new york. labor day holiday in the united states. european equities at an index level on the front foot. volumes are incredibly light. becoming worse as the day has progressed. normally this is when we would see pickup from the united states. that is not happening with u.s. equity markets closed. post payrolls it is interesting equities on the front foot. commodities also fascinating. let's dig into the details. here is emma chandra. emma: we will cover the equity markets. looking at some of the major european indices. the stoxx 600 gaining .7%. technology stocks are doing heavy lifting followed closely by consumer stocks and it is also why we are seeing a nice

gain for the cac 40. earlier in the session again of almost 1%. luxury stocks doing well. wanted to mention the ftse 100. a nice gain as well. around .7%. some of the potential to cover targets are the biggest gainers. i wanted to dive deeper into that. i see some research from hsbc asset management put this chart together to show you how cheap the u.k. is compared to the other major markets. that valuation cap has been gaining and that is why we've been seeing the u.k. as a very attractive place for investors and those looking to take over companies. we are looking at the u.k., the third-largest takeover market this year just behind the u.s. and china. we will get a read later this week from the latest takeover

targets. that is morrison. i wanted to take a look at the movement in the supercar market. we see the gorgeous visuals from matt miller at the munich show. havoc putting in a solid session, gaining 1%. this is we are hearing mario draghi is in talks with the eu to shield supercar makers from the ban on combustion engines. you mentioned the other big story is in the commodities market. we have been talking about aluminum all day. big gains for aluminum. prices rising. this is due to the political unrest in guinea and the concern that is creating. very important raw material in the creation of aluminum. it is why we are seeing a solid gain of 3.3%.

and aluminum producer getting a boost. not so much a good day for iron ore, falling throughout the day. we are seeing more curves on steel output from china. guy: thank you very much, indeed. the big narrative today is still the payrolls report we saw friday. slowing significantly. the world's largest economy adding significantly fewer jobs than anticipated. what does that mean? the speculation is the fed's taper timeline is being pushed a little bit to the right. this is what some of our guests had to say on that subject. >> this was a materially lower number. >> is a weaker report. >> this had dealt a variant on it. >> there is one huge red flag for me in this payrolls report. >> the hospitality number. >> zero jobs in leisure and hospitality. >> you will get some bounce back

in september. the market is looking through this and saying this is temporary. >> tapering is on the table. >> the market is pushing back any sort of fed taper announcement to november, maybe december. >> they do not need to rush into it. the most important thing not to lose sight of is the emphasis tapering is not tightening. guy: ben emons joining us now. great to see you this labor day. is the message we should take away from friday's payroll report that the taper is being pushed to the right and as a result of which, by stocks? ben: it is. the message is the labor market is not in any disarray. the zero growth in leisure and hospitality was likely directly late to the delta variant and the fear of the delta variant and spending decisions and a lot

of people were sent home temporarily to say not enough companies coming round so come back a few weeks later. a lot of the other guests were speaking about this. that is linked to the fact we will see another acceleration as the delta variant is tapering off. brainard's speech from a number of weeks ago, it was stated that we finalize september. the market is pretty comfortable with that notion that tapering will not be a shock, it will happen. it seems to be policy certainty. guy: it is going to be a slower taper? ben: it could be slower. it depends on what happens with the economy overall. if you take stock of the gdp now

from the atlanta fed that did see a move down and that has to do with what is going on with delta globally. the export numbers are not that good. the canadian gdp numbers show a big decline in exports. that is one of our key export partners. something about the economy going from a major burst in the second quarter, like 15% gdp, to a slower economy with a delta variant. this is how it is calibrated, will it be $20 billion or $30 billion? over that will be tapering. this is what the market is settled on. ben: taking -- guy: taking a step back, there was a view equity markets are quite elevated. we all seem to be quite -- they all seem to be quite extreme. the tapering potentially

provided a significant risk. the market seems to be completely comfortable with tapering and feels it is something you can manage. i am wondering what is the risk to the market? equity markets continue to charge higher. european equities are bid, we are up another percent. we are close to record highs. if tapering ain't it, what will shake the market? ben: i think something related to tapering, a rate hike cycle. we have not priced at this time like in 2013 when we are pricing in 250 basis points of hikes as early as 2014. the reason is this time the fed has not only done a job of messaging but late to we will do the tapering before we make any changes on the fed funds rate. i think that is well understood.

we'll put the end of tapering close to lift off sooner and that is where the tension could come in in the future. it is not where we are now but the earlier point with another gas is it is low and we are at record highs. the vix curve is speaker. anything going on with the economy will be discounted with volatility. that is more near-term risk as opposed to the rate hike cycle which we a future risk if it happens sooner. guy: one of the other things that has driven this equity market has been how comfortable the market has become with earnings, which have been significantly outperforming. if you take a look at what the payroll told us, and we are getting this from a number of pieces of data at the moment. wages are going up. input costs continue to be a story. if i look six weeks out to the next earnings season, my going

to start to hear companies starting to downgrade numbers because their margins are finally being affected and they can no longer put off the inevitable squeeze? ben: it is certainly a good point. we are dealing with rising costs. the company will pass it on, maybe not directly to the consumers but it will up to make adjustments to the cost base overall because not to mention whatever happens going from a hot economy to equal economy. that presses on margins. learning cycle -- that is a precursor. there will be more mentioning of profit margin pressure in the quarter. nonetheless, the market seems to be comfortable with the fact that you come from record earnings like record gdp and if you slide down it would be a

downside surprise for some of the critical sectors. there is clearly a risk of buying into margins. guy: another way of looking at this is a stagflation. we are in an environment where we will struggle to keep the growth narrative going as it is in we are going to see a continuation of sticky materials cost -- maybe less so, but certainly sticky labor cost. once wages start to get embedded that is a problem for central banks. how close our we to that scenario? ben: i think we are still somewhat away from it. if you truly take the definition of stagflation, it would be rising wages and rising unemployment rates. going in the opposite direction on both. that is a healthy sign. we would like to see writing --

rising wages improve. that being said, i think the stagflation scenario is in some peoples mind about to sell a rating from major growth to a slower pace and you have stickier inflation that could stay stickier, not just because of -- but also rising rent costs. that is another factor. if we're are going to the fourth quarter, there will be an assessment that it is transitory. guy: great to get your take on all of this, particularly on labor day. ben emons of medley global advisors. coming up, angela merkel endorsed lausch it after another poll shows -- what is the latest? let's go to berlin next. this is bloomberg.

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laura: let's check it on the bloomberg first word news. the price for aluminum climbed to its highest more than a decade following a military coup in guinea. the west african nation is in exporter of the raw material used to make the metal. the heads of the coop urged mining companies to keep operating and urge them the existing agreement will be honored. iran has rebuked the taliban for its last -- it's capture of the last remaining bastion in afghanistan. united by their opposition to the u.s.. iran has also financed anti-taliban resistance fighters

before the u.s. invasion 20 years ago. 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. i am laura wright. this is bloomberg. guy: thank you very much. we are about three weeks away from the german election which takes place on september 26. after a summer that saw devastating floods across the country, climate change has become a key issue. activist and campaigner louisa neubauer says no german parties are doing enough to keep the country on the right track. she spoke to maria tadeo. >> we know everything today to prevent the crime it -- the climate crisis will pay off later and we know delaying action is more costly, nominally more money but also more lives.

what laschet is arguing is twisted and far away from the scientific evidence we have about the climate crisis. guy: let's talk a little bit about how important the climate story will be for the election. we have seen significant flooding across much of germany over the last few weeks. that has raised it to the upper levels of people's attention. maria joins us now. as this is unfolding, has climate change, up the list or was it already fairly high up? maria: it was already high on the list, but i would argue there is a combination of factors that make this one of the key talking points going into the election. 40% of germans say climate action should be the biggest policy priority for the next government.

that is a huge number for a single issue. there is a number of factors coming into play. we have the flooding that happened in germany two months ago. this is had a huge impact on the german psyche. this is still conversation of the fact that 170 people died in germany because of extreme weather. luisa, i do not want to call her the german greta, but she does represent the new young german that cares about climate. then you have the politics that feeds into this and that is the european union. we know the european union has set the green deal is the cornerstone policy priority for the next few years. there hoping to hit the climate neutrality target. this is a key talking points going into the election. in my experience in berlin, this is something that comes up time and again, especially when

talking about politics. guy: interesting if you have an ftd and green coalition who would be the third party and would that dilute the green agenda? thank you for much. maria tadeo joining us from berlin. we will take you back to the supply chain issues being placed by german industry. the continental cio nikolai seltzer will be joining us next with matt miller. this is bloomberg. ♪

guy: this is "bloomberg markets." i want to take you back to munich. the motor show is on. matt miller, over to you. matt: you will understand this well. it does not matter if i am racing motorcycles on a track or driving jeeps or just driving my family around in a volvo station wagon. the vehicle does not matter if

you have the wrong tires. that makes all of the difference for your experience, for your safety, for your experience. i am here with nikolai setzer, the ceo of continental. you do a lot of other business. first off, on the tires. tell me what you are showing. i saw something with green stripes and the yellow sidewall, it looks cool. there is dandelions. nikolai: as you referred we are working prominently on increasing grip. the same tire has to be sustainable in the future. a green concept tire, natural rubber with other recyclable materials, which are getting into polyester. 50% of the tire is renewable or recycled. that is what we are showing and

we are going farther to increase that. guy: not everyone note -- matt: not everyone knows you can get rubber out of dandelions. this is a weed that you can rub out against you and when it dries out you blow it off. this is an actual source you can use to make tires with rather than the rubber trees? nikolai: exactly, but you need a specific dandelion. it is a specific weed that has the same dna of the rubber coming from tropical areas. the amazing part is it grows everywhere, it grows in your yard. it is a weed and it can grow relatively close to manufacturing plants. you do not have to transport the rubber. they are not in competition because you can take minor areas when nothing else grows. that is the nice part, save co2. it is a good replacement and is sustainable. matt: and it must help on the esg side so you do not have to

go in the one country in asia. let's get to the tech stuff. when i walk around your stand, there are ships in everything and i'm talking to the ceo volkswagen about chips, the ceo of bmw, everyone is worried, people are on edge about chips. how do you feel about your supplies chain? nikolai: it is a difficult situation. after the pandemic the problem started ramping up faster and at the same time we had natural disasters. we had storms in texas and earthquakes in japan that hits the supply chain. now in malaysia, some manufacturing sites had a ramp down disrupted the supply chain again. the supply chain was week before and getting weaker. we are at the middle of it and still managing as good as we can. we see it will still take longer. matt: how long do you think it will take?

nikolai: it will go into 2022 and there depends how the demand and supply will look like. not only in the automotive industry but a lot of consumer-electronics. you still see strong demand for semiconductors going forward. it goes farther through 2022. matt: let's talk about the future of your business. you just unloaded the supply -- a drive chain unit. a drive chain unit which now makes your business 50/50, rubber and high-tech. how do you see that changing in 2025 to 2030. does the tech side of the business grow bigger than the rubber side? nikolai: the tech side is two parts. some areas have high-growth. a market which doubles in the x.3 years. -- in the next three years. where as you have value business

more in the area of brakes, similar to tires where you are growing more with the markets and the underlying markets, which will change -- if we are successful on the tech side, management is an area where tires are going as fast as the markets. size is not the only part we are looking for. it is the value we can create. matt: in some ways you're dealing with the future mobility of people just as much is the carmakers are. you are working in up on a mess to be able to provide the mobility solutions -- working in a thomas to provide -- in auton omous to provide mobility solutions, driverless cars. how long until we see driverless cars we can fly down and get in? nikolai: it all depends on use

case. we have seen more and more in the last survey that people in the consumers are very interested for a certain period. that is where all of the sensors in the car are working for. the total number of drivers -- to let the car drive is still to be developed for the future. it is still question on how much use would come up. this does take a certain time depending on the use case of consumers. there are certain circumstances, this is very close to coming out into the market. matt: thank you so much for your time. nikolai setzer, probably the most interesting interview i've done the entire time i am here. a lot of exciting tech. this is bloomberg. ♪

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guy: we are wrapping up the

monday session in europe. it is a bit of a different session with the labor day story in united states, which basically means we have incredibly light volume. the labor market story friday is casting a long shadow into monday. the labor market report from friday -- the consensus seems to be the layer -- labor to market report will encourage equities to go forward. if we are going to see a tapered, it will be a more gradual taper. what we are seeing in europe, i appreciate it is light volume, but we've seen equity markets pushing higher. we are pushing further up towards record highs. 475 in the middle of the range, 470 or 480. these equity markets will continue to inch ever upwards and that is been the story of today's session. the ftse, the dax, and the cac

40, the ftse is up 5.7%, the dax is up by .9%. the cac 40 -- a positive story being developed. commodities are important. crude has been dipping. the sallies selling crude -- the saudis selling crude more group leak. aluminum on the bid today. guinea provides the chinese with around 50% of their boxite. it is yet to be proved there will be any supply chain problems as a result of that. the market has been paying attention and the knee-jerk reaction has been to send prices higher. iron ore, the exact opposite. another chinese region putting pressure on steelmakers to reduce the amount they are producing, the result of which the important factor of the iron

ore coming down a little bit today. down 3.58%. in terms of what we are seeing in terms of the stocks rotation story, this is interesting. everything on the front foot, picking up where the u.s. left off friday. technology trading higher. some of the consumer stocks have been quite well bit. there was a fear last week that the chinese pushing back on conspicuous consumption would hit names like lvmh. there now seems to be a thinking that of blowing middle-class -- that a growing middle-class will prove positive. chemicals are up, industrial goods and services are up. bond proxies come utilities, real estate, those are the only sectors under pressure. in terms of individual sectors, leonardo, that company friday, kailey leinz and i talked to the ceo and he talked about the

business in the state and gave more details and a positive update. markets responded quite well to the comments he made to kailey and me and as a result leonardo has gone up 2.3%. eqt is europe's largest listed private equity company. nor do you out with a note -- nordia at with a note saying the market got overexcited and it is not the stock down. eqt down 3.6%. lvmh, the biggest luxury stock in europe bouncing back, up 2.11%. that is a key driver of the french equity market. european should also be paying attention to what happens later on this week. the ecb is holding the september policy meeting. inflation, we have seen some print -- we have seen strong

prints. we spoke to a number of key leaders over the weekend at the forum. policymakers out that meeting down praying -- policymakers at the meeting downplaying their view of inflation. >> i do not think it should come as any surprise there is a spike in inflation. >> we are not concerned by the current level of inflation in the eu or anywhere in the world. inflation is very much influenced by energy prices. food prices. >> all of the institutions consider it will be a transitory feature and we have to avoid if it becomes structural. >> we think this increases a temporary one. >> we are monitoring it. we should monitor it very accurately. without going to conclusions too soon. >> worry remain vigilant -- we

remain vigilant but we are not concerned. >> it is a natural feature of the recovery we are witnessing. guy: a cautious view by the finance ministers. what kind of an event are we looking for? more recently the ecb meetings have been not that interesting. not much has come out of them. cruise control for a while. are we starting to see that consensus fray? chris watling, chief market strategist for longview economics, joins us now. are you excited about the ecb this week? will we see anything exciting from the ecb? chris: i find it hard to get excited about the ecb. clearly movements are happening. we are seeing lots of comments from various ecb governors. you touched on them in recent weeks and it looks as though they're willing to move towards

starting to change their pandemic, their pepp program they have had in plaisance q2 last year. i think it should be quite interesting. into that we get on when they start the tapering. the fed is where the main action is but isaac this could be one of the more interesting ecb meetings. we are looking forward to it. guy: no chance the ecb does anything on tapering before the fed. chris: will they taper before the fed. a good question, absolutely. i think it is a bit of a tossup to be honest. it is interesting what happened with the market chatter after the payrolls on friday, clearly pushing back on that taper narrative in the states by a meeting into november. whether they start before the ecb, who knows. what matters is when they start

between the two of them, particular when the fed starts. guy: the ecb is going to return to the atp program, which was the bond buying program that preexisted the pandemic. do think we will start to hear some details about whether or not some of the flexibility that is built into pepp may be reengineered back into atp? chris: that is a very important point. i suspect they want to do something along these lines to reassure markets. if my memory serves it was the app bumping up against all of the limits on the quantity of bonds they could buy. flexibility in the program to reassure markets. if they do not build that in and start talking about that we will get markets getting nervous about the speed of qe and pandemic bond buying. i think that is important and

needs to be clarified. it is a point of uncertainty and if they announced the beginning of tapering they will have to clarify some of the details on the app. guy: what was your take away from friday's payrolls number? it may push to the right the fence taper, it may in terms of pace slow things down a little bit. maybe it is a slower process. the market took it all in stride. i thought the vent taper was a good -- i thought the fed taper was a concerning issue. the market seems to been -- the market seems to fully discounted. chris: that is the point -- the official tapering announcement was made june when jay powell announced, quite a hawkish meeting. they made it quite clear they would start talking about talking about it if you remember. we saw the move in fed funds

futures, it moved up sharply into that meeting and on the back of it they priced in a bit of a rate hike further out in the curve. that is similar to pricing in the beginning of tapering. i think it is so widely flagged and discussed in the markets come to understand jay powell is super dovish. he keeps surprising the market. again, a case of another reason to expect tapering later, may be slower and less aggressive. less of a problem for markets. it is very widely flagged. the latest fund manager survey, fund managers expect tapering by the end of the year. guy: the market is comfortable with that, discounted that. equities continued to grind higher. what shapes this market? i thought it would be the taper. it will clearly not be the taper . everyone is comfortable with the

pandemic. what are the tail risks? chris: what you have to remember is volatility is dying. every few years you get the death of volatility. it temporarily dies a slow death . think of 2017. i think there are many parallels with that year and this year. your coming out of a crisis the year before. late 2015 and 2016. policymakers are doing their bit to make sure there's a lot of stimulus in the global economy. after that prices, or the -- after that crisis, more the chinese that time and the americans this time. there is no sign of tightening from policymakers. it has all been a tapering. it is a market that should grind higher. of course there are tail risks. people are panicking about september. it is a vulnerable month and

people get worked up about that and worked up about the fact it has been a long time since we have had a 5% on the s&p 500. this is a market that is soothed by liquidity and there is tons of it. we are in a strong uptrend and it has been pretty resilient. frankly i think it will stay that way for the next few months. i think it is an interesting market. of course there are tail risks. there is no shortage of them. now the market seems to be uninterested. guy: as it has been for quite some time. i was a pleasure. thanks for your time. -- always a pleasure. chris watling of longview economics. very light volume. the session start of the ftse 100, normally a little bit of move, today there is none. as far as i can see there is none. those are the final numbers. this is bloomberg. ♪

guy: boris johnson back in the house of commons. we are seeing a session develop which is quite interesting. dealing with a number of issues. interesting to see the foreign secretary in the house. boris johnson like he has had a haircut. we are dealing with more substantial issues, namely the fallout from afghanistan and also how the social care reform program is ultimately going to be funded. this is a huge debate taking place in the u.k.. national insurance versus tax rises. as the manifesto going to be torn up? many in the conservative party quite annoyed.

joining us is emily ashton, bloomberg u.k. government reporter. how has the primus turbine doing? emily: -- how is the prime minister doing? emily: the prime minister just delivered a statement and he did face tough questions from mp's. not so tough around the recall in august when emotions were running fairly high that has settled somewhat. he did say that 311 people still remained in afghanistan, people who qualified for evacuation to the u.k. have been left behind. he has been talking about how people come about using different routes and how people will be supported. how they can be separated into the u.k. and how councils will get enough money to support them?

opposition parties are not quite sure they will get enough money. the proof will be in the putting on that. guy: we are waiting to find out what will happen when it comes to spending, particular young social care, which is becoming a huge issue in the united kingdom and how it will be funded. the conservative said they would not be raising taxes. there is now some debate on whether spending increases can be funded by national insurance or whether the manifesto gets ripped up. how much of this is part of a normally functioning government and how much is about a fight taking place between the prime minister and his chancellor of the exchequer? emily: it is quite a significant moment. not least because central casting is a hot potato that has been passed around for decades and boris johnson wants to be a

man who can say he has solved it because covid has knocked out other plans. i think his team feels like now is the time to do it because it is an election and that few months. aiming for an election might, in 2024, you have time for this to bed in. you will get on with it. we think something will be announced tomorrow. we do not know exactly how it will be funded. if it is national insurance, as looks likely, that will cause a huge row. we have already seen people like jacob reese-moog and jeremy hunter say that is not the way to do it, to hit younger people with higher taxes after this terrible period when semi people lost their jobs and coped with the pandemic. guy: we look forward to that news tomorrow. bloomberg's emily ashton. coming up, the eu drug regulator

reviewing an application for a pfizer booster shot. will talk more about that next. this is bloomberg. ♪

laura: it is time for the bloomberg business flash. i am laura wright. ryanair has ended talks with boeing on a major 747 max jet. the two cannot agree on pricing. europe's largest low-cost carrier has ordered 210 of the smaller max a 300. there is a sign that bankers travel in europe is picking up. london city airport is seeing a tentative reawakening. british airways and leptons a have restored flights to key

financial centers such as zurich and rotterdam. london city airport offers easy access to the city of london and canary wharf. that is the latest business flash. guy: laura, thank you ray much. the regulators -- eu regulators are reviewing pfizer's booster data. anthony fauci talking about the fact that the rolet of third shots in the u.s. is largely led by pfizer. we do not have others clear to take part in that process. bloomberg intelligence analyst sam fazeli joins us now. does it matter that these third shots will largely be pfizer? sam: that is not a straightforward answer, i'm afraid. there are two key elements. with moderna, you do have a risk of a third shot, which is 100

micrograms. three times as much is the pfizer shot. it continues to cause these issues. you have to think about the age you deliver those shots to. the younger you are, the more the risk is. pfizer has a lower risk because it was a lower dose. the question is what are we going to find out on 7 -- on september 17 when the fda reviews the data? will they show any increase in risk? that is what is complicating this picture. guy: i am just trying to get to the bottom of this. does it make a difference or does it not make a difference? it sounds like the amount of rna you will be giving is a significant factor in terms of the complications that could arise. we still do not know whether the pfizer has enough to give a sustained boost.

am i reading that correctly? sam: pfizer vaccine at the dose they have right now gives a pretty powerful boost. the question is which one is more effective and which has a higher safety profile. guy: the question being asked is about under 12. where do we stand? sam: and the u.k. it is a very odd situation in that it is not recommended for the 12 to 17 but they are looking at the possibility of vaccinating under 12. nobody has seen the data under 12. that is supposed to come sometime in q4. i do not know what the jcp i and the u.k. will wait their decision on. i note the u.s. will wait for decision on biotech -- on

biontech and moderna. guy: in terms of what you expect the fall to look like, what are you in dissipating? we are starting to see a pickup and some of the northern numbers. sam: obviously we are going back to school. different states and different governors have had different rules for different schools in terms of masking and how prepared for schools are and whether you need to be vaccinated as part of the return to school opportunity from 12 to 17 is possible. i will see it as possible in the united states of america, potentially dealing with wildly different resurgences, possibly driven by schools. what has been going on in scotland is potentially a single as to what you might be

expecting elsewhere. guy: one final question. the israelis are about to brief the u.s. authorities on their experience with the third shots. what will they be saying? sam: whatever they say will be based on four weeks of data. what i am looking forward to hearing is if there is been a major impact on hospitalizations. the rhetoric has been you do not need a third shot because all you're doing is giving people another shield for a few months. if they have enough data to show severe diseases impacted -- guy: sam fazeli, always a pleasure. thank you for watching. hope you have a good labor day. this is bloomberg. ♪

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