>> good morning. welcome to "bloomberg markets: european open." i am anna edwards in london. mark cudmore joins me in singapore to take us through all of the market action this hour. the cash trading is less than one hour away. here are your top headlines. agents docs and u.s. futures decline as virus cases rise around the world. pandemic boom and bust.

netflix shares plunge after disappointing numbers. europe's rebel soccer league crumbles as the english football clubs involved all pullout. very good morning, everybody. welcome to the european market open. 7:00 in london. later than that in singapore and mark has been getting a head that on the rest of this. what caught your eye this morning? mark: good morning. i am just looking out for the inflation figures coming out of england at the moment. nothing too shocking as expected but the big want to watch is the ppi. what we have seen is month on month figure is .3% versus .4% expected and the year on year was .7 percent versus .8% expected so slightly below expectations. these were not the high basic affect numbers we were expecting. keep an eye out for the next month. soft issue inflation figures this morning. anna: i have numbers coming

through. heineken reporting first quarter numbers. we will get to those. first quarter organic beer volumes, flat. the estimate was for a drop of 4.1 percent so that looks to be better that had been anticipated. that is some important context around that outperformance. they also say that their deployment of evergreen growth strategies, that their growth strategy is on track so that's one of the corporate earnings stories we are covering this morning. we have had plenty. we will be getting through plenty of them as we go through this morning. just under one hour away from the start of the cash equities trade and let's have a look at futures. where we are on global markets. for we get to one of those important earnings stories this morning and this is the picture for european futures pointing to the upside but we are saying that europe saw its biggest drop yesterday in 2021 so in terms of stock market performance yesterday, european stocks down by 1.9% on the year. stoxx 600. that sets the base from which we look to bounce this morning. let's get to the u.s. futures.

the picture looking more negative. the selling was not quite so drastic in yesterday's session over in the u.s., but we see some downside. what we heard from netflix setting a negative tone for the nasdaq and all of those companies that are watching this . netflix is the poster child for what you can do through a pandemic and the risks posed by the reopening traits that go after it. what do you see on the gmm? mark: a little bit of a continuation of that theme from europe yesterday. the idea of weakness in equity markets, asian equity markets. japan and south korea leading the weakness this morning. interestingly enough, it was not across the whole region. chinese stocks held up ok and india, which is the epicenter of this next leg of the virus resurgence is closed today so we don't get this nzx trading. asian fx weakness and bonds slightly stronger. anna: we will get back to the markets conversation shortly. we have plenty of earnings stories to get through this morning.

let's get straight to one of those. ericsson exceeded expectation with first-quarter results, growing its operating profit by 15% in the last 12 months. the swedish network equipment maker's sales stagnated, remaining broadly unchanged. the ceo warned that 2021 will be a year of heavy investment for the company as it continues to gain market share in the next generation of wireless technology. i'm pleased to say we are joined by the ceo for his first interview of the day. very good to speak to you this morning. we have been through some of the highlights and narrative surrounding your earnings but please tell us your story. you talked about gaining market share in 5g. have you reset expectations for what you can achieve their? just how strong do you expect that market share to become? >> it is great to be with you and thank you for having me. if we take a look at what we have achieved, now, we are consolidating our leadership position in 5g so we have now

136 agreements, 80 five live networks and 42 countries. we are ranked highly by them when they assess the 5g leadership. we are a leader in their magic quadrant. strategically, we are doing really well on developing the business and growing our presence and strengthening our market position and what you will see is -- you are right. in swedish krona, our sales were flat but if we adjust for currencies, we had a 10% growth rate so we are back in growth and that really is on the back of a competitive product portfolio that allows us actually to gain footprint. you know from our strategy, working on improving gross margin and working on strengthening our footprint has been a key driver of our turnaround so that is where we are. and then 2021 is a year of investment so we are taking significant investments. we are taking those and

renegotiating our contracts. we are taking those investments and flexibility, our supply chain. we are strengthening our compliance programs, strengthening our security practices so we are taking quite significant investments this year while still growing our profitability. mark: good morning. what do you think of the recommendation to the government that the british market should be made up of vendors that are at least 25% not ericsson and nokia? borje: it is an interesting development that we see. we think that basically, the technologies are well developed and here, the best technology should win at the end of the day. that is going to give the consumer the best user experience and it is going to give the consumer and basically the user the maximum output of the network. that is what i think the legislation should focus on.

then, i understand it is getting to be a very consolidated market so there will be a need for other vendors. i'm convinced that if we focus on driving technology on our side, we are going to provide our customers with the best possible solutions. anna: you say it is all about the products. does the same apply in china? clearly, there has been tension between china and many western governments. this swedish government banned huawei and then there was talk of perhaps you would be in the crosshairs of that geopolitics. have you suffered in china as a result of that geopolitics? you report 78% sales in northeast asia including china. i wonder if you could pull out the china thread for us. borje: our market area had a growth of 80% year-over-year and most of that growth comes from china and you know, we had a big contract win last year where we

strengthened our market position significantly in china. we are continuing to deliver on those contracts and those continue. of course, there comes a new one in the next few months when that now will happen that we of course want to work hard to strengthen our position as well and we know that we need to be -- china is a front runner market together with north america in 5g so we really need to invest to make sure that we can take the market position going forward as well. mark: how big a threat is the rise of virtual radio networks to your hardware sales and what are you doing to respond to that? borje: if you look at the whole cell phone industry, it is a miracle of openness even -- which is the global standard is a very open standard so you can have one interoperable with

another vendor. parts of the network working with another vendor so the reason -- there is an element of openness. of course, the technology will go towards virtualization. our 5g core portfolio is fully cloud native so that is the trend that we see and we are investing to be a leader in that as well. of course, that will drive our sales to be more software oriented but as a matter of fact, they will continue to have an element of hardware that will be significant going forward. it is basically physics. anna: let me ask you about back to the politics a little and how you navigate that. have you spoken to the biden administration? do you sense any particular change in policy or expectation from your sector, from the change in the stance around huawei from the previous administration that would then have an impact on you?

how do you assess north america? borje: north america is a new administration coming in. they are in the early days still and they need to form their view on many centers and it includes telecoms, but what we hear and see so far seems to indicate that it is relatively stable. progress building on what has been the case for the last few years so i think, in this case, i like to say that we can concentrate on the things we can impact. this is something we cannot impact so let's work on instead having the right products, work with our customers, and do that successfully, we have the best chance of succeeding. anna: thank you so much for giving us your time this morning. borje ekholm, the ceo of ericsson. thanks for coming to talk to us on bloomberg tv. we speak with akzonobel ceo after the earnings beat estimates for that business. shares hit a record high this

week. what is next for the company? later, we will speak to the ceo of roche after the results reported this morning. his contributions for the fight against covid very much a topic of conversation. that is at 8:30 a.m. london time. if you have any questions of your own for our guests, use the i.b. function on the bloomberg. that is the function to use. this is bloomberg. ♪

anna: welcome back to the european market open. 45 minutes or start to go until the start of cash equities trading for this wednesday morning. a equity market futures looking mixed at this hour. are we giving up some of the positivity we had earlier on? perhaps we are, but we are coming off a tough session for

equities. mark: a need to be put in context of how sharp the losses were yesterday, particularly in spain and france but across the region overall so i'm expecting today to be a quieter day. i think we are in a more negative framework for equities for the next few days or couple weeks because the virus is definitely making a resurgence and that will go back into markets. anna: let's get a bloomberg first word news update and let's stay here in london with laura wright. laura: derek chauvin has been found guilty of the murder of george floyd. a jury convicted him of that charge and two lesser ones. it deliberated for less than 11 hours over the killing that sparked nationwide protests over racial inequality in the u.s. he will be sentenced in eight weeks. the plans for a breakaway european football competition look to be imploding 48 hours after being announced. the super league says it's looking at how to reshape the project to offer the best

experience and that follows all six english clubs pulling out after a berridge of -- barrage of opposition. in germany, angela merkel's conservative bloc is heading for a tough election battle in september. a new poll shows the green surging ahead, becoming the most popular party in the country. unlike the bruising battle for the conservative nomination, the greens maintain unity in picking their leader. 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. mark, anna. anna: akzonobel reported first-quarter results that be estimates. the dutch chemicals company's operating income climbed to three and a 7 million euros in the first quarter, to run by strong numbers from its paint business as the pandemic has seen a surge in diy and do-it-yourself home improvements, boosting sales for

the paint maker. we are joined by the ceo of akzonobel, who is with us this morning. very good to speak to you once again. numbers coming in better than estimates. what is sustainable and what is not sustainable of what you delivered in the past quarter? >> good morning. i think most of it is sustainable, to be honest. you refer to our paint business being very strong but it is our pain businesses around the world . but also in our more industrial and professional areas for powder coatings, industrial coil packaging, etc., we see double digits and in fact, it's part of markets coming back out of covid but it's also to a large extent, market share, gains we had in those markets so we are confident that it is sustainable to a large extent. mark: good morning.

how are you seeing inflationary pressures on the cost side, specifically wages and logistics? thierry: good question because this is probably the first quarter. it already started in the last quarter of 2020. it's probably the first time in my life that we speak more about supply in our network than the demand for customers and it's both inflation priced because demand is high and the supply is somewhat subdued coming out of covid but it's also just availability so that gets inflationary pressures. if we really look at where things are, we think it might be up to high single digits as raw material input price increases if you can get it. so we, as you might imagine, things are fully on the task of getting our own pricing in the markets reset because we are determined to have that fully

recovered on our end. anna: just to recap on that, in terms of those raw material price challenges, do you think you can recoup all of those through various self help measures and cutting costs? thierry: that is correct. it is mostly pricing. the cost discipline is there. we brought the company from one billion ebitda to 1.5 billion ebitda, resetting our cost structures and processes so we want to maintain the discipline that is mostly around pricing and this hits the whole paints and coatings industry. it's a challenge but also an opportunity to reset our own prices in the market so that is something we are determined to correct. mark: what has been the impact of the microchip shortages on your auto coding business? how have sales been impacted on your customers, for example? thierry: good question.

akzonobel, we are one of the world leaders in basic coatings but we have relatively low exposure to the car industry. slightly less than 10% so we do not see it that much in our numbers but what is clear is it's difficult to figure out which shortage in what material is actually impacting which supply channel at this moment in time. that particular item is probably something that is focused on the automotive industry. if we look at our powder coating business, our paints business, as, there's so many things missing. it's a pretty fluid feel to see where we are. that specific one is not necessarily very high impacting us. anna: in terms of the various sectors, you offer really interesting insight across various sectors as your

customers fall into various sectors. are you still seeing that you see positive momentum behind packaging customers, electronics, metals, whereas those are all proving to be more challenging? how does the sector break down amongst your customers and how does it look to you? thierry: good question. good question. we look at all sorts of segments. if i look at the paint industry, decorative paints across the world, we basically see a positive reset in home-improvement attitude and if you look in the western world, people are going to be working more from home. the importance of the home is more important and we talk about big retail partners in home-improvement and do-it-yourself, they really see younger generations doing home-improvement and much more people taking care around the home because they spent much more hours there and they will probably do so for the foreseeable future so that will continue and that makes us very happy and that is also

worldwide. if you look at industrial packaging, specifically that packaging, that is very strong. it is hard to believe, but the u.s. right now is a net importer because there's not enough capacity in the u.s., so there is an enormous surgeon and mainly away from plastic bottles. aerospace has been not necessarily very nice in 2020 but what we do see the first elements of the mro that starts picking back up. march, for example, was close to normal, which is 50% of the business. consumer electronics, we have the number one player in consumer electronics in asia and that has been extremely strong and continues to be strong. everybody works at home so they need the new tools, the new handheld, the new computer, and that will calculate its way through. anna: thank you for bringing us your insights, thierry vanlancker, the action about ceo.

coming us on the program, europe's soccer league is left in pieces after half of the founding teams pullout. we bring you the latest on european football, next. this is bloomberg. ♪

anna: welcome back to the european market open. 35 minutes to go until the start of cash equities trading and european equity markets could see a bit of upside. in the context of the heavy losses we saw for european stocks yesterday. europe's rebel soccer league has crumbled. all english football clubs have withdrawn after massive outcries . maria tadeo joins us from brussels. it is gone already? it has been suspended. what happens next? maria: yes.

it lasted for less than 48 hours. they had a statement dropping that the project is now suspended. this is all happening after the english unit of the super league, the six teams you mentioned, decided they would pullout given the pushback we saw from fans so there's two obvious questions at this stage. one is what is going to happen with the italian teams participating on this and what is going to happen with the spanish teams that should be participating in the league. we are looking at real madrid, and other big teams that in theory would still be part of the super league but of course, the project at this stage and this hour looks doomed to fail and the other obvious question to that is what are they going to do? they probably feel they have the upper hand now and there is a whole conversation about what to do with the champions league going into 2024. mark: good morning. amid all the news to come out of the football world yesterday, it almost seemed like a sideshow.

how is that being portrayed? is he being seen as the fall guy or was it his plan? maria: that is a good question. to some extent, they were seen as one of the teams leading the operation. but also, -- you could argue he could be taking the blame. a financial operation that would no longer make sense but also, i would argue there is a much bigger debate as to the ownership in modern football, as to whether or not the foreign money -- whether they understand their fan base and whether or not they actually get the tradition of the game. what i would also note, however, is that the other big element to this story is -- and they are here for the money. football is not a charity. some critics will tell you they need to be more transparent in

their operations. anna: maria tadeo with the latest on the plans around football. they came and went pretty quickly. stocks around the world drop amid researching virus concerns. we will have that conversation, next. this is bloomberg. ♪

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>> our top line growth for the region has been 4% last year, almost 20% of the percentage of the revenue. >> we see company after company that are corporate committing to net zero.

pretty much across the board is enthusiasm for trying to get us to a debtor, future. -- to a better, common future. >> there are brand names in singapore and hong kong. but across the region. anna: welcome back to the european market open. half an hour until the start of the european equity session. this wednesday morning. european equity market futures do suggest a bounce. we will so that in the context of the heavy selling we saw yesterday. worth looking at u.s. futures. s&p 500 index features trimming their declines to trade little change. nasdaq trimming their drop to trade at 0.2% lower. it's difficult to read across the atlantic, given that divergence in the performance we

saw yesterday. mark, i know that your focus is on the spread of the virus. the fight against the virus. but this is doing particularly in japan. mark: there is a clear signal coming from the japanese equity market. it was a loss leader in the asia region. that's because virus cases are surging again. this matters for a few reasons. one is it has not vaccinated much of the country. only basically 2 million doses administered in over 100 million. 1% of the population given a first dose. 6% has been fully vaccinated. they have done nothing on the vaccination front and they are seeing a real resurgence. they are talking about declaring an emergency in tokyo. the reason is because they are host to -- meant to host the olympics and there is increasing pressure domestically to cancel or those olympics. there is already talk about limiting what's going to happen. but now they might cancel it entirely.

the public support in japan is hoping it will be canceled. this is weighing heavily on the japanese stock target. the topics is falling sharply today. it is trading off the highest the last couple of weeks on this virus story, and it's now having a risk of breaking down from the trend that has led the last 13 months. if you look at the chart there are two standard deviations below the center trend at the last year. thank you to our chart expert for making that one. this is the real breaking point in japan. anna: a breaking point, and raises questions in terms of what the jail b does from here, continuing to stay out of the stock market, or do they come in? something we will know with our guests shortly. let's go to bloomberg business flash. some of the stories we have been covering, lots of earning stories this morning. >> maybe all over netflix and show. netflix credit the pandemic for delivering record growth in 2020, now it's blaming it for

the worse first quarter and eight years. shares plunged for the streaming service adding far fewer newer customers than expected. netflix as the current quarter will be even more challenging. it's predicting a gain of just one million new subscribers. efforts to reach a global deal on cutting big tech has hit a sticking point. one of the ideas as to factor profit margins into how these firms are packed, but amazon has the unusual status of a load margin tech giant. two italian officials tell us the e-commerce firm should still be covered. they say there is no reason they cannot tax companies with narrow margins and high revenues. discord is said to have projected microsoft $12 billion takeover bid. sources tell bloomberg the videogame chat company is now focused on a long-term plan of potentially going public. twitter has expressed interest in buying it. no official comments from any of the company. that's your bloom -- that's your bloomberg business flash.

anna: after rising to record highs, stocks are under pressure. that's as a renewed surgeon covid cases is raising the prospects of new lockdowns. asian stocks have tumbled following session set to the downside in the west. european equities sink the most in four-month in the u.s. stayed for a second day. we are joined by the senior portfolio manager for fixed income. heavy selling for european equity markets yesterday. teachers look a little flatter. but this seems to be an epicenter for the market response, if not, the virus resurgence. but we seem to be selling everything. we are concerned around tech names because we are concerned that when things reopen they won't do so well. what we are selling travel and leisure stocks because we are concerned we won't reopen quickly. airy negative sentiment for markets at this point. >> i think that's partly the problem of how we have traveled from your today.

a strong showing from markets across the board in q1. i think now what investors are facing is the prospect that there is a reasonable amount of optimism already priced in. i think the growth normalization has broadened the consensus. it's possible that we see a slightly cooler rate of growth in the second half of the year as the economy decelerates to a bit more of a cruising altitude. so i don't think it's necessarily anything more than that, but in terms of the new covid cases, we know that we are going to see an ongoing tug-of-war between vaccine rollouts and new cases increasing as the economy opens. i think over the medium-term, the fact that we have technology to beat this virus via vaccines will be the dominant driver. mark: good morning. you seemed quite relaxed about the virus resurgence in terms of media perspective. i am turning much more worried. i am curious what would make you

change your mind? for me it's the fact that what happened in asia, we have seen a fresh record and global cases, we will see a fresh record probably within a week or two, and the situation in india is looking like it's getting out of control. is there any kind of data that would come and that would make you get more worried about the virus and make you think there would be a material correction out of it? >> i think the current template has been that we have been seeing decreasingly significant selloffs in reaction to increasing virus cases. the market is adjusting to the idea that now that we have vaccines that we know can be deployed to tackle the virus, any new increase in cases lest about the end destination more about the pace at which we will normalize. so i think, given markets are generally discount with a longer-term view into the future, that's why i think the

vaccine will be the dominant driver. what could change that is, if we do see new variants or the efficacy of the vaccine start to be questioned for any reason, i think that is the reason we could get more of a meaningful correction in risk assets. anna: you think the vaccine rollout in europe and in the united states, in terms of market sentiment and market thinking, that is simply going to dominate the news flow surrounding the virus resurgence in india and brazil, is that the thinking at this point? jub: i think so, but we are seeing increasing differentiation between the regions that either aren't seeing an increase in cases, or are being more successful in terms of the vaccine rollout. so, emerging markets do look weaker on both of those friends. and i think that has played out in the form of em assets, whether it's emfx or e.m. assets versus e.m..

we have seen the performance come through the last couple of weeks, so we do think it's great to be focused on those regions that do look a little bit stronger from that perspective. that's why we have a preference for risk at this point. ultimately, we are confident that e.m. will play catch up, but the normalization path for these countries is a little bit more uncertain. mark: this is much more e.m. focused and it's an equity story. how do you think emerging markets effects will fare in the context that we are seeing many emerging markets in central banks be aggressive about turning hawkish and raising rates. do you currency markets will hold up better? jub: emfx have come under pressure in the first quarter. there are two main reasons for that. one is that we have had upside risk layout in the u.s. in terms of the growth. we've had upside surprises in terms of the vaccine rollout,

the pace has been very strong and on the fiscal side we have had a lot come through. so the u.s. is looking good relative to the rest of the world. going forward that is likely to ease as i news is in the price. but we have seen e.m. come under more pressure as we have mentioned around an increase in cases. so going forward, i think there are those two factors to rebalance in a way that will be a little bit more positive towards emfx. but for a longer-term view, it's difficult to cem coming out of this crisis with fewer scars than in developed markets, so it does lead us to being more cautious on emerging markets. anna: stay with us. with us a little bit longer on the european market open. coming up, the top 1% saw their net worth rise by $4 trillion in 2020. we look at why that matches the markets. that's next. this is bloomberg. ♪

>> the rich have never been richer, but they are still not very happy. the top 1% saw their net wealth increase by four chilean dollars and 2020. now there are eight sense of billionaires in the world. that has risen disproportionately compared to the lowest income earners. but strangely, there are attitudes haven't risen by the degree. the university of michigan survey shows that attitudes of the most wealthy aren't all that different from the lower end of the spectrum. it's unusual because wealthy

people own the majority of the stock market, typically, when it's roaring, as it is now, their personal fortune increases, followed by good feelings about the economy and finances. i spoke with jim paulson who says there could be a couple of reasons why this happens. >> there is certainly a tremendous political divide in the united states. there is social and civil unrest going on, which is disturbing. there is a great likelihood of tax increases coming on wealthy individuals predominantly, or on their companies. and there has been in abuse and overuse of economic policies. >> it might be hard to feel sorry for them, but the woes of the wealthy could be good news for anyone else invested in the stock market. it's a contrarian indicator. the thinking goes that when added to our lows and room to improve, the stock market will go higher because there's room to put more money to work in it. at least that has been the case

historically. >> the most particularly interesting today, is historically by this when it hits the recovery. normally that spreads. it is not. maybe there is another big thing going on but i would appreciate that this is terrible, i don't know. but at least historically there is still upside room for reestablishing what we got. anna: that was bloomberg's dani burger on how the wealthy is set to have a wealthier feeling of becoming more wealthy and 2020. let's talk about taxation. i know there are some thoughts about that. that was interesting, and exploration of how the wealthy got wealthier but did not

necessarily make them feel happier. i wonder if it's because of the fear of taxation. we have a little bit about it, but we don't know everything. how is that affecting the markets? jub: i think it's coming sooner than most investors probably would expect if they asked -- if you asked them a few months ago. we got the democratic win in the georgia runoffs, i think most people thought we would get a large fiscal spend and any sort of tax increase would be further down the agenda because we are still in this recovery phase post covid. i do think it's an interesting theme, in this story is becoming much more about the regis tribune than the outright -- redistribution than the outright spend talking about the wealth gap in the previous segment. taxing corporations and looking to spend heavily on things like transport, infrastructure, schools, housing, etc. i think it will be a more

dominant theme with this new administration -- thing with this new administration. mark: do you think the idea about redistribution rather than a massive net spend will happen? jub: there are certainly some segments in the equity market that it doesn't look like the tax plan has been fully respected. you can make the case for the ig market, which benefited from the corporate tax cuts that came in under president trump. that has not seen much of a move on the back of this tax story. i think it's still relatively early days in terms of investors pricing it in. we still have full clarity on what the tax package will look like, but we are likely to get that in the coming months. anna: are you looking for guidance from companies about whether they still plan to do buybacks? some people suggested if we see higher taxation on corporate that would mean

reduced buybacks. could we get guidance on that during this earnings season? jub: that's one of the things that will be interesting to look out for. but i think a lot of ceos and cfos will be in a similar position to invest until we actually know the details of the tax package itself, then it will be very difficult to forecast what any sort of buyback programs will look like. mark: with earning expectations so high for the earnings season, do you think the index as a whole is down by surprise and it will be hard for the earnings season to provide momentum? jub: we have seen that in certain sectors already, particularly, for example, the u.s. banks, which reported a strong set of numbers last week. we have not really seen that go through in terms of strong share price performance. that does go towards the idea that the recent earnings

supplies have largely been as expected, and it goes a little bit with the broader macro view. we have also seen a macro level and very strong globally, but has not really been matched with higher yields. 30 year yields topping out around 250. so i think it does point to the idea that this growth recovery as a bit more consensus. most people expect growth to be strong with risk for the upside. the question is now whether we decelerate more in the second half of the year, and what looks like a little bit more of the goldilocks type of scenario, potentially. anna: thank you for your time. jub hurren senior portfolio manager. thank you for joining us. let's go to bloomberg first word news update. laura: u.k.'s prime minister boris johnson says britain must be ready for another wave of the coronavirus later this year. he's insisting the country is still on tap -- on track to and

restrictions by june 21, what is warning we cannot delude ourselves that covid has gone away. cases have been falling in the u.k. since january, still there are concerns that new variants could knock them off course. johnson & johnson will restart deliveries of johnson & johnson to the european union after the blocks job regulator said the benefits outweigh the risks of a possible risk of blood clot. the review from the agency echoed its comments of the astrazeneca vaccine. the white house is set to double its commitment to cutting greenhouse gas commitments. sources tell bloomberg that president joe biden will cut emissions from -- levels, but ones that they may try to avoid laying down a specific target number. biden is hoping -- having a climate summit this thursday and friday. global news, 24 hours a day on bloomberg quicktake, powered by more than 2700 journalists and analysts and more than 120

countries, this is bloomberg. anna: coming up on the program, we look at your stocks to watch. the chief equipment maker is expecting jeanette -- demands to store amid a global semiconductors shortage. on that next. this is bloomberg. ♪

anna: welcome back to the european market open, eight minutes until the cash equity session. pointing modestly to the upside. u.s. futures looked mixed. that's get the individual stocks we are watching. dani burger is here with us. asml on the top of your list. good morning. dani: afc -- asml for previously deve forecast saying sales will grow in the double digits, now we have a firm number.

the number they have given us is a 30% jump in 2021 sales. the ceo is saying that the main reason why it's above guidance is basically the market situation. you just read the papers, chip shortages everywhere. that has been the word for 2021 when it comes to this sector so far. that seeming to benefit asml for the rest of the year. mark: what's going on with heineken? dani: people were expected to have strong less beer in the first quarter of 2021, but that's not what happened. forecast were a drop in sales. heineken instead ending the quarter flat. they did point to a challenging environment that should start to improve in the second half of this year. we have pubs opening, more people out at ours drinking. more sales for them, but it's one of these things that is a cyclical, people are going to drink whether there is a lockdown or not, it would seem.

anna: apparently, this is one of the truths we have learned. let me ask you about roche, they are facing competition. diagnostics has been a strong part of the business and they are trying to offset some of that due to covid. dani: exactly, specifically on that competition front. it's a trio of three older cancer drugs, but now there are these cheaper alternatives. that really eats into sales, meaning there first quarter sales did dip. it was expected and basically in line with estimates. those covid tests did help offset this, but not completely. they say that the rest of the first half is going to be a difficult one for them. anna: dani burger with the stocks we are very opportune moment to tell you i will speak with the ceo of the farmer -- farmer giant roche -- farmer giant roche. -- pharma giant roche.

that will be in the second hour of the program. talking about futures. u.s. futures are mixed, european futures looking a bit from heavy selling. the virus is spreading and bearing many parts of the emerging markets, which is a human tragedy. let's not forget we are not all that far from the all-time high. mark: absolutely. i think jub made that point about the fact that the price action has been positive when we have these virus scares. that has been the theme. we have seen a wobble, but people buy into it. i'm not sure we will see that this time around. i think the next few weeks we will see a serious care that we saw before. it's interesting. so far we are seeing good price action in flat futures. chinese stocks traded into the good side of the european session. anna: thank you for spending the past hour with us on "bloomberg market: european open." i will be back with the second

hour of the program in a few minutes time. we've got four minutes to go until the start of european equity trading. i will be back with that shortly. this is bloomberg. ♪

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anna: welcome back to that market open. here are your headlines. u.s. and european futures read losses amid a surge in virus cases. pandemic boom and bust, a message of disappointing numbers. europe's southerly crumbled, all teams pull out. 30 seconds to go to the trading session. let's look at that futures.

things have been mixed, just pulling up into positive territory a little more firmly in the last 10 minutes. when you put it into context in the losses we saw yesterday, some of these losses were under pressure. in yesterday's session we had european markets down and the ftse was down. that is the background context to the opening of this market. european equities coming through for the opening of the ftse up. dive back in spain opens pretty strongly and is up. concern around the virus and spread of the virus, the mutation in particular in india and brazil is still a part of that market thinking. also getting into the psychology

because of what is happening in tokyo and moving closer to a state of emergency. what does that mean for the olympics? all of that could weigh heavy. european equity markets looking on a slightly brighter side. this is all after a surge of global virus cases. joining us now is curt custard, newton investment cio. what do you think of risk appetite at this point? we see it bouncing, and comes on the back of heavy selling yesterday. we are not far from the all-time high, how strong is risk appetite for stocks? curt: this is a question of continuing liquidity. there is not a lot of place for the money to go.

i think it is still posed to go higher. i think the virus is not dead, it is just dead and some of the places where the equity market trait. -- trade. anna: it will come to technology in a moment, on the one hand, netflix is not managing to be sustainable. we are also worried about travel and leisure. we seem to be caught by that negative outlook. curt: i am comfortable that human ingenuity is going to start to allow sectors to reopen. the thing i was most impressed on was how people are making it work even under difficult conditions. the places with less will be the

ones going forward unless they have their vaccinations done. anna: you have been to the u.s., congratulations in a year were leaving your house is an achievement. let me ask you about what you are looking for. we talked about whether we are looking for guidance here or commentary, when you look into the earnings reports, what are you focusing on? curt: valuations are pretty bull across sectors, some is due to covid. the equity markets rebalance going forward and finding out which companies will benefit and which are not. i think that biden administration has been discounted.

it is good for aggregate demand. anna: from your notes, ahead of our conversation, you like u.s. small caps. curt: indeed. there has been a lot of structural change there. some companies with weaker balance sheets have folded. the rest of that sector is doing well. i think you can see a presumption of the reverse we saw earlier. anna: thank you very much, curt custard the newton investment cio. he stays with us. coming up, our company slows to a near halt.

plus, roche demanding for covid test, pledging revenue, we speak to the pharma giant ceo later. this is bloomberg. ♪

anna: welcome back.

seven minutes into the trading session. it looks brighter than anticipated. european stocks are moving up. some of the earning stories, some of them, many of them, resulting in some positive momentum in the share prices. a few i can see on my screen. let's take a look at individual movers. dani: it is tech and the chip sector. asml reporting 830% rise. -- a 30% rise. putting some numbers to the chip shortage is helping prices. orlando also rising in the trading, reporting first-quarter numbers that beat analyst estimates. people are shopping online and more stores are using that

platform to market their products. they are cementing that platform. e takeaway, one of the biggest losers is facing more competition over announcing they will launch uber eats, just eat is falling in light of that. when it comes to macro, we are looking at slight gains on the yen. this could accelerate if tokyo goes into a state of emergency which we hear they might. nasdaq futures are dipping. a lot of this is due to netflix. just another day of down in bitcoin, down about 2.6%. jp morgan warning that the technicals are starting to look weak. might be difficult for bitcoin to get back. anna: thank you very much. dani burger with the latest on

earnings and other movers this morning. she was mentioning netflix so let's get to that. our top earning story, netflix credited the pandemic with delivering record growth. now it is blaming the pandemic for the worst third quarter in years. the streaming added fewer customers than wall street expected and said the current quarter will be even more challenging. joining us is one of our analyst. what is behind the slow down? the level of lockdown stringency, we see that coming down in 2021 as the economy is opening up. that seems to be moving in tandem with that netflix share price. we had all expected they would run into a bit of a headwind as the economy started to open. matt: that is right. we are seeing a couple different

affect from the pandemic. they had an incredibly strong 2020 adding almost 37 million customers. a lot of customers. that was already baked into some degree in the forecast. europe was the biggest part of the myths. the other side of the coin, in q1 and q2, there was not so much content on netflix and that is what calls customers in. they pull you in with these new shows and films that you want to watch on the platform. i think until date get that content production ramping back up again, it has been impacted

by covid, they will be suffering in terms of luring new customers in. anna: i remember reading an opinion piece suggesting it is not good for the streaming customers if we all sit home and watch everything because there is nothing left to watch. it is new content -- i have not wash everything, that brings new people in. how does that second quarter compared to expectations? matt: if you look at bloomberg consensus, analysts are looking for the 3.6 million, it is low. the weakness in europe and latin america is hitting the most. when you look at the full year, they are expecting 26 million. they do about 5 million in the first half, that is a big catch

up to do in the second half of the year. when you think of the gradual easing of lockdowns and people gaining freedom, that may be a bit challenging for them even with a huge lineup of content. anna: thank you very much. thank you for joining us with that netflix story. we will be back in a moment. i want to tell you about football. we have a headline that says the shares fall 11% as that european super league nears collapse. a number of that english clubs that were involved have decided to push back. let's get back to the reopening of trades and the effect this is happening. curt custard is still with us. netflix, as we have mentioned,

they are a classic example of a pull forward affect we have seen. is that going to be something that is an issue for many in the tech space? they are not going to stopping relevant, but so much of the demand will will forward into 2020. curt: i think there is a little bit of the case there. as the economy reopens people will have a rebound affect back into social. netflix is something you do in your house, as the weather improves, people will spend time outside. that means it will be less hours behind a screen. that said, all of the streaming services have made huge inroads into our lives and going forward we are not going to an environment where streaming is somehow relegated. i think those days are gone and streaming will be here to stay.

anna: assuming it is here to say, even if we are able to travel, what kind of demands are we going to see for travel and leisure? how much exposure for a sector like that? we saw in london it is down, are these opportunities to get involved in that sector? curt: i think there will be a huge push. what i am looking at is airlines in the u.s., the middle seats are getting filled up. also, airline ticket prices are good indicators of what is pent up demand. that said, the covid situation has not gone away. i would expect you will have to be very clever about where you book and do some looking in terms of vaccination programs. anna: let me ask you about macro movers, the dollar, you expect

the dollar to remain lucid. what will keep the dollar in the range bound if that is what you are suggesting? curt: it is a trade-off. the u.s. economy is opening up and i would expect stronger growth, especially if biden gets his plans through. like it has been for to get -- for two decades. interest rates and where they are now, i would expect the dollar to have some range. anna: that has implications for emerging markets. emerging markets are in the headlights of the virus pandemic at this point. that is one of the ways emerging markets are suffering. there are a lot of divergence and the way you stand on emerging markets, where are you right now? curt: there are markets that

will benefit from the structures going on and there are markets where the virus has taken over. if you look at brazil, that story has not played out yet. korea will benefit from china's expansion in the u.s. expansion, you have to be aware. anna: you can see the way this virus affects trading. the recovery story tends to bring it to the forefront. curt custard thank you for joining us. he will continue the conversation with us on the make radio. -- with us on bloomberg radio. laura: you kate vaccine rollout should prevent another vaccine washout. along is there is clarity around travel restrictions. >> i think now with the

vaccination starting to roll out, you are going to see we will move into more of a recovery phase. what we do not know yet and will consumers do not know is that what type of framework will be in place and what types of restrictions will be in place and what will those restrictions be? laura: hsbc moving some executives to asia is leading to tension at the banks. sources tell us people in china are worried. regional chief has enjoyed a high degree of autonomy and he is said to be unhappy about the cost of relocation. that is the bloomberg business flash. anna: thank you. coming up, europe's stock is left in pieces as that half of their teams pull out. we already told you about the share price under pressure,

struggle to open. we will get the latest on the fallout from the attempted creation of this european super league. this is bloomberg. ♪

anna: welcome back. 20 minutes into our trading session. european markets are a little bit brighter than futures had suggested. for doing well. that is part of what we are seeing reflected in these strong share prices. asml with very strong results coming through. the shares are surging the outlook also pleasing markets. we all know about the ship -- chip shortage. heineken is up 3.9%, confirmation that many people drink a little bit more than some anticipated.

just eat takeaway is down on the back of some increased competition reported. we will see increased competition for this, particularly in germany. let's get back to the football story. europe's rebel separately crumbles days after its launch. all english-speaking clubs have withdrawn amid outcries from fans, players. maria tadeo has been following this. what happens from here? maria: less than 48 hours that we had the super league before it was suspended. teams will have to reconsider their options going forward. this whole debacle triggered by the announcement from the

english unit. there was a lot of backlash from fans and others. obvious questions right now, what is going to happen with the italian teams and spanish teams? they are still supposed to take part in the conversation. what reaction are we going to get? four today's they had been saying that the super league was not happening and competition would not take off. on a bigger picture there is a debate as to what to do with the champions league. how to change the format. you could argue that u.s. has the upper hand. it will be interesting for the reaction they give. the big question, whether or not the project is completely over at this point, it does look like is doomed to fail. anna: yes.

if one of the clues that this is over is some other people that were trying to put this together are leaving their post. someone run into run that business, what does this tell us about the role of billion there's as owners in football clubs and what they are trying to achieve? maria: you could argue that it is already happening. we have to backlash yesterday from fans who said we need to reclaim football and make it more about the team, support, tradition and history. they look at this as a financial instrument but they are not fully getting that eat those in the legacy. -- the ethos and the legacy.

it is a broader conversation to some extent that may be happening going forward. i would stress that a lot of this is about the money. it has come under criticism by not being transparent and accountable. it is a huge business. we can talk about the billionaires, but the whole federation is going to have to answer questions after this. anna: absolutely. thank you very much. maria joining us with the latest on football and the collapse. coming, back to earnings. old cancer drugs face competition. we will speak to the pharma giant ceo. that conversation is coming up. this is bloomberg. ♪

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anna: welcome back to the market open. half-an-hour in to the trading session. most are aided little bit by the earnings stories. let's get a sector breakdown of what we have for you across these equity markets. yesterday travel and leisure was really be enough about concerns of the pandemic. that is in the mix this morning. travel and leisure is somewhere meant table. to the upside, technology is doing well.

that is interesting in the context of netflix, a different type of technology stocks. here in europe, the downside is industrial goods and services and chemical is weaker today. let's get a first word news update. laura: former minneapolis police officer derek chauvin has been found guilty in the matter of george floyd. a jury convicted him after deliberating for less than 11 hours. jovian will be sentenced in eight weeks. prime minister boris johnson says britain must be ready for another wave of the coronavirus later this year. he is insisting the country is still on track to end restriction but is warning that we cannot delude ourselves that covid has gone away. cases have been falling in the u.k., but there are concerns that new variants.

angela merkel is headed for a tough election battle. a new poll shows the green surging ahead becoming the most popular party. the green maintain unity. 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. anna: let's get back to the earnings stories. roche, partially planting revenue. the giant previously warned that the first half of 2021 will be tough but things will improve with that vaccination drive continuing. joining us now is the ceo, dr. severin schwan.

good to speak to you. let me talk to you about the first quarter, you said it was the high watermark. just how much do you expect to fight back in the second quarter? dr. schwan: overall, we are very much on track. as you can see, we have some concern in outlook. we had an impact of 1.6 billion for the first quarter. we expect roughly an impact of 4.6 billion for the full year. you can see that we had an over proportionate impact in the first quarter and that will be less of an impact for the main this year. anna: that is on the pharma side

of things. the pandemic has affected the uptake of some products. i wonder if that impact on people's willingness to visit their doctor to get the drugs they should be prescribed, whether that has lasted longer in your numbers than you anticipated? dr. schwan: what we are seeing is interesting on the diagnostic side. we see a normalization, a recovering of business. diagnostic is an early indicator in our business. first you get diagnosed and that you get treated. what we expect for the upcoming quarters, a normalization of treatment rates. we have -- we are still negatively impacted in the first quarter, but we did see a recovery in diagnostic side. that should be the signal for the earlier prediction as

vaccinations are rolled out across countries. anna: you mentioned diagnostics and that is part of the business doing well. the market had high expectations for diagnostics, considering the virus and where we are with that. as you see certain economy start to reopen, and you anticipate they will come up what is your anticipation for how diagnostics will do? what will that look like? dr. schwan: let's hope for that, that there will be less need for covid testing. we have seen it in certain regions already. the good news is the rise of covid testing, at some point will decrease. we see a good recovery of the

ongoing business. i remain very optimistic for guidance six, not -- optimistic for diagnostics. anna: you talked about the covid pill but that could achieve. there have been delays because of successes in tackling the virus where you were doing trials. what with the expectation be around that type of product? dr. schwan: our phase ii trial in the u.k. have been delayed because it is more difficult to record covid patients. we went ahead with the planning for the confirmatory trials, the phase three trials, we expect it will be done by the end of this year. anna: can you tell me about the antibody treatment that you produce that is being used against covid. you told us last time with biologics there is a production

that you are working hard to boost. has not been successful, the efforts to boost? what production levels are you working through now? dr. schwan: let me reemphasize the fantastic and great phase 3 since we spoke last time. phase 3, has now shown that when those antibody cocktail's we can reduce hospitalization and death rate by 70%. this is really impressive. we have ramped up with our facilities. it remains also true that even in the long-term, supply will be limited and therefore we have to prioritize patients with this type of treatment.

anna: how are you about the treatment and diagnostic to be as effective as you described with the new variants that we know less about? maybe you are less competent, give us -- confident, give us that. dr. schwan: we have to adapt to our past and our medicines. that is also true for vaccines. we are already working on next generation antibody cocktail's.

we are very carefully watching on the testing site, with the new variants. i have no doubt that there will be a deed for new antibody cocktail's, for refined tests and new versions of vaccines. anna: thank you for your time. dr. severin schwan the roche ceo speaking to us on the daily report earnings and against the fight -- and in the fight against covid. coming we speak to the general partner of northzone, par-jorgen parson. this is bloomberg. ♪

>> we, the jury, in the above entitled matter as to count one, unintentional second degree murder while committing a felony, find the defendant guilty. this verdict agreed to this 20th day of april, 2021, at 1:44 pm. signed juror foreperson, juror number 19. pres. biden: this can be a giant step forward in the march towards justice in america. let's also be clear, such a verdict is also much too rare. anna: former police officer, you

saw him there found guilty on all counts, guilty. many protests. president biden spoke to the family and attorney after the verdict was released. let's get to the business agenda this morning. laura: netflix credited the pandemic with a delivering record growth in 2020, it is waving it for the worst quarter. shares plunged adding far fewer customers than expected and netflix says the current quarter will be more challenging. efforts to reach a global deal on taxing big tech hit a sticking point. one of the ideas is how the firms are taxed, to tell us they

should be covered. there is no reason they cannot tax these companies. that is the bloomberg business flash. anna: thank you. my next guest has worked at venture capitals since the early 2000 helping grow companies from startups to entities with multibillion-dollar evaluations. digital learning platforms, one name still in the portfolio is a by now pay later company. the most valuable start up for them. during us now is par-jorgen parson, northzone general partner. how confident are you, in your portfolio you have a lot of

consumer businesses, something of a passion of yours, how confident are you in those consumer internet businesses as we emerge from the pandemic? virtual travel or event tech may be appealing when you cannot leave your house, but on the others will it be just as appealing? parson: it is clear that the entire pandemic as fast forwarded digital transformation that we were expecting in the next 3-4 or even five years. that has paved the way to trade on the platform for further growth. while there has been a jolt to the system, it is clear that both the consumers and companies have changed their buying decisions. that place into the digital company's hands. anna: we have seen the consumer internet business deliver room

-- deliveroo. what have you learned from that experience, watching that happen? there is focus on lack of profitability, investors were concerned that regulations might change end of business model might be vulnerable. what kind of learnings have you taken from not? -- from that? parson: i am not familiar with them, but i think it is important to actually have in mind that when you go public, you are under a different kind of scrutiny. you need to reach a capital market with a product -- a market with a product that is understood. that is something that in certain markets you need to show not only growth but healthy economics.

to be able to show a clear path to profitability. that is sometimes more convoluted with some companies than others. i think the public markets are really powerful for companies to continue their growth project. -- growth trajectory. it is an important tool for companies to continue their growth. anna: where have we got to on conversation about you and value tech companies? that was part of the conversation that u.s. markets are more comfortable with valuing those companies. what is your experience of european investors on that? parson: i think that european markets have the tendency to undervalue growth and

innovation. the business model innovation, consequently many of the most promising companies have found the correct listing venues in the u.s.. i think that is sad for the european markets at and i really hope that they can come together and consolidate more around a few of the bigger listing venues and supporting info structures that analysts and the like will help build confidence to fully understand that high-tech and growth stories. anna: how does the role of spac fall into that? that seems to be where the vibe is. do you think that is here to stay or short-term trend? parson: i think there is a boom

in spacs for sure. there are 500 looking for acquisition opportunities and with all of them having some sort of 1,000,000,000-3,000,000,000 target characteristic, there are a lot of companies being pursued by 500 spacs. i do not think that all of these spacs will de-spac and be successful. in boils down to who the sponsors are and what they have towards got markets. for the long haul, it is a phenomenon that is here to stay but it may not be at the scale we are seeing currently. anna: so maybe do not judge them on the ability to raise money.

thank you for joining us. par-jorgen parson general partner. coming up, 50 minutes into your trading, we hear from the fed chair about how the central bank can tackle any quality. that conversation is next. -- bank can tackle inequality. that conversation is next. this is bloomberg. ♪

>> there are two different

issues. we only see them through the lens of our existing mandates. we have not gotten any mandates. climate change, for example, the reason we are focused on climate change is that our job is to make sure financial institutions, banks, the largest ones, understand and are able to manage the significant risks that they take. the public will expect us to do that. climate change is another one of those risks. the large banks relies that. if you talk to the leaders of these institutions, they are focused on what climate change will mean for their business and business model. it is within the scope of that mandate. it is similar with any quality -- with inequality. we have these disparities, racial, gender, and others in our economy and they hold the economy back. we all wants an economy where

everyone has the ability to contribute to and benefit from the prosperity that we have in our greater economy. we have tried to incorporate in our monetary policy framework the thought that maximum employment, that is a reference to those issues. we not realize that unemployment can't go low for a long time without inflation being a problem which will help those groups. on that i will stress that we cannot be the primary policy organization that treats either climate change or inequality. we see it through that lens of our existing mandates but those are issues for representatives and other parts of the government more than for us. >> when you come to work you see people in tents, homeless people

living in tents, your mandate is not to go solve that, is there anything you think the fed should be able to do or should be given more power to do to help people that are really suffering in the pandemic? >> we are not seeking new authority. we are not the agency that has the most authority over that. i just happened to see it right here on virginia avenue. there have been a couple of tenths at this part -- tents, at this part of town. now there are a lot. you have to think it is become of the pandemic -- because of the pandemic. how does that play into what the fed does? i think we need to keep those people in mind. we do not have tools to deal with them directly, but those are people, many of them were

probably working in 2020 before the pandemic hit. i think they need to be in the room with us as we make our decisions about monetary policy. we need to be thinking, it is not just a headlight, it is those people we are keeping in mind. anna: the fed chair, jay powell their speaking. you can hear more from the conversation tomorrow at 7 p.m. london time. if you are really keen, you can watch it tonight at 9:00 p.m. new york time. you can pick your time accordingly. we talk a lot about earnings, that is a factor of what we are seeing on european equity markets. the chip equipment manager and their strengths. heineken is doing well.

that is it for the european market open. a beautiful day here in london. this is bloomberg. ♪ it's moving day.

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>> we, the jury, in the above entitled matter as to count one, unintentional second degree murder while committing a felony, find the defendant guilty. >> i feel relieved that i have the opportunity to get some sleep. >> i would not call today's verdict justice because justice implies to restoration. >> we still have work to do. >> no one should be above the law. today's verd