that. what i was told, i am not certain. i was told there are possibilities within the existing law to have the justice department see if there are things that can be done that can limit the independent action of individuals in enforcing a state law. i can't give you an answer yet. i have asked for that to be checked. thank you kaley: he will be traveling to louisiana to see the devastation from hurricane ida. the president addressed the disappointing jobs report. the president placed blame on the ultimate variant as to why the report wasn't stronger. he talked about the confidence americans have.

the president placed lame on the altar variant as to why the report wasn't stronger. 72% of them believe in their ability to get a quality job. businesses were going to have to offer higher wages and other benefits. >> hiring is very important. people make all the difference. job creation is important. we need people that can continue to drive business forward. businesses have been very resilient, whether it's covid related, the supply chain constraints.

they are remaining resilient and continuing to move forward in spite of the bad news we have heard today. guy: the survey recently suggested just over 40% of small businesses are raising wages to deal with supply shortages of labor. how much more capacity is there to continue to raise wages to attract people? this strikes me as an impediment for those businesses. sharon: it is a concern. we sought today as well. you can see that wages have increased. it is about attracting the right skilled labor. there is also technology that has come about in the pandemic. we have seen the emergent of -- emergence broadening the reach of small businesses across the country.

there is pressure on wages. there is competition for talent. that has not just been this year. this has been a theme we have seen over the past few years. how to get the right skilled labor. how to get the right person in that job would you have a small business. kaley: existing businesses are one thing. when it comes to business formation, that has been quite strong. are you seeing any of that slowing down? sharon: we have not. we have seen business formation very strong. whenever you come out of the issues in the economy, you do see innovation. as well as new business starts.

take a look at consumer spending. i would tell you that spending by the consumer is up 20%. as you think about what fuels business and our economy, it is consumer spending. that is a good sign going forward. guy: what is your expectation for what happens in the fall. the president is referencing an impact on this report. there are many that are concerned we are going to see a pickup in the number of cases as we enter winter. how robust are small companies ahead of that? sharon: we continue the monitor that. when you look at the august jobs report, a lot expected a larger

number of jobs created. the delta variant was based into that. you do see the northeast was less impacted. this is something we are going to continue to monitor. the strength and the resiliency we have seen across business at large dealing with these issues, what we've seen is resilience and continued strength and spending. when you think about four months ago, unemployment was 6.2%. today, it is 5.2%. we have seen it decrease in unemployment. the unemployment and if it's are ending next week. i think people going back to school, people will be out in the labor force.

guy: thanks for sticking with us. we appreciate your time and insight as to what is happening. sharon miller, rightly appreciate it. let's check where markets it right now. you are getting and underperformance out of european equities despite the fact that the mess when it comes to payroll was generated out of the united states. the stoxx 600 is down by 0.5%. as the number came out, it faded before spiking back up again. we are just shy of that. it's a little bit of dollar weakness. kaley: that is not so much euro strength. there is a pretty red day as well. only one sector is the in the green. that is technology. it is a risk off tilt.

still, that disappointing jobs number is a bad news story. as the market tries to assess what that means for the timing of the fed tapering it. it is up around 111 basis points. gold is worthy of noting. the spot of 1.2% as we see that haven bid. guy: let's carry on the conversation in the markets and get a take on where we go from here. matthew the strategist joins us. thank you very much indeed for your time. we are getting and underperformance out of europe. some of that may be down to what's happening in china. it's interesting, technology is outperforming. if we are going to see the date it rolling off a little bit, is

that an argument for buying u.s. tech? matthew absolutely. it is an argument on a tactical basis that favors the u.s. market. it is an argument for within the european market to favor across the board. kaley: as we move forward, do you expect the market to have a cyclical tilt? matthew: for the remainder of the year, our expectation is the markets will remain volatile. first of all, the chinese authorities are tightening on the regulatory. the reality is it is still

consistent with the deterioration. this results in that start. this is a bias we hold in our portfolio for the time being. guy: the fed taper is going to be a factor. if it gets pushed to year end, does that change your calculation around where the markets are going, in the states or here in europe? it implies we will see liquidity being poured into that market. the obvious reaction to that is buying stocks. matthew: the outlook for stocks is still positive. even if the fed tapered, there would be plenty in the market. it comes to changing the timing

of the taper from september to the end of the year, it's very marginal. what is more important is the outlook for rates. it is interesting to see they have risen despite the work. the markets seem to be saying -- seeing more inflation in the near term. that means shorts rates have declined. kaley: they are up three basis points today. we are still at 1.32%. that is more than 40 basis points south of the high we saw. is the bond market sending a clear signal? matthew: it is starting to take place. whether it's in the united states or europe or china, they are now below zero. the bond market was ahead of its

time. it was right. we need to look beyond the next month. it can be difficult in terms of volatility. beyond this volatility, we should see more economic activity year when it comes to capex and so on. we would use this to ultimately build a more bullish long-term portfolio. guy: we are going to see the dax today. we will see it expanded and more growth. it's going to be less defensive. how does that change the calculation if you favor europe

over the united states? matthew: it's marginal to be honest. at the end of the day, when we look at the difference between europe and the united states, it is related to sectors. the u.s. is overweight. overweight financials in the industry. it won't change that meaningfully. at the end of the day, what is crucial for europe are two factors. we anticipate that next year toward the end of this year, it will rise. also, the fact that despite the activities that will take place at the end of this year, growth will accelerate next year.

this acceleration will lift those old-school cyclicals versus the health care. kaley: we have to leave it there. thank you so much for your time today. common up, the saga continues. beijing taking a writing share company under state control. we will break down what is going on and get the latest next. this is bloomberg. ♪

guy: the payroll story is front

and center. there is big news, a week of big news from china. beijing proposing an investment in the state run firms controlling the largest ride-hailing company. joining us is bloomberg intelligence. as kaley said it, this just list of the couple of months ago. what will investors make of this news? damien: the company left 33% of its market. the reality is beijing will get some control should this go through. they've got minority shareholders from softbank and uber. they are not going to be big fans of this. many are calling this and into the regulatory uncertainty since the ipo.

they have to deal with the privacy. there is still a lot of uncertainty. i think the shares will drop 7%. they are up only 3%. we see a little of that. kaley: just the latest on this ever increasing saga. another business trying to navigate china is the first broadcast interview. the chief executive officer of the bank spoke to francine. >> we've been around for 156 years. we have faced political tensions. let's be honest. if you want to be an international bank, it can be difficult. i'm not going to deny that. our clients tell us they want us to invest their savings.

the demand we have seen over the past crisis, ike the one we just faced, the demand still exists. >> are authorities asking you to choose? >> no. we have to comply with the laws. that's a complex task. i'm not going to pretend it's easy. no one is asking us to choose. we have announced the commitment. the plan is to hire 3000 extra wealth managers. we have already hired 600 of those in the first nine months of the program. we are on track for our target for hiring this year. >> talk to me about hong kong

and the sanctions. if it comes through, what does it mean for the financial sector? >> one of the jobs of an international bank is to comply with complex laws and sanctions. that complexity has increased. we will navigate that as we have done so far. you have to stay close. you have to stay close with your regulators. you have to navigate those complexities. it is a complex situation at the moment. guy: speaking exclusively to francine, she joins us now. he wants to keep a foot in both camps. he wants to focus on china. he is in london. how sustainable is this? francine: he believes that

sustainable. at the end of the date, they are trying to serve clients. they make almost two thirds in asia. my focus lies in asia. what do i need to do to make sure i am favored there. you and i know he has moved a lot of his executives to china. how long is this sustainable? it's very clear in the interview. he is still betting big on china. they want billionaires and millionaires. they want a growing class. people with the crackdown, it will grow significantly in

china. kaley: thank you so much for that wonderful exclusive interview. this is bloomberg. ♪

guy: the weather here in europe is still pretty warm. it soon, it will get cold. we have seen a huge spike in european natural gas prices. what comes next? do they stay this elevated or do we see the russians provide a great deal of gas this winter? she leads team coverage of gas and power here in your. it's great to see you. we've been tracking as the prices go up and up. my question is, these elevated prices, are they sustainable?

we are going to see household bills going to the roof. >> it's all about russian supply. at the moment, we are going to have high prices in the winter. we have seen the russians called back gas. they have to fill their own stores. if things stay as they are, we could see higher prices. there is always an element of surprise. i think with outages in the north sea, a lot of the operators were not able to carry out the maintenance they had to during covid. we have had a lot of covid restrictions. a lot of the operators are taking the time and doing maintenance now. it is all piling up. guy: isn't this what nord stream

2 was built to do. after all of the push back the pipeline, they can say you need this. isis: they think the russians have been holding back gas to pressure europe. it's been ashore's of tensions for quite a while. some people do believe that. there is the element that russia doesn't have gas in its own storage like previous years. one could look at it from that point of view. kaley: if america put out a note on this crisis, does that seem right to you? isis: it could really happen. they have said they could send

5.6 billion cubic meters this year. that is interesting, it's not a lot. if it stays the way it is, it could be. coal prices are high. demand is coming back over the world as the economies reopened and people come back to the office. it is possible. i would not rule it out. guy: we will be tracking with a great deal of interest. equity markets are down. we see the ibex under the most pressure. airbus is certainly feeling the pressure today. we will go into the details in just a moment. the closes next. this is bloomberg. ♪

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guy: we are wrapping up the week in europe.

generally negative as you can see across most of europe. the defensive nature, the cyclical nature of the european markets not coming to the fore today. as you can see the cac 40 is down over 1% today. the ftse 100 is down .3%. the cac 40 stands out, as does the ibex. luxury names down. i think that is more to do with china and the pushback we are seeing against the media sector. that is reverberating quite quickly into the luxury names, the names like lvmh. airbus is under pressure which is interesting. you can see the hit we got from the payrolls number. we are still in the 470, 480 range. yesterday dropping down into the

bottom of that range. down .5%. it feels like we are drifting into the weekend. it is a long weekend in the united states. light volume is a factor today and we will see that monday. 1.1879 is where we sit with euro-dollar. we did get through 1.19 and then we faded that move. the bond markets on both sides of the atlantic are interesting. more so in the united states. a steepening of the curve. the easy be next week is something to look forward to. we are also seeing crude come back down to about flat. the commodity story continues to be important. we continue to watch what is happening. we saw a big move higher in crude yesterday. fading that the touch today. we see the opec story out of the market. basic resources back on top.

the bottom end of the market is where the luxury sector is, down 1.32%. construction, retail, travel and leisure all tracking lower. it is a negative story and one to some extent reflected on both sides of the atlantic. europe is little more exposed to the china narrative and that is a reality why we are seeing the underperformance. let's talk about the dax. the dax is a different index. you have to think about that when you compare it to other indices. from 1987 until now, it looks impressive. less impressive than the united states. u.s. markets simply because one sector largely, that is the technology sector. europe does not have much of that. today we are going to see the rebalancing of the dax which could pull in some of that

growth and make it less cyclical. they will expand the dax to 14 and pool in some of those names. at the margin it may give europe an opportunity to talk about growth. we will see what happens later on. we will get the announcement later this evening. the performance looks good. tech has been the dividing line between the united states and europe. kailey: let's get more insight into that rebalancing. we are joined by bloomberg's jp barnett. talking about the growth we could see in the dax. what name specifically will bring that? jp: there are a couple of them. two i like our technology stocks and that we have food delivery stocks. we also have different kind of technology companies coming in and the server -- in the form of siemens health. technology and health care equipment.

that is something that could enrich the index which in germany's very industrial heavy with big companies like siemens and also focused on daimler and bmw. the changes they are introducing now, i would not say it is a total game changer but it is certainly a nice labor and adds a different dna to the index. guy: germany has struggled to digitize its economy. the objective here is to give the impression that the german corporate sector is may be more growthier then it has been in the past. is that a reflection of what is happening in germany right now? jp: of course when you have a country like germany with lots of heavy industrial companies come the growth will always be lower than the normal growth

stocks that are infinitely scaled over the net and have it much easier to go global than if you want to open a new client for building a new car somewhere else. i think germany has huge potential in a different way on technology. i just mentioned this one area where companies could make much more use of technologies within production chains and how the country is run on those heavy industries. guy: we look forward to the coverage later on when we start to get the details. bloomberg's jp barnett joining us in our view on the dax. we are through the auction. not much action. these are the final numbers. as we headed to break, largely negative. underperformance from the cac 40. we also sought with the spanish market. we will take you to italy next,

to the shores of lake cuomo. the forum is underway. we will speak to the ceo of the company now called leonardo, one of bloomberg's biggest defense companies. look at that view. kailey: beautiful. guy: that is the place to have a gathering. a lovely place to be. i was there once. what a fantastic weekend. will be there shortly. this is bloomberg. ♪

ritika: this is european close. you're looking at a live shot of the principal room. coming up from the president and ceo of hewlett-packard. this is bloomberg. guy: we need to take you to lake como.

italy's largest aerospace company leonardo is trying to carve out a bigger role in the european defense industry as part of a long-term strategy. let's talk to its ceo, a la santo perform out -- a la santo pro forma -- alessandro proformo. companies are struggling to find the necessary people at the necessary material. we have heard so much about the necessary material. how is your business doing? alessandro: our business is doing quite well. luckily enough for us we are relatively small. it is more part of our production so we can cover our needs quite well in any case.

we have the lucky nest of being paid in different places, both in the u.k. and the u.s.. we are attracting the best competencies from the different cities. we are manageable in the proper way. kailey: that is on the supply side in terms of inputs and people. how does demand affect the business? alessandro: demand on the defense and governmental side is really good. you know we work on multiyear programs so we are continuously growing in helicopters and aircraft. we have a weak area which is arrow structure where we can use

fuselage wings for civilian aircraft. there the demand is low. it is different on a long-range program like the 787 because the way of traveling is differentiated significantly. region is recovering very rapidly as well as the single aircraft. the supplier for airbus is different for the longer distance. guy: you think the chaos we have seen in afghanistan will change the way europe thinks about its defense spending? you think there'll be a long-lasting effect with respect to your business? alessandro: for sure. there is a very significant debate on the european defense in terms of procurement and real

operational capabilities. i am sure there will be a growth in terms of spending. it is important for a coordination between the nato system and the structure is an important event for the european defense fund. kailey: when it comes to united states, you have exposure through europe. do you think there is any risk of reduced united states defense spending for afghanistan down the road? alessandro: you remember in february we were in the process of -- at the time the market was worried on the defense budget. then the first defense budget of the pandemic, which came out with a small growth. there would be relative

stability. i do not think there will be a cut. guy: in terms of what is happening with the rs, as you say you postponed the ipo, where are we in the process? was there concern about valuation? do think that has been corrected. give us a timeline on how the process will work. alessandro: clearly it is not easy to foresee the markets. what we are seeing as there are different elements. in february there were three worries by the market. the first one was the defense budget. now it has stabilized. the second was inflation. inflation is still an issue for markets. the third main worry was materials capable to fill the promises.

now after two quarters we are seeing it performed very well, even better than expectations. i think today at least, two of the three worries we had in february are over,. -- are overcome. kailey: you said he would revisit an ipo when market conditions are more favorable. what would an appropriate valuation be? alessandro: the one we were revealing to the market during the roadshow. kailey: you need to make any revisions to that? alessandro: i think this is a right evaluation for the company . at the time it was difficult to achieve this target and i think today it could be feasible.

i am saying could be because no one of us knows what will happen to the market in the next weeks and months, but we are continuously monitoring the market in order to go live as soon as the condition would be the proper one. guy: we will look forward to that time. there's a lot of speculation about -- can you confirm that speculation? are talks underway? are you talking to them at the moment? alessandro: i am sorry but we are never commenting market voices. i cannot say anything on that. kailey: thank you so much for your time today from the beautiful lake cuomo. alessandro profumo, ceo of leonardo. thank you for your time. coming up, president biden says

we are still not where we need to be with the recovery. we will discuss that huge jobs miss with greg valliere. this is bloomberg. ♪

ritika: time to the bloomberg business flash. a look at some of the biggest business stories in the news. the faa has grounded virgin galactic's space plane while it investigates the flight that took richard branson into space. examining why the spaceship flew outside the area it was cleared to fly. virgin galactic says it is working closely with the faa. the hit making swedish group abba is reuniting, coming out with its first studio album in 40 years.

the album comes out november 5. that is your latest business flash. guy: thank you very much. kailey, abba was basically the soundtrack to me growing up. my mother listened to it in the car constantly on a cassette tape. gives you an indication how long ago this was. i think i have every song embedded into my mind word for word. kailey: i have to say i do not think i was yet alive when abba released their first album but i am a huge fan of mamma mia and therefore i know all of the songs. you can believe dancing queen was playing at my wedding because i do love to dance. i'm glad i will be alive for this one. guy: i think it will be fantastic. i know many in different generations are looking forward to it.

let, look pretty good as well. -- lake cuomo looked pre-good as well. i do not know how to translate from that to the jobs market. president biden says we are still not where we need to be. he spoke an hour ago on the jobs numbers. president biden: there's no question the delta variant is why today's jobs report is not stronger. i know people were looking for a higher number. next week i will lay out the next steps needed to combat the delta variant to address some of those fears and concerns. guy: greg valliere, ags investment chief policy strategist. does that number help or hurt the president? greg: it does not help him. he has bid in kind of a funk, and i think he and the markets were expecting 500,000 or 600,000 at a minimum. it does not help him. kailey: in the remarks the

president gave he used it to make his case to get his economic agenda through congress, saying it needs to be passed, saying higher taxes need to be put in place on the wealthy. it is looking like that is going to be more difficult, especially with joe manchin saying $3.5 trillion is too high a price tag. what is your base case? greg: that was a very distressing comment for the white house to have joe manchin say that. i do not think we will get anything close to $3.5 trillion. i am not sure we will get $2 trillion. that raises the big issue. good the progressives in the house say the hell with it? if you're going to pass a bill that is sliced back so dramatically we will not support anything. there is a scenario, not the best scenario, this entire thing will gridlock. the more likely scenario is we get the $1 trillion infrastructure bill, and then we

get something under $2 trillion in social spending. that is not a certain scenario. guy: the president emphasized in the back half of his comments that everybody needs to pay their fair share. he is pushing very hard on the narrative we could see tax rises. bloomberg breaking a story earlier on. what is your assessment? greg: if you want to go after wall street, be careful what you wish for. a lot of these proposals late to you guys at bloomberg are not that popular in the markets. more importantly, i do not think they can get the votes to make it out of the senate. kailey: the president has had a rough go of it lately. you have afghanistan, you have the delta variant. how much political capital does he have left to try to get his agenda done? greg: it is a big theme of mine.

i think political capital is crucial. you look at polls, there is a new poll showing biden in the low 40's. he has dropped 10 points in the last month. his political capital has been eroded. the main problem will be moderate democrats are going to distance themselves from him. they have to worry about the next election in november 2022. if he starts losing democrats, that makes it a lot tougher to get his agenda passed. guy: as of last week we are focusing on afghanistan and the terrible images on our screen. has the president put afghanistan behind him? greg: he would like to. at the same time i think he is not, i do not think you will ever fully recover from it. a lot of our allies, whether boris johnson or emmanuel macron have second thoughts about the u.s. because they got

blindsided. it was very poorly handled. i do not think he will ever fully recover. kailey: you mentioned why we were speaking in the break that the president has gotten a boost in terms of the abortion law in texas. can you explain how that could give a boost to the biden administration? greg: the law is so radical -- as well as a law that allows people to carry guns without a permit -- things in texas gives biden an opportunity and the democrats an opportunity to mobilize their base, which seems to be apathetic right now. the abortion issue is one where the democrats can get traction. at the very least, it allows biden to deemphasize afghanistan and gives him another issue. greg abbott give wrapped -- giftwrapped a gift for the white house and i think the white house will use the abortion

issue very aggressively. kailey: thank you so much for your insight. that is greg valliere, hef investments chief u.s. strategist. have a great labor day weekend. guy: you guys will be off monday. it will be a shortened week. a very busy week. one of the main events will be the ecb. we have a huge debate given the data we are seeing at the moment about whether or not we will see a taper at the ecb. that will be a factor you want to be watching out for. claims becomes more interesting. then we continue the countdown to the german election. that is starting to get more interesting. kailey: absolutely. this is bloomberg. ♪

>> from the world of politics to the world of business, this is "balance of power" with david westin.

♪ annmarie: from downtown washington two are tv and radio audiences worldwide, welcome to "balance of power>" i am annmarie hordern alongside joe mathieu in for david westin. what a friday it was. the analyst expectations were all over the place, but the jobs report even missed the lowest. joe: kind of the opposite of last month. the window was so wide it was hard to tell where the number was going to fall. everyone was talking about it a little bit. i was just talking with labor secretary marty walsh. this is a covid story. my worry is ida. the hurricane just blew through and cost anymore miss -- and caused an enormous amount of damage.