again today with netflix earnings being worked in. they doing fairly well come up half a percent. alibaba flying on the reappearance of jack ma in the spotlight. the dollar retreating back with yields fairly stable. there seems to be quite a lot of different costs counts in the mix this morning. the big story of the day, joe biden's inauguration as u.s. president is hours away. the swearing-in ceremony will be unlike any other in history, taking place against the backdrop of a raging pandemic and political divisions. the streets of washington, d.c. have been sealed off and concrete slabs are blocking off the central area due to fear of a potential attack. joining us with the latest is bloomberg's balance of power editor kathleen hunter.
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what should we expect in today's inauguration. we are seeing there's a heavy security presence. the people will not be in there enforce has previously that a lot of that has to do with covid, not just security concerns. what do we expect today? kathleen: that is right. going back to even the fall, we knew this ceremony was going to look a lot different because of covid from recent inaugurations we have seen where we've had crowds of people packed shoulder to shoulder from the capital although it back to the lincoln memorial. we knew that was likely to not happen or replicated this year. obviously the attack two weeks ago today on the u.s. capitol has further dramatically shifted in terms of the security question how today will play out. instead of people, there will be american flags set up on the national mall. that is what biden will look upon. trump will not be there. he is scheduled to depart washington and a few hours now and head to florida to
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mar-a-lago. he will be the first president since the 19th century not to go to the inauguration of his successor. that will obviously make for a dramatically different event. this inauguration ceremony is shaping up to be quite different from what people have come to expect but i think heading into the day, security concerns have been such if biden is able to come out and take the oath of office and be sworn in and go about the pomp and circumstance without some interruption or unforeseen event, that will be considered a win for everyone involved. matt: i went to bed last night expecting to wake up to the pardons. i knew it would probably come late and i was not disappointed. talk to us about the 70 plus individuals that trump has let go, basically. anna: i think in some ways, the most significant thing is that trump and his family members are
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not on the list. we anticipated that as of yesterday but had that confirmed when the list came out is pretty significant. there had been a lot of talk about whether or not trump will issue himself a preemptive self pardon or pardons for members of his family in case any of them are to face federal charges. that didn't happen. although, we did see pardons for lil' wayne, the rapper. we saw a pardon for steve bannon, his former campaign manager. there were notable names with the big headline is that trump did not take a step that his advisers advised him against which is the pardon himself. anna: thank you very much for bringing us the update. kathleen hunter. coming up, we will bring you the live coverage of joe biden's swearingen from 4:00 p.m. london time. back to the earnings story. very strong numbers through from
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asml. we will speak to the ceo of the chip equipment maker about the latest company earnings. this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.
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matt: welcome back to bloomberg markets. we are 55 minutes away from the open and looking at green arrows across the screen in terms of futures. only 2/10 gains but green nonetheless. let's get the bloomberg first word news with laura wright. laura: more than 400,000 americans have now died of covid-19, the world's highest death toll. the u.s. has given more than 35 million vaccine shots, with president-elect joe biden saying he wants to deliver 100 million in his first 100 days.
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the number of hospitalizations in california is starting to drop. germany is extending and tightening its lockdown. nonessential stores will stay closed until february 14 but it stops short of imposing a national curfew like france. chancellor merkel's warning and made it need to impose border controls to guard against new variant of the virus. italy's prime minister has survived a crucial confidence vote which fell short of an outright majority. he campaigned to get centrist and independent lawmakers on his side but failed to fully plug the gap left by the defection of matteo renzi and is italy a live party. he will need an outright majority to stay in power longer-term. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt, anna. anna: thank you. the chip equipment group asml beat analyst expectations for the first quarter.
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the dutch company has struck an upbeat tone on future demand, high-performance computing and 5g wireless networks. we are joined by the ceo of asml. thank you for coming to talk with us. sales better than anticipated. margins beating targets. we see strong demand from your consumer base right now. yet, you stick to your guidance essentially this morning. i wonder what message you are trying to communicate about how upbeat you are. peter: we are pretty upbeat. we are looking at another year, 2021, another year of double-digit growth. i think basically the industry is firing on all cylinders. the logic compute market which is very strong in 2020, grows another 10% this year. memory, which is how you store data, recovered in 2020.
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now the business will also grow 10%. it is double-digit growth for the company this year. matt: definitely firing on all cylinders in terms of automotive chips at least. you cannot make enough or the chipmakers cannot make enough. to whom you supply the equipment. do you see that bottle not -- bottleneck being opened, do you see that problem being solved anytime soon? what is your outlook on the auto chip situation? peter: i think what we are seeing is the effect of -- the capacity reduction that our customers strive to implement during the covid crisis of last year, especially q2 and q3 of last year were pretty bleak. you can see there are reactions in terms of capacity expansion.
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in the end, turns out to be relatively ok but you get shortages. that is what is happening. this whole industry, the engine needs to start running again. we actually start from that point of view today. we have a step up and have more tools and machines to get more semiconductors capacity out there. anna: how much capacity, how much opportunity for asml to be part of that and to assess how much upside risk there might be for your estimates at this point? peter: i think there is upside. that really depends on the supply chain to really step up. that will take a bit of time. i think it will extend into 2022 even. i think there is upside,
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especially the logic market. we do expect upside in china. that is also governed by some pretty strict measures but if it stays the way they are today, i think there is upside especially for our customers in asia. matt: at the beginning of last year, as china was taking measures, the rest of the world considered draconian, there was so much talk of shifting the supply chain. now it looks like you would rather have reduction -- well, production is more likely to happen in china than in europe as we take those same draconian measures. how has the supply chain shifted over the last 12 months? peter: actually, that has not. it would be too optimistic to think the supply chain is very
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well integrated in the ecosystem, making that for semiconductors that you can change that on the short term. the ecosystem which is pretty seamless and helps all of us because it drives the cost of semiconductors and smartphones down. it drives the cost of electronics down. that has been for the last 30 years. you cannot just from one month to another change that. if you want to reallocate manufacturing capacity, you have to think in years. there is no real impact. anna: let me ask you about something else to do with china and your ability to do business with china. do you ask becca any change -- do you expect any change with your ability to transact with chinese customers based on a handover from president trump to president biden? peter: i think my personal hope does not really matter. what i think is important is that we need to realize that the
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united states and china are in a very competitive situation vis-a-vis technology. that will not go away. i think the view in the united states that china is a big competitor, i think is pretty widespread. what i would expect is that the way we are going to address key issues we have with china, also with europe which i think has to do with level playing field and the non-chinese customers doing business in china and chinese companies doing business around the world. that is an issue. also think the enforcement of intellectual property in china, that needs to step up. there are some common themes that non-chinese countries will have with china. i think biden will probably seek
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much more -- an allied view as opposed to the trump administration. it was one direction and did not go with a lot of negotiations with partners or potential allies. matt: exactly. a much higher likelihood of multilateralism out of this administration. thank you so much for joining us. peter wennink, the ceo of asml, joining us from the netherlands. coming up, we will bring you live coverage of joe biden's swearing-in, that begins in london time at 4 p.m., but i guess washington, d.c. is the most important. 11:00 a.m. is the coverage kickoff. noon in d.c. is when we get the swearing in. we will ask what the new administration means for u.s.
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assets. this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.
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>> this week, we inaugurate a new administration and pray for its success in keeping america safe and prosperous. we extend our best wishes and we also want them to have luck. matt: that was president donald trump wishing the new administration success and a rare gesture of goodwill towards his successor. that comes as joe biden is inaugurated. he will be the 46th president of the united states. aside from his stimulus plan, biden is focused on immigration where he will proposed a shortened pathway to citizenship for undocumented migrants. we are joined by evelyn
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hartman, european economist at bank of america. you focus on the economy of the continent but i wonder what you think the incoming president can do for the economy here. i mean, there was a pretty rough relationship between president trump's administration and europe, among others. will it be better with biden? evelyn: that's our hope. during the trump administration, tensions with europe have let up. we had the standoff between airbus and boeing. it came at a time that was probably symbolic. we are hoping that the frayed relations between the two economies improve and this uncertainty which has created recent costs in terms of growth to the european economy will fade away.
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so that we can indeed stop talking about persistent risks that some parts of the european production have become subject to u.s. that is the hope that there is more calm and less uncertainty from trade tensions going forward. anna: good morning to give. domestically within europe, the fight against current virus and that is a real risk policymakers are trying to wrestle with. we have a story at bloomberg that says the ecb is engaging in some yield curve control with knowledge and targets with specific spreads and wants to achieve between the various governments even if they won't talk about that openly and call it yield curve control. do you see that? i suppose italy is the watch -- the place we are washing continually when it comes to that spread conversation. evelyn: yeah, if you look at the
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emergency pandemic program, that was control from the beginning. the ecb is making it more and more obvious that this is what it is. but it has the role to keep interest rates low and to keep spreads in the euro area low. that in essence is yield control. it is implicit because we don't have a cut. in december, we learned ecb wants to preserve financial conditions. we don't know how much they would allow them to tighten if there's a tolerance level here. but it has all the elements of yield curve control already. we don't call it that exquisitely but in the context when you say your volume of purchases is a function of market conditions rather than a predefined one, that is yield curve control. you mentioned italy, of course, the tensions over the last few days.
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we are going to watch, for instance, next week's weekly data of purchases and volume to see if the ecb has stepped up in size. because yield curve today is implicit, the need to show us where is the data and with market conditions what they mean by that. yes, the theme of yield curve control, we think that is what the ecb is implicitly doing. matt: now that the market believes -- as long as the market believes the ecb is truly here to close spreads, i guess it is an issue anymore -- isn't an issue anymore what about the
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absolute level of bund yields? is there any possibility that we get back to positive territory on the bund in the near future? evelyn: potential growth in the euro area in particular is slowing. demographics are poorer. inflation expectations. the combination of slowing potential growth which a few years ago we were discussing negative over the next decade or so, slowing potential growth and lower real potential growth with lower expectations have nominal interest rates in the euro area. i think it is forward -- anna: thank you very much. thank you for being us your thoughts.
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coming up on the program, jack marie services after months out of the public shares in hong kong jumped . this is bloomberg. ♪
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♪ matt: welcome back. this is the european open. 30 minutes away from the start of cash trading. we are looking a green arrows that continue to increase. but are not incredibly large. right now we want to get the uber -- bloomberg business flash. laura: netflix has ended its
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biggest every year with a bang. adding more subscribers than expected. a .5 million new customers in the final quarter, pushing the total over 200 million for the first time. the executive chairman of disney saw his pay slump to just $21 million. due to those losses, some bonuses were scrapped and executive pay reigned in. they make machines for semiconductors. that is mostly from the tobit induced downturn -- covid induced downturn.
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matt: thank you very much. joe biden becomes the 46th president of the united states today. vowing to heal the countries divisions. he will also be tasked with rebuilding a fractured relationship with european allies. we are joined by one of them now. the coleader of europe's green party. thank you so much for joining us. lit me ask you first about your expectations to joe biden's commitments to the environment. he is expected to sign the return of the u.s. to the paris climate agreement. what will this do in the long run? >> good morning from berlin.
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this is not just in regard to the climate issues. this is about international relations. anna: in terms of the climate story. the u.s. is committed to returning to paris. what does the u.s. need to do? >> this return to the paris agreement is crucial. people might think this is just pro forma. but it is very important.
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on the other hand, paper does not help if you don't reduce it -- emissions drastically. that would be very important for the whole world. there is a question of producing in the future. i believe europe and the new u.s. administration can work very closely together. matt: how serious is europe about cutting emissions? how serious is germany about cutting emissions? especially in the wake of this pandemic that will cost the economy so much money. can germany continue or even
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step up its commitment to stop climate change? >> we have to. we deftly have to. we are all in this crisis together. it would be traumatic if we slip from one crisis, the covid crisis into the climate crisis. we have to invest in our economy to rebuild our economy climate neutral. to build back better. the slogan of the new u.s. administration. but also the united nations. there is this investment in europe and germany. every business has to follow a path for climate change. matt: what does that mean for the green party? especially the fact that this
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seems to be the attitude of many politicians? do you work with a party like the cdu or do you have to remain radical? >> we are all in this together. unfortunately, not every party in germany is so conservative. global warming is happening today. all over the world. 20/20 was a year of fire. we try to push conservatives and social democrats in germany to fulfill the green deal. this is a big project for the
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european union. ambitious climate targets. this is a big coalition in germany. anna: you have called for big spending. you want to ease the debt break. are there any ceilings on debt for your party? how high would you let it go? >> we have to learn from this crisis. you get to the edge of this crisis. with big investment programs and infrastructure.
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especially in climate neutrality. you have negative depths of meaning. anna: thank you very much. joining -- turning our attention to china. jack ma was seen at a livestreaming event. he has resurfaced after months off the radar. describe for us the appearance result today? >> he appeared on a
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livestreaming video conference. he did not address the trouble and challenges the company is facing. due to the crackdowns in beijing. i think investors took this as a strong signal that he is out of the doghouse. shares are jumping up as much as 10%. matt: he seemed to be continuing to plead for forgiveness. he said he would dedicate himself to philanthropy and teaching. we did not see him at a live event. this is the first time we have seen him in months. it is only online. how concerned should investors
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still be that china will crackdown on alibaba and its empire? >> i think it is unclear what regulators are thinking in terms of next steps. the anti-monopoly regulators are still conducting an investigation into alibaba. i think we will be hearing from them very soon on what their decisions are. that ipo was derailed. they say it will be a while before they can resume anything. there's a lot of overhauling that needs to be done with that company. anna: thank you very much. jack ma makes the first appearance since november. italy's premier battles on. living to see another day in
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power. this is bloomberg.
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♪ matt: welcome back. this is the european open. we are 17 minutes away from the start of cash trading. take a look at the u.s. dollar falling a little bit. as euro stocks and nasdaq futures rise. it looks to be a fairly risk on wednesday. we have made it this far. the future depends on post-brexit supply issues. he is happy with the brexit deal. the company will keep logistics under review. >> we are pleased with the brexit deal. it has been a dramatic deal.
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but we are pleased with it. we are assessing two different times. the first time is up to 2023. we understand that all of this is about sourcing parts from inside the u.k. and european union. we are strong and that kind of situation. we have an integration strategy. it is powerful. we will engineer and manufacturer electric motors. and battery cells. it is very powerful. we can source a lot of components from the territory which is the european union.
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we are now in the process of calculating all of this to make sure it makes sense or not. at the end of the day, we will decide where to invest in the u.k. or in continental europe. any per accuracy that could slowed -- bureaucracy that could slow down our logistics. that will be decided in the next few weeks. so far what we see is reasonably positive. we would like to keep our u.k. friends in our family. >> are you in favor of possible further investment? >> we have not come through yet. >> on china, china has been
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pointed out as really in need of a new strategy. have you provided some details on what is your thoughts? new brands in what is the world's biggest market? >> we need to take care of the current situation in china. the good name is we can now share the diagnosis. for these challenges. we expect specific to share the diagnosis.
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we will rebuild our strategy in china. if need be, we have a different course of action. in the course of 2021. this will be a new strategy for china. it can be based on the assessments. we don't exclude anything from there. we need to find what the best way is. matt: that was the ceo. of the company with the new name for fiat chrysler. i want to quickly give you headlines on german chemical companies. basf has put out fourth-quarter
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adjusted earnings. the full year adjusted numbers, 3.6 5 billion euros. they say that is above their forecast. that is a stock you can watch at the open. i believe it is important to give our viewers a quick public service announcement. surgical masks, there is a metal bar. usually a strip. that you can bend in order to hold it on your news. the mask has to cover your nose and your mouth. anna: he seems to be wrestling with his.
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let's turn to italian politics. and i just where we are. giuseppe conte has survived. but failed to get an outright majority. how strong is this government? >> if you look at the votes from yesterday's session in the senate, which was wild, all kinds of things happen. two party officials decided they wanted to vote in favor of giuseppe conte. it was real italian drama in the senate. the numbers were very tight. the numbers are very clear. giuseppe conte has lost his overall majority. he says the focus will now be on
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strengthening that majority. that would be the third and almost two years. you are looking at a situation in which the government crisis that darted a week ago is officially over. you are looking at a government that does not have a sustainable majority. they look very weak and unstable. matt: i want to quickly bring you a headline from the eu. he is proposing a stronger pact to president biden. how quickly do you think we will see this relationship amended? >> it is a good question. it will be interesting to see what he means by that. there is no secret that european officials are relieved that
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president trump will not be back. what makes them relax now is that politics by tariffs and tweets will probably be over when biden steps in. we will see more traditional leadership. this is something that comes up every day. europe says they want to push forward with their strategic economy. they say they do not have to follow u.s. politics. it will be interesting to see what it takes. to see how the two focus on china. this investment deal really raised eyebrows. anna: we are looking at live pictures.
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they are discussing the biden presidency. they say they hope there is a peaceful transition. ursula von der leyen going on to say she is ready for a new start in u.s. relations. we have not really worked out what that means for europe-china relations. thank you very much. we look at stocks such as burberry. more on that, next. this is bloomberg. ♪
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♪ matt: welcome back to the european open. just five minutes to go.
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barry will be a hot stock to watch today. >> it certainly will. it has not been doing well. still falling more than estimated. the concern here is that with so many stores closed and tourism put on hold, you will not get a lot of people dying are very items. the in-store experience is so key. they have seen the chip boone continue -- boom continue. u.s. and china tensions have done little to disrupt strong demands. this is a stock that has done very well. china sales were extremely strong. they jumped 80%. matt: thank you very much. the latest stocks to watch.
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before the start of the european trading session. futures are pushing modestly to the upside. european futures also point higher.
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anna: welcome back to the european market open. a minute to go to the start of cash equity trading. inauguration day. a new era begins. the italian prime minister working to build support after falling short of a majority in a crucial bow. locked down for longer. germany reports the highest number of daily deaths since the pandemic began. matt: let's take a look at the
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futures. futures pushing higher here in europe. it looks like we will be risky on this morning. you don't see incredibly substantial numbers here. you do see other indicators. let's take a look at european markets as they open up live. this is the global macro movers screen. this is the equity index. we need to change that. we have to talk to the programmers who get this. as they open up live, that will populate. this was a genius move. this screen. i absolutely love using it.
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opening up a quarter of a percent. gaining 3/10 of 1%. the ftse, little has changed. at least in positive territory. investors are a little more optimistic on joe biden's inauguration day. he will become the 46 the u.s. president just hours from now. the swearing-in ceremony will be unlike any other in american history. taking place against the backdrop of a raging pandemic and profound political divisions across the country. the streets of washington dc have been sealed off. concrete slabs are blocking the central area due to fears of a potential attack from armed american people. joining us now is stephanie baker. even saying that out loud, it sounds so strange. and frankly a little bit scary.
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what should we expect from today's inauguration? >> it is quite extraordinary. it will be a peaceful transfer of power but it will not feel or look like it given the heavy military presence in washington. and the fact that trump will be the first president in 150 years to not attend the inauguration. it will be a much smaller affair then inauguration's in the past. but it will be a much more star-studded affair than trump's administration. there will be no inaugural ball or parade. there will be a virtual parade featuring earth wind and fire. and a evening celebration hosted
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by tom hanks. this will be about healing. that is something he touched on in his memorial address last night. that will be the ongoing theme of the day. anna: we will witness a very different ceremony. are fewer people. certainly some celebrities. what about the first days in office. >> he is expected to issue a raft of executive orders, including joining the paris climate accord. resending the muslim travel ban. he plans to issue a mask mandate on federal property.
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other things that are within his power to do. extending restrictions on home evictions and foreclosures. continuing a pause on student loans. and of course the stimulus package. which we saw yesterday. janet yellen highlighting the need for big action to respond to the pandemic. he pushed -- she pushed back against republican senators who questioned her about this happening. saying the country needs a strong stimulus package to get the economy moving again. matt: this morning, trump pardoned over 70 individuals. this is not unusual. there are often controversial figures.
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marc rich was pardoned by bill clinton. what i find more fascinating is an executive order by the resident who pledged to drain the swamp that allows his political appointees to lobby immediately starting today at noon. what kind of change is this for the trump administration? >> that was extraordinary that he did that. after pardoning more than 70 people. any of them close associates who had been indicted and charged and convicted with active corruption. steve bannon was on the list. he had pleaded guilty to using money he had raised from trump supporters for building a wall and using some of that money for
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his own personal expenses. the revoking of this ethics order by trump, freeing aides to lobby, it was quite extraordinary. it really was the ultimate final act of the trump administration. it was as swampy as any administration in memory. anna: thank you very much. good to speak to you this morning. we look forward to our coverage of the inauguration. joining us with a look ahead of what we can expect. let's get a market perspective. very good to speak to you this morning. we look ahead to the inauguration. we anticipate a stimulus package. we heard that from janet yellen yesterday.
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>> we expect a lot from this administration. we are looking at a rescue package. we would expect a massive boost to the u.s. economy. probably more small caps. to invest again in the u.s. that would be a major opportunity for u.s. small-cap. matt: have we not seen small-cap prices run too far, too fast.
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>> i think you're entirely right. i think it is cheap these days. we have seen this in europe as well. they perform quite well. we already have a lot of forward guidance from central banking.
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this can be the difference. this is definitely an opportunity for us. there is a lot of expectation. this has implications far beyond the u.s.. anna: are you nervous about that levels in the united states? we had janet yellen being asked about this yesterday.
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she pointed to a drop in debt servicing. . . because of low interest rates. outlining where we sell trump tax cuts taking effect. instead of the pandemic fight, we have seen low interest rates. those that mean the u.s. can afford that? >> we should all be concerned by debt levels. and make sure it remains manageable. the central bank has engineered low debt servicing. it is sustainable at the moment. we will likely have a new package for stimulus.
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we could see more debt as we going to 2021 and beyond. we need to distinguish between what i would call bad and good debt. if we invest in future growth. i am quite enthusiastic about the climate agenda of joe biden. it can help to repay the debt automatically. clearly the hope that we have is that we have to fill that gap left by the pandemic. that debt which would be created could be invested wisely. in the meantime, with the forward guidance from central banks, it should remain low for the foreseeable future.
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if the long term evolution of debt to gdp in the u.s. will improve. and the 10 year yield in the u.s.. we are in a very similar environment from a debt to gdp environment. we need to hope that this will be repeated against. matt: we will take a quick break and come back with more. the jp morgan global market strategist. locked for longer. angela merkel tightens covid restrictions as germany reports the highest number of daily deaths since the pandemic began. this is bloomberg.
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anna: welcome back to the european market open. it is inauguration day. that is where the attention of many will be as we go through today's session. we see the ftse 100 down. u.s. futures pushed to the
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upside, in particular on nasdaq. let's get a business flash the other corporate stories we are covering today. >> netflix has ended its biggest ever year with a bang, adding more subscribers than expected. saying it no longer needs to borrow money to expand. he got eight -- it got 8.5 million new customers in the final quarter. it was helped by new shows. bob iger saw his pay slump more than 50% last year to $21 million. they have been hard-hit by the covid-19 pandemic. some bonuses were scrapped and executive pay was reined in. they have beat expectations for this quarter.
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they make machines used to build semiconductors. there crucial supplier. it has mostly been insulated from the epidemic downturn. matt: thank you very much. angela merkel has extended and tightened coronavirus restrictions. the rules include closing non-essential stores and restricting movement in certain areas. it will run until february 14. that comes after germany reported its highest daily death toll since the pandemic began. our guest is still here with us. what does that mean for the european economy, not just this lockdown extension but these lockdowns that are causing small
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and medium-size businesses to declare bankruptcy? how can a stimulus injection possibly help and economy that damaged recover? >> there will be casualties. a policymaker did a great job in 2020 employing monetary stimulus and fiscal stimulus. to avoid a wave of bankruptcies. the more damage will be there over time. we need to rub out these
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vaccines fast. that is why it will be important. why we have struggled in the beginning with these vaccination campaigns. i see improvement. in france we were really lagging in the beginning. we are catching up. we continue to look at improvement for the second part of the year. we have new measures recently. anna: you certainly see that in some of the high-frequency data and some of the economies. let me ask you about opportunity for investments in europe. do you expect them to play that card?
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maybe legacy. where do you invest? >> thank you for linking the text theme with consumer cyclical. it is approaching this in europe. you see in many countries a huge move that is boosted by environmental regulations. it is not going to be away for them to get better. but it will definitely be a theme where we pay attention as an investor.
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we just discussed the arrival of joe biden in the u.s.. we will not forget the boost in europe. i would expect those sectors that are supposed to be that way to be quite well. climate change for us is a big theme globally. europe was positioned to lead. we invest a lot in these areas. we have adjusted or reduced our carbon intensity. that bodes well for the future. we continue to keep this position. we believe there will be some catch-up in consumer cyclicals. matt: thanks so much for joining us. we appreciate getting your insights this morning.
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the global market strategist for jp morgan. he will be continuing the conversation on bloomberg radio at 9:00 a.m. u.k. time. coming up, netflix surges as much as 13% after it shows and positive free cash flow encourage investors. this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.
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anna: welcome back to the european market open. 24 minutes into the session. nasdaq futures getting a lift. let's focus on netflix. it ended its biggest year in company history with a bang. they soared in late trading. after reporting a surge in new customers. they cannot all have been watching it. >> a lot of people have to admit. i was included in that. these numbers are new because of these new shows. people who wanted to sign up and watch them. we did get a lot of new viewers at the start of 2020. we were concerned we wouldn't get a pickup at the end of the year.
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8.5 million subscribers added, beating expectations. the other big take away is netflixes not need to rely on its debt to fuel growth. we are seeing more positive cash flow. analysts worried that the debt burden was a looming disaster. but we bounced back from that. for 2021, netflix says it will have a positive cash flow. there is talk of putting a buy back into place for the first time. matt: thank you very much. dani burger talking to us about netflix and the positive cash flow. that has created some positive buzz around the stock. some real buying and pushing the stock up 18%.
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the end of an era. the london metals exchange talks about permanently closing its iconic trading floor. this is bloomberg. ♪
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matt: welcome back to bloomberg markets. 30 minutes into the session. let's take a look at how stocks are acting in which sectors are on the move. here you can see that stoxx 600 gaining while the ftse falls. the dax and the cac also drop. in terms of the sectors on the move, you have to pull up the group, rank, returns screen. there it is.
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the gainers, tech stocks. asml, basic resources stocks, they are pretty big heavy weights on the ftse and they are gaining today, as well as automakers and auto parts makers, plus consumer products. in terms of the losers, utilities are falling this morning. you have also got, there is another new one, food beverage and toast. and then, p bgs, they regained the stoxx 600 groups. some of these acronyms, pcb and gs. seems like too many letters for us to understand what it is. we had to dig into the bloomberg
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to get that. it is pretty easy, to be us with you. i can get -- >> i can guarantee that the t is not toast. matt: it is personal-care and grocery stores. >> not a lot of specific stocks. let's get an update. laura: inauguration day in the united states. president trump will skip the ceremony, but is wishing that administration good luck. washington is on high alert after the attack on the capital two weeks ago. the top republican in the senate puts the blame squarely on trump start. -- squarely on trump's door. >> we had just reclaimed the capital from violent criminals who strive to stop congress.
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they were provoked by the president and other powerful people. laura: germany is extending its lockdown. non-essential stores will stay closed until february 14. it stopped short of a national curfew like france. angela merkel is warning it may need border control. prime minister has survived crucial votes, 12 short of an outright majority. he campaigns to get lawmakers on the side, sales have plug the gap. he will need an outright majority if he wants to stay in power longer-term. global news, 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. anna: with their first word news
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update. coming up, we will bring you live coverage of joe biden swearing in. our coverage starts at 11:00 a.m. the actual ceremony and hour later. join us for the preamble, the buildup. all eyes will no doubt of the be on washington. -- will undoubtedly be on washington. this is bloomberg. ♪ s bloomberg. ♪
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matt: welcome back to bloomberg markets. this is the european open. we are 37 minutes in. stocks are graining across europe -- gaining across europe. the dax is up .3%. in the u.s., joe biden arrived at the capitol yesterday ahead of his inauguration today. it is expected to be a ceremony unlike any other that has come before in american history. eu leaders have called for a reset on u.s. relations. joining us now is peter beyer, transatlantic court nader. thank you for your time. i am wondering, as trump was
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doing the things he did, a lot of people thought, those will be undone with the next administration. did he start some balls rolling it cannot be stopped? peter: certainly. there are some topics that will remain in place. everything that has to do with trade, definitely defense spending. anna: you mentioned nord stream 2, i want to ask you about that. democrats also raise concerns about that. do you expect the project will strain relations between germany and the u.s.? peter: i think it will stay in place as a topic, but the payoff several years was agitated, overloaded from its priority. my expectancy is that it will go where it should be.
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it belongs on the transatlantic negotiating table. there are many more, much more important topics. we need to talk about that. matt: i can understand, maybe this is the american in me, the concern. you have the german government backing a pipeline that is going to effectively ship billions of euros, dollars, rubles, depending on how you want to look at it, to putin. and maybe he is using that money to do things like annexing, or sending buses full of riot police to arrest alexi, how can the german government justify funding his exploits? peter: there are certainly some communication that could have
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been improved, mistakes have been made. the pipeline has almost been completed. several marks on wall street to o. over 100 private companies throughout the european union are affected by the sanction threats. the reason why that started to be built at all, at the beginning, we need to look at diversification when it comes to energy security. the sources in the north sea, and the netherlands are drying out. the netherlands have stopped exploiting their gas volumes, sources. we need to look around. what -- was it the best idea to take russian gas? i don't know.
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also making up point that we will look to the circumstances in regard to labor protection and environmental protection under which circumstances this gas is being exploited in russia. it is in transparent in russia and that is something that we have a look at and i will ask that -- that is one of the reasons why a condition of our decision on if there will be gas flowing through the pipeline. anna: interesting to think about that. another point could be relationships between europe and china. i wonder how you see europe having to make decisions around china here? the u.s. has provided security in the past two europe, but that has not something that has been assumed always under president trump. china is going to be perhaps the largest economy in the world, do
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you think that europe will have to choose between the u.s. and china? peter: no. i don't see us in a situation where we have to make that decision. u.s., yes or no and china, yes or no. i think we will see a lot of folks, including the president, the secretary of state, many others in the national security council, which have a much better understanding than the trump administration of europe, the complexities of the interests. i think we will see a lot of common interests when we look towards china. there is a lot of potential for we could do a joint strategy towards china, but also the truth is it is a huge market. there are a lot of german investments in trade with china that will not go away. my personal standpoint, one of trump's critical infrastructures, we should not allow the chinese folks to get involved in our bg
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communications. we have jointly made clear public statements that we cannot allow human rights violations, we cannot allow ip theft, and when it comes to trade and reform of trade organization, consequences have to be faced when there is a violation. that is something for we need to do something together, european union with american friends. matt: donald also pushed for the germans to finally meet their commitments when it comes to defense spending. that still did not happen during the years of his presidency, but it seems as if germany realized maybe this country wants to, or needs to, start to think more about dealing with its own defense.
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do you think that will be a priority, even under the next government? peter: yes, it has to be. we have made our commitment, we signed the defense pledge in 2015. we started sluggishly, but 2, 3 years ago we try to increase by 45% compared to 2014. we started late, but we started, we did a lot, but it is not enough. a clear commitment from my part, the german government, towards the 2% goal. it is necessary, it is in our own interests, we made that pledge. germany needs and wants to be a reliable ally for the other ally countries. that is important. anna: thank you very much.
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peter beyer, the transatlantic court nader. thank you for bringing us your perspective. proposing closing its trading for permanently. putting an end to the sentry old practice of setting metal prices and a daily shouting match, the iconic trading floor is one of the last of its kind. in a world where deals take place face to pace -- face-to-face, a gesture. dani burger is here with a guest on the subject. dani: it is certainly iconic images. joining us today is matthew chamberlain, the metals exchange co. last time we talk, it was the height of the pandemic, late may, june. back then you said you wanted to reopen the venue as soon as we did not have social distancing period you are optimistic about the idea of "the ring,"
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reopening. what happened that you decided to close it permanently? matthew: i think it is important to emphasize that we are still very happy to reopen the ring if the pandemic situation is able to be resolved in the next few months. in no way does putting out a discussion paper yesterday undermined that commitment. as it is healthy and safe for our dealers and society to get back into the ring, we are happy to do it we have our team keeping the ring ready to reopen. at the same time, this period of electronic, which has been forced upon us means that we have failed to collect 10 months of data on electronic pricing. we think that that data has been really successful, we felt it
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has been the right thing to do. to put out a paper and say, here is what we think, now let's have a conversation with our market about the longer term. dani: what is that threshold where you say, it has been closed a number of months, let's move to electronic trading? matthew: we are going to be collecting feedback until the end of march. i imagine that we and our board will make the decision, the final decision, in april. it is possible, if the vaccination programs go well, that we will be able to reopen before april. come april, we will be in a position to give our view on the long-term future of the ring. at that point, if we decide the ring is going to close, then we probably would not reopen it. that is the timing we are looking at. dani: what are some of the growing pains you have
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experience at the time it has been all electronic trading? i think we have something showing the following that the ring has close. are you going to get more traditional traders who will not be willing to make that switch to electronic? matthew: that is a question we have spent a lot of time thinking about. clearly, lester was exceptional -- last year was exceptional. the global markets awesome risk of reductive volumes. we do not think that the volume for -- is proven by the ring. to some effect, but we think it was a broader macro story. on the flipside, we feel that moving towards electronic could bring a new cast of trading participants who may be more willing to trade on electronic mechanisms. we accept that at the margin, there are some traits that we
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lose by not having the ring, but by being able to give certainty on our future direction, if we do move to electronic as we proposed, we can then ring in some new participants who would more than make up that volume. dani: when we talk about new participants, i am curious about diversity as well. when he think about the ring, you think about loud traders, predominantly male driven industry. if you go fully electronic, from now into the future, could that promote diversity of traders as well? matthew: it is certainly a key priority. i would mentioned that we have been working very closely with our ring dealers over the past years to enhance inclusivity, diversity. we came out with our code of conduct which i think was a big step forward in making everybody feel welcome on the floor. i want to emphasize that our proposal has nothing to do with
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the sense that the ring is bad, or a cannot embrace diversity. i believe that it can. i do agree that moving to an electronic model does bring in a broader set of traders in more diverse, gendered characteristics, national characteristics as well. that's could be a positive additional benefit to what we are proposing. dani: i'm afraid we are going to have to leave it there. matthew chamberlain ceo london metal exchange. the ring, certainly iconic. bright red telephones and has been around for 140 years. anna: i love the imagery. thank you very much. thank you for bringing that conversation and we will see whether that open outcry manages to survive the or not. coming up, how would the dollar trade?
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and, janet yellen as treasury secretary, we put that question up next. this is bloomberg. ♪
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matt: welcome back to bloomberg markets, this is the european open. 54 minutes in. see the red arrows. broader european benchmark now
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gaining .6%. joining us leads our market life team. let's talk about what people are expecting from the inauguration. it is an exciting event. it looks like we have a risk on wednesday. is this all about the stimulus? >> it plays well. [inaudible] matt: i am going to say that we need to do some infrastructure spending in the u.k.? anna: another issue where the phone line is letting us down. matt: it sounds like -- either it is down or she did not want to answer my question and she is faking it.
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anna: i get a sense. matt: in any case -- as we read out, we can take another look at the markets. not just the equity picture, yields rising, i looks like investors are comfortable enough to let go of u.s. debts. the dollar continues to fall, the dollar index is down. economic gains, economic gain expectations pushing things up like oil. anna: it does seem interesting the way we seem to be trading a number of things. inflation trade, and you are asking about whether we are going to see reflation trade,
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stimulus being the order of the day. is that what is pushing it up higher? and that could be blamed for the oil prices as well. but you don't see all that trade playing out. we have the dollar moving down. we have fixed income looking more mixed. there has been a link between higher bond yields and that fiscal spending on other days where we have been talking about inflation period inauguration day. matt: it is inauguration day and i am excited to talk more about the global market strategist at j.p. morgan. we have him on our radio program which is coming up in just three minutes time. viewers can become listeners. if they like. they can't really even see us, we are covered by yields here. if you want to listen to the radio program, you can tune in to the city of london, or anywhere in the world google and
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click on listen live. anna: this is tv. matt: if you do want to watch tv, watch francine lacqua. ♪
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francine: a new dawn in america. joe biden becomes the 46th president today. trump issues pardons, but none for himself. and shares surge. good morning, everyone.


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