Transcripts For BLOOMBERG Bloomberg Surveillance 20240713

We have a number of exclusive interviews for you. As always lets check on your markets. One of the things we watched the most. Rising, european stocks were up, they are turning a little bit lower. The risk on kicked off the week is starting to show signs of easing. Yields under recovery. Also looking at Sterling Sterling rallying. Well have plenty more in your markets. Lets get straight to the bloomberg news. Trump is escalating his threats against the World Health Organization, he is unhappy over its handling on the coronavirus pandemic and may personally just permit the cut u. S. Funding of it doesnt make sweeping reform bring saying the agency is to close to china. President xi gave the who his full backing. The u. S. Is going to have to suffer through a spike in virus cases as the economy reopens according to lowell lloyd banks Lloyd Blankfein break saying they can afford to wait afford to wait for vaccine before reopening. Most historical credits would have to acknowledge. Can i contemplate something that goes on so long and all that good stuff, sure, but i would say there 10 or 25 things to worry about i dont think that should be high on the list at all. Sweeping. Is planning tax cuts while protecting the automotive and agriculture interest. Spring will be able to enter the u. K. Tariff free from january the third. Global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine thank you so much. Angela merkel and Emmanuel Macron have offered a breakthrough deal to shield the eu. Europe must it together. We want to set up a temporary fund to reach 500 billion euros from the eu budget. Not a credit but a budgetary expenditure which would provide most funded sectors and regions print regions. Francine the german and french plan will need backing of all 27 members of the union. Great to have you on the program. Always giving us some insights onto the market. Wasmarket reaction to this shortlived. The markets is appointed do need to wait whether this gets ratified . Thanks for having me. I think thats would present macron and chancellor merkel announced. The answer to this crises was , putting inystate place to effectively an Emergency Line to the various companies. And what they did yesterday with stronger statements. Do question about the markets, i the markets have reacted extremely optimistically to the various announcements, the name the assets was about rallied whatever the fed was able to buy, you look at the program in the u. S. Now its only about providing the Additional Program effectivelyy, but to have the economy back in place. Youve any position in it has around 26 billion in assets and you focus on forming groups. About the mostry Going Forward given the type of recession . Wouldnt talk about the opportunities. There is tremendous action providing opportunities. Objective to make sure theyidmarket companies, got the Capital Market wide open. Steps,the appropriate talking about the real economy, with the across Europe Market being wellcapitalized. We know European Companies have been historically undercapitalized. Tend to forget and so i tonk the opportunity will be to make sure the european up wills, the cross have the appropriate capital base to start this new cycle. Need an effective scheme so people can get access and so people like us, a great opportunity to be a solution and part of the plan to start the economy. Worry moreo you about how deep this recession the be or how difficult uncertainty will be . , is certainly not over would say the crisis, we had the shock of supply demand and global trade put on hold, now its going to be effectively about seeing who you can make it through these and yes theres going to be some corporate agencies,the rating thats the one benefit of a public rating. Be theret to will be some, this is the good news there has been so much capital and money generated over the past 10 years its about directing this inventory of savings, the stock of money into the real economy. To thetrong support overall european economy. Thathere is going to be Zombie Company that will probably have to be sacrificed. That will provide a great opportunity to consolidate the thats ceramic stream the optimistic. Coming up there is also more left according to the fed. The fed chair says he will use all the tools available to get the economy back on track. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. The fed chair jay powell says the bank is prepared to use the full range of tools available. Economyis confident the has whether these events. Theyve already launched unprecedented support. Powell is scheduled to appear before lawmakers for a special hearing. Worry about the specter of negative rates . Accumulated,ebt what does it mean longerterm for the Financial Markets . Ironingry a lot because , the lower the rates go come we in know why thats happening the coordinated action of the central bank of the past few months. Nowadays youve got some Investment Grade corporates zero and you to on the onetral banks hand its great because effectively its creating the crating a newdity , we knowt we in turn never ends well. I guess so be more when they say we have to be grateful of action total should not have know andium we all , then youave this know you are creating this next bubble. Francine its taken years to understand the consequences of what 08 were. Aroundwiser this time about some of these longerterm unintended consequences . I hope we are. Cycles, thise the time around financial muchtutions and banks in a more robust position than the last time around. Some complaint about the regulation being too harsh on them. Newsm line that was good because right now they are very robust Financial System at least at the beginning of this crisis that enabled them, you have all these backstops of liquidity being provided to focus on europe, some state guarantee which is great. We have to be mindful not to create some kind of synthetic nationalization of bank because effectively the states start to guarantee to back guarantee any , on top of that that is when i start to get worried. We think there is plenty institutional investors, asset having 100 d not transfer. Francine where do you stand on these questions versus the inflation debate . It seems to be occupying a lot of economists and participants . Should we just not care because this is a problem a long way out or will it change how you view your portfolios . There are two questions here. Inflation is a very complicated debate. Construct your portfolio, you need to have the cheapest option embedded into this. Everything we are trying to capture the premium and putting corporate with some kind of reliable floor. Generate the out Fund Investors are expecting us to. It should create a longterm inflation indexed, you create a very appealing investment opportunity, so in that environment that is how we are trying to push the portfolio. Down some protected investment thetegy, when you see nasdaq up 3 yeartodate, you notice something there doesnt add up looking at the headlines in europe. Francine thank you so much for joining us today. I hope to speak you hope to speak to very soon. Ing up, maderaa to fromspeak bloomberg intelligence. This is bloomberg. This is bloomberg. Francine this is bloomberg surveillance. The global race to find a turnne, the drug from my moderna looks promising. The news sent shares to record high. While the chief executive told bloomberg the Company Plans to take the vaccine into phase three testing july. Phase threenalizing which we are hoping to start in july of this year. We are finalizing as we speak with the fda and we think something at the something in july is our plan. Francine joining us is sam to sally is sam. How close are we to either moderna or someone else finding a real breakthrough . For the kind words, i appreciate them. Are weve got here incredibly early data, im a bit surprised the company chose to release it even. Weeks theytwo wouldve had much more data to share with us. Essentially the key thing they want to achieve with a vaccine is what are called neutralizing antibodies. You give the immunity to the patient thats able to neutralize the virus. They show that in eight patients , the neutralizing antibody levels theyve seen are the same as what they say theyve seen in patients blood and plasma whove recovered from the diseases. That is good but it is very early data. Sometimes with very small biotechs, at this kind of level its promising but it is still early days. Francine in terms of timelines what do we know if this is really promising . Summer by mid summer will we know how much it can be reduced . Produced . This is a little bit like a small step for man, giant leap for mankind. Timeline with the shows that phase three which is the 10,000 odd patient file will when by july and thats then youll have more data. Now and the beginning of that trial we will have data from 600 more patients. Francine thank you so much. Francine this is bloomberg surveillance. Lets get straight to bloomberg first word news in new york city with ritika gupta. Ritika the e. U. Is a step closer to a major rescue package. Angela merkel and Emmanuel Macron have agreed to a 500 billion euro plan, and it includes controversial joint e. U. Borrowing that germany has in the past shied away from. The plan is still only a foundation. The final deal would need backing of all 27 Member States. In the u. K. , pressure is mounting on Boris Johnson to be more open about his coronavirus strategy. A panel of mps is calling on the government to publish the scientific advice behind the response to the pandemic, amid criticism that relaxation of the lockdown has led to confusion of what people should and should not be doing. The Federal Reserve is ready to lead the lending rate until the economy is back on track, according to Jerome Powell, the comments and testimony in preparation for a g central hearing today. Now the worlds fastestgrowing coronavirus hotspot. The south american nation accounts for 13 of all new cases in the past week. It has overtaken the u. K. With the thirdmost coronavirus cases behind only russia and the u. S. He comes amid a political crisis as the nation has no strategy to slow the spread. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in im than 120 countries, ritika gupta. This is bloomberg. Francine . Francine thank you so much. Lets focus on the business of equality. Will dealing with the challenge of coronavirus have a negative effect on companies fostering diversity . Researcher from the correlation between leadership, diversity, and financial outperformance. In an exclusive interview, these facebook the facebook coo says women are taking up a disproportionate mount of work from home during the pandemic. Women work a double shift before coronavirus, and data last week is showing clearly that women are putting in a doubledoubleshift. The average heterosexual straight couple right now, the working 71e woman is hours a week, doing childcare and housework, in addition to a fulltime job. Men are doing 50. That is 21 hours a week. That is not a fulltime job. Isnt it time for men to lead in to lead in and to take to lean in and take as much of it and account for women not completely burning out, which we are already seeing . Francine joining us to discuss this is vivian, at the forefront of spearheading loads of important initiatives. A couple of findings that you have put through, basically saying how Many Companies have gender diversity, have an impact on the bottom line, and which ones had to do better. How worried are you that covid19, that this crisis, that this recession, will actually make us go back in terms of all the efforts that have been done in a lot of companies in terms of diversion and inclusion . Foremost, covid is a humanitarian crisis for all of us, affecting our lives and our livelihoods. But what are data increasingly shows, and certainly the comments from Sheryl Sandberg reiterate, that it is a double shift in terms of the health and economic burden, but also a double vulnerability for the most vulnerable populations, and those are the populations that are most likely to have jobs at risk, be they Frontline Health care workers, which are disproportionately female or disproportionately ethnic minorities, for example in the u. K. Or the u. S. , and also Higher Health risk. While we are encouraged that Many Companies are still committed to Diversity Inclusion coming the data, including the recent report, mistreats it Still Matters to performance. We have to be very careful because we know that we could lose progress during the recovery phase of the covid crisis. It is important for all of us to be focused on those goals as we think about how to respond and how to recover. Francine in your finding, vivian, there is something in companies you found in the top quartile for ethnic and Cultural Diversity on executive teams, were 36 more likely to experience above average profitability than their peers. Our chief executives aware of this, and if they are, does it mean that in a recession are chief executives aware of this, and if they are, does it mean that in a recession everything in life, the report is very clear that a thisger business page is a fiveyear longitudinal look at the data and the largest study on gender and ethnicity that we have done. The Business Case stronger and the progress is slow. If you are in one of the diversity winners that you described going into this crisis, among the 5 or 15 of companies who have made progress, it is likely many of the practices that will keep an of different aware populations, if you have not made much of progress in the last five years, the initiatives have not yet taken hold, you may have weaker muscles in terms of how to respond to the crisis. That said, we think there are actions all companies can take. The good news is in over five years, 80 or 90 of Companies Say that inclusion in diversity is a priority. That said, many of them have not made as much progress as we would like. Women as well as vulnerable populations suffered disproportionately. Covid is of a much more significant scale and will reach much more deeply in economies and households so that the risks as we move backward in terms of representation because of job security, perhaps frontline jobs, clerical, retail, hospitality, the impact of automation as we recover from this, disproportionately impacting those vulnerable jobs, means that for some women and ethnic minority populations, the risks coming out of covid are still quite high. Francine how are u. K. Companies doing compared to other companies . Are they doing better or worse in terms of diversity, inclusion, and representation . Hasan progress in the u. K. Been relatively good, and there has been much on transparency. When you look at British Companies represented among the diversity winners and fast movers, those companies that have made progress in the last five years, there is good representation, and we are pleased that many comedies are taking a systematic approach. The majority of companies are not making as much progress. Inut a third of companies those two categories have made strong progress. The majority of companies are either in what we would say making less progress either holding slack where where they where they were five years ago or moving backwards. Business case is strong. Companies moving on this topic proportionally see the benefits. Highperformance committees do many things well, but there are still a good 50 or 60 of companies that have much more to do. Personally, as well as in our analysis, believe that the Covid Response inclusion and diversity as they recover from this. Both because of the representation and job profile, but also the opportunity to improve inclusion. If there is an opportunity to take advantage of this unique moment of our aligned purpose, sense of humanity, sense of purpose in business, this is a terrific time to think of how inclusion for all employees would really be a way in which Companies Come back stronger, come back with maybe Smaller Companies that may be restructured, they may have survived shocks, but it is an opportunity to use some of the lessons learned, and the pain we have all gone through with the covid crisis that builds back a better culture for all employees. Francine vivian, thank you so much. Partnerunt, managing for the u. K. And ireland at mckinsey. Going to what we have talked about with all the extra stimulus and what Central Banks can do in terms of enlarging its balance sheet, we will follow the boj closely, what it means, from 9 00 a. M. , on may 22. President trump says he will cut funding to the World Health Organization. We will talk about that next. This is bloomberg. Francine you are watching bloomberg surveillance. Im Francine Lacqua in london. President trump is taking the antimalaria drugs he has promoted as a treatment for coronavirus infection, despite government warnings that hydroxychloroquine can cause serious side effects. The president says he has been on the drug for about a week and a half. Pres. Trump and a lot of good things have come out about hydroxy. A lot of good things have come out. He would be surprised at how many people are taking it, especially frontline workers. He frontline workers, many, many are taking it. I happen to be taking it. I happen to be taking it. Hydroxychloroquine. Right now, yeah. A couple weeks ago, i started taking it. Francine meanwhile, President Trump escalated threats against the World Health Organization over its handling of the coronavirus pandemic. For more, Annmarie Hordern is in new york for us. Ann marie, it was confusing at times, and no one was expecting him to be taking the drug, but first of all, what does the president say in his letter to the World Health Organization . Annmarie we had a divergence between beijing and washington. Xi jinping first addressed the world health assembly, and he was talking about the fact that he backed the w. H. O. , and he said if china was able to come up with a virus, he would make it available worldwide. Hours later, donald trump, by his twitter account, released this letter to the w. H. O. , and it is really just a list of grievances, and the administration talked about the agency must demonstrate independent from china. This is really the bombshell. At the end of the letter, he said, the World Health Organization does not commit to i will make my temporary freeze permanent. That really escalates the drama between the administration and the World Health Organization. He also talked about the fact he cannot allow american techs. Dollars to continue to finance an organization that does not serve american interests. Analysts are saying that trump has really been lashing out at the World Health Organization, and china, because he has been criticized because of his handling of the pandemic, and we see that reflected in the polls as well. Francine what about his use of a drug that used to be used for malaria . Annmarie this was an offhanded comment that he made to the press, hydroxychloroquine. The concern is that medical experts say that if you have covid19 and you take it, they are unsure about the risks and it can be harmful. But when potentially used by a healthy person, there could potentially be no harm. President is saying he has taken it for a few weeks or so. He did not directly linked to this. We know last week a white house official was diagnosed and tested positive for covid19. I have to say, the World Health Organization last night, talking about this drug hydroxychloroquine, this risk overshadowing a big political story also developing in d. C. , and that is the ouster of the state departments Inspector General. Press conference, he said it was mike pompeo that the inspectorust general and he did it. Now mike pompeos staff has come under fire. There is a lot from the d. C. New cycle to keep an eye on this tuesday morning, francine. Francine thank you so much, Annmarie Hordern in new york. Coming up, italians are being urged to never give up as the country starts rebuilding its economy. Our interview with the founder of the project is next. This is bloomberg. Francine economics, finance, and politics, this is bloomberg surveillance. Im Francine Lacqua and london. Lets focus on the rebuilding efforts. Italians are being urged to never give up. The campaign is raising funds for the red cross and has won across the country. And has wonct the support of celebrities across the country. Our guest joins us now on the phone. Thank you so much for joining us on this initiative. First of all, how difficult is it to get people who are going through a tough time financially to give to the red cross . This is a hugely important campaign. Has it gotten the metrics that you wanted . I amrst and foremost, extremely, extremely happy of the reaction of the campaign. We did the campaign in italy, in portugal, and we raised more than one million euros. We raised tons of food for both the countries. We are now giving our services and independent years foundations to ward to award other countries. In europe and not in europe. My objective as an entrepreneur is to become an entrepreneur of solidarity because i do believe that this time now key in this topical moment in history, to show that it is the key to our present and our future, and helping to support people which are in need. It is essential and key. For me as with each and every human being, and i believe everyone can make a difference. With this campaign, we started making a difference in italy, and the campaign is still ongoing. We started and we made a difference in portugal. We are in talks with other countries like spain and brazil. And we are, how you say, looking up a team which last sunday with independent and other people were really supported b were really supportive because the always is that there are going to be more people more poor people around the world that are in need of food and are desperate, and it is my aman goal to create an entrepreneurship of solidarity. So in each and every step i will take as an entrepreneur and a philanthropist, solidarity will everything i will be doing from now on in the future. I started in 2016 with the foundation, and our objective and and our goal is to help support people in need all over the world with our services. And with whatever we can do for them. Francine we were looking at some of the images together from your impressive campaign. From thecelebrities world of sports. We talk about a lack of solidarity amongst states around the world in foreign affairs. Do you think there is solidarity within the Business Community between celebrities enough in italy and elsewhere . Have seen, and i from what i am doing, i can say say, anre is, how you opening up of the heart in and, how you say, the soul of many people come and this is what i am seeing from many celebrities and for Many Companies. I can speak from my companies. My companies will all be, how you say, from now on, whomever will be working with me, lets say come on my business, like , walt like the rinaldo disney, others. Of solidarityse come with my foundation, it is obvious it is philanthropic, so everything is, how you say, to help and support others in need, but also vmi businesses, i want to create an entrepreneurship of solidarity. So whatever i will be selling i wear or else there will be eyewear or else, there will always be a supportive foundation. I believe that the key and the essence today is to be more united than ever to support in each and every way we can, and this means that there is people like me who have the opportunity of visiting connections with people around the world to do, how you say, things which help and support countries and the people which are in need. But, you know, everyone can help. You can help with one euro, you can help with a smile, you can help with it is not a matter of how much, it is a matter of doing it, and i believe that, how you say, giving back and supporting people which are in need is the key to the future of our planet. It is not the key of the future of italy, of france, of england, or america. It is the key to our planet and two, how you say, also a new attitude, a new behavior as human beings. And as entrepreneurs. Yes, sorry francine how worried are you that this recession is going to hit businesses really, really hard . Willorried are you that we lose solidarity in three years . Has the government done enough to support people and businesses . Lapo as an entrepreneur but also a human being, i will give you an answer as an entrepreneur and as a human being. As a human being, i believe it is urgent, necessary, and a duty to help and support people which are in need. And that is why i define myself an entrepreneur of solidarity, because solidarity is the key to getting back on track and understanding that who has, has to give back, has to help, has to support. As an entrepreneur, i believe that the world is changing, and i believe that whichever sector field you are working on or working upon, things will change, things are changing, and if you do not think outofthebox and do not think that things are going to change, the big risk is that you will go bankrupt. Im sorry to be so abrupt and so direct, but the reality is that it is not possible to think as we rethinking before covid. Francine thank you. We are unfortunately out of time. But i would love to speak with you very soon, and well done on a great initiative. That is it for bloomberg surveillance. I will be joined by tom keene next and we will have a full round up your markets. This is bloomberg. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Francine coming together chancellor merkel and president macron back a 500 billion Euro Recovery Fund for the European Union. The deal still needs full support of all e. U. Countries. U. S. Drugmaker moderna soars after positive results on a potential vaccine for coronavirus. It is raising 1. 3 billion in a share sale to fund the development. We will talk the race for a vaccine. And jay powell will tell the senate the fed is prepared to use its full range of tools to support the economy, this as traders bet the u. K. Will have negative rates by year end. Well, hello, everyone. This is bloomberg surveillance. Im Francine Lacqua here in london. Tom keene in new york. And people say that micron and merkel that macron and merkel front run the commission with the 500 billion euro fund, but the excitement in the market was pretty shortlived. A lot of folks on moderna and the bizarre press conference, President Trump when he was talking about taking hydrochloric between. Hydroxychloroquine. Tom really, front and center here, besides the extraordinary market activity, francine, is the president s detailed and specific letter on the World Health Organization. I read the entire letter. It is an extraordinary document. Francine we have a bit of data. First of all, i would just point to the fact that if you look at car sales for april, they were unexpected, but still a 78 drop something we need to mention. Expectation, they have risen. The estimate was 30, they have come in at 51. Hat is quite important lets look at first word news in new york city with rithika good to. Ritika gupta. Ritika fed chair Jerome Powell says the fed is paired to use its full range of tools. Remarks prepared for his virtual hearing today before the Senate Banking committee. President trump is taking the antimalaria drug he promoted as a treatment for kohler in a virus infection. That is despite coronavirus infection. It is despite the warning for serious side effects. The president says he has been on the drug for about a week and a half. Vice president mike pences press secretary tested positive for coronavirus on may 8. President trump stepped up his threat against the World Health Organization, vowing to criminally cut off u. S. Aid unless there are major reforms. The president sent a fullpage list of grievances to the w. H. O. He issued a previous demand that the World Health Organization operate independently from china. A package to help the e. U. Recover from the coronavirus pandemic. Angela merkel and Emmanuel Mack ron discussed the plan by videoconference. Countries that have been hit hardest by the coronavirus will additional borrowing. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries, im ritika gupta. This is bloomberg. Francine . Tom . Tom thanks so much. I want to look at the markets after that big day yesterday. Im going to call it a churn and looking for the next bout of guidance. It is important to go to the levels right now on futures. The vix 29. 45. I dont importantly the swiss franc ever stronger over the last i note importantly the swiss franc ever stronger. I dont know what it signals. Safe havens are not bid this morning. Francine . Francine im looking at u. S. Futures, down, european stocks also down. The move that kicked off the week that is now fading. Treasuries and european ernment bonds are calling we heard the news from Angela Merkel and we heard from president emmanuel. Joining us to talk about Recovery Funds and all things periphery is john milton, jp morgan asset management. Say all things periphery, i mean it kind of took people by surprise. The figure is good but you also need the support of other countries. John first and foremost, lets look at what it actually represents. It is a game changer. The fact that weve got the European Union pulling together in a cohesive way, led by the ever important Franco German access axis is a signal, i think. About the durability of the euro, the reality is that it is a common intent, and that is an important thing to get across. The fact that it is using the budget of the European Union at lets face it, this is a Major Economic block locally, suggests the notion of being stronger together within the European Union is very important. Some of those doubters come with some of those who feel it is important to attach a breakout risk premium similar to periphery spreads or the euro itself, perhaps this is a statement to my mind that should give them pause to reconsider that a little bit. Francine what does it mean for your appetite, john, for maybe some of these bonds . It seems like there was that mishap from the ecb president saying they are not here to close it seems Angela Merkel and Emmanuel Macron may be closing spreads. John the price action we saw and some of the periphery bonds yesterday is probably a reasonable indication. Uncertainty associated with some of these spreads at the moment, and i think that we have to reflect the differentials in Credit Rating between the individual sarin borrowers, but by and large i think what it does is provides a level of support. It underpins the allimportant Monetary Policy support we have seen coming through with the ecb, qe, and with the broad support being provided there. I think this is something that differs a little bit from the euro zone crisis back in 2020 through in 2010 320 12, demonstrating the fiscal coordination alongside Monetary Policy in europe, and that is something mirroring other countries. I would feel this is a net positive. It clearly is going to have to go through ratification from the other Member States as well, but i think i would treat it with a level of optimism. John, good morning from new york. Yesterday was absolutely extraordinary on a multiasset basis. Has the boat left the dock for the bears, those afraid, those cautious . Have they missed the easy mon ey in a bull market . John what is important to recognize is that these things take multiple years to develop. We are in a period of uncertainty, so even though i know you mentioned the vicks in your opening comments it is still nearly 30, suggesting markets are pricing for a couple percent up and down day to day moves in the u. S. That suggests we are in a more volatile environment. Those looking to enter markets may have their opportunity. We are getting a lot of cross currency news flow. What is important to focus on is the longerterm, and that is to recognize that they are ultimately ultimately we are seeing some data from countries that were early in dealing with the virus, places like australia are beginning to look better. Evidence of some data points looking a little bit better. And certainly we have seen analysts move to markdown earnings very quickly. So as a result, i think we need to look forward and recognize that as we begin to inch our way toward recovery, it does make sense to be able to think about where it is appropriate to add risk. These are volatile times. The markets will be choppy, so as a result, entry points will likely present themselves. N tell me about tom tell me about International Investments. Is International Investment something you acquire a portfolio longterm, or is it lets get going, internationals q2,going to move here, to q3, and q4 . John yesterday was an interesting day toward some of the smaller caps, value stocks, behind,the left tim and that is encouraging because you want that to pick up. Over the intermediate term, and we are thinking 3, 4, 5 years from now, we would expect that with combined fiscal and monetary support, we potentially a morescope for reflationary environment than we saw in the last expansion, possibly steeper curves, which would naturally support different type of leadership within stocks. A little more tilt toward value, a little more tilt toward international. To be clear, it is not going to happen overnight. But those building a longterm portfolio should certainly be looking at valuations and potential that places around the globe could play catch up with the u. S. , which clearly lead in the last cycle. That is something we would be thinking about as we build our longterm outlook today. Francine where do you see the most value, john, overall, if you had to choose one thing right now . Where would you put your money . John i think what we have to do right now is recognize that what we learned from the last crisis was to think about, dont fight the fed, dont fight the Central Banks. First and foremost, a level of balance in a portfolio. It is too soon in the middle of a clear day, a clear recession, to abandon all the safe havens. The fact of the matter is, bonds are still going to give some support. The fed is buying Investment Grade credit. As you begin to build risk in the portfolio, look at where the policy support is coming in. Perhaps around periphery bonds. Equally, as we look to build in growth in portfolios, the emerging markets are in an area are not necessarily performing because of the trade war we had , and thee last year back end of 2018. Certainly there are parts of the market, things like the early cycle cyclicals, where we would expect when the recovery kicks in, those are going to be the kind of stocks and sectors that will lead. Building a balanced portfolio is key. Dont ignore your safe havens, and look for those sectors and those regions which are going to get the kicker as we start to see the market focusing on the recovery part rather than the immediacy of this current situation. Bilton of jpn morgan stays with us. Later today we will speak with bank. Deral reserve eric rosengren. This is bloomberg. Tom good morning, everyone. Bloomberg surveillance. Interesting news flow. Earnings out later, home depot, walmart out as well. We are looking at lots of pandemic news around the world. Brazil having a really tough go of it. Right now we continue with john milton. He is with jp morgan. John, john bilton. He is with jp morgan. John, one of the questions about multiasset investment is that multiasset known as the big American Technology revenue growing, almost monopolies. What do you do with them forward . The large techof presence, well, look, it is not just the u. S. That has a big tech presence. Lets be clear. Theu. S. Has clearly lead charge for some of the major Silicon Valley names. Places like china, the emerging markets more broadly, they do have a Significant Technology presence. Remember, technology is not just software, zeros and ones. It is the cutting edge of innovation. What we should be doing thinking about technology in the future is, what is the new new thing . Things like green energy, things like renewable transportation. These are as important pieces of. Echnology as software or ai i think recognizing that a Technology Portfolio needs to have exposure not just to be also to have new things is super important. How diversified is diversified right now . Within the equity land, a million years ago, you owned 300 stocks like you own 300 bonds. But then it has come down sequoia, fidelity, etc. How many stocks is appropriate for a portfolio to get sector diversification . John i think that will depend a lot on the way in which you construct the portfolio, but the regional diversification, which many folks have looked at historically, there is an issue with that is the natural case and we see that in sectors as well. That is one of the reasons why increasingly we are seeing investors, multiasset investors think about diversification across factors, across different parts of the value chain, across owning equity in different ways using private assets and alternatives to get different types of exposure. I think that the challenge, not that we have got this concentration, which i think is a well flagged issue, but it is recognizing that there are many more levers to diversification available today. If we think about things outside the traditional, regional, or sector framework and think across ways in which we can invest, and across themes and. Tyles francine if you look at regions, where will we see the practice recovery or the strongest recovery . John a lot of that depends on the extent to which we see good deployment of the fiscal spending that is being unleashed today. Clearly we have had this massive infusion of support coming around the globe, and it is little surprise that we have seen some of the winners of the last cycle really catch bid, the safe names, etc. But i think if we look at recoveries historically, it is typically the more value like names that the early cycle cyclicals often catch the bid first, and that seems to interestingly fever regions such as the emerging markets in places like europe, which in the last cycle, were left trailing in the wave of the u. S. Equity market. But there is massive diversity, strength, which means no one should be looking at stocks io stock portfolio with looking at where we see some of the recovery coming, recognize that this is this has been a servicesled low down, which is unusual. We have already had a trade war, which withheld activity in the goods and manufacturing sector. Pentup demand is likely to be experienced first in that sector, and that lends itself a little bit more to markets perhaps like the emerging markets, perhaps smaller caps within the u. S. , and of course europe as well, which again has a little bit more of a goods and manufacturing bias to it. You mentioned the trade war. What are the chances that there is a second bigger trade war, and what does that do to your projections . John i think one of the things that as a market we established during the last one in 2019 is that the level of tension that we have seen around the globe is not something that is going away. We are here for the longhaul, and understanding how the world a shifting adapt to in the economic order i think is very important. Periodic rhetoric . We are seeing that at the moment. I think it is something investors have learned to calibrate. What is crucial is there is a tail risk. I think this is something that might have been forgotten by markets as we focus clearly on the coronavirus issue. So the trade war has not gone away. It has simply moved to a different phase and it is likely to exist for some time, but i think that is something that potentially creates a left tail risk. Ultimately, what we saw from the last one and what we should continue to recognize for the future episodes is that ultimately finding a resolution, finding some way forward and allowing some level of global trade flow is better for all involved, and that sort of law of economics is ultimately something that will guide us. Tom john bilton, thank you so much. Coming up later today, this is an important interview david westin in conversation with Brian Moynihan of the bank of america. Really could not be better times. Please stay with us. From london, from new york, this is bloomberg. This is bloomberg surveillance. Lets get your Bloomberg Business flash. Moderna hopes to pay the manufacturing of the Coronavirus Vaccine with a share sales. Directing 1. 3 billion dollars. 20 es in modernia jump to yesterday. Softbank is close to a deal to sell about 20 billion of stock in tmobile. The Japanese Firm is speeding up efforts to raise cash. Softbank is reporting an almost 8 billion loss in its investment business. The firm would share tmobile shares to telecom. Bed again on a short struggling rental car giant hurts. By buying credit default swaps. It has unwound the trade in recent weeks and now apollo has hertz bonds. That is your Bloomberg Business flash. Thanks so much. Equities, bonds, currencies, commodities. Dow down, the vix getting back to 30. What is interesting is the safe havens really come up. Swiss franc weaker. Old weaker as well. Brent crude near 35 a barrel. Francine . Francine i am spending a bit of time looking at european bonds, actually also invest advancing while gold reserves drop. Im also looking at the Recovery Fund. Inspired risk appetite, then we have dropped back off. Sterling strength thing after the u. K. This morning announced lance for 30 billion pounds in tech cuts after that plans for 30 billion pounds in tech cuts. Wti, what it is doing. With a world speak Economic Forum managing director about the economy and the response to covid19. This is bloomberg. Good morning everyone. Leaders need to do more to secure rac to secure a swift recovery. Some of the top concerns include political disruptions over the next 18 months. Joining us to talk about this is Saadia Zahidi world Economic Forum. You also spearhead a lot of diversity and inclusion efforts as well as the Economic Forum. I spoke to you about what kind of recession we could see and how various countries are doing. What can they do more . We have a number of furlough programs, a number of things trying to take care of people who lost jobs, what are you asking them to do more . Saadia what we tried to do with this study is essentially intervened a survey. To start developing a picture of what is the risk that are about to come . Not just the current emergency and the stuff we all know we what is but is happening in the next 18 months . Youre starting to see interdependencies coming through. A number of them are deeply concerned about cyber risks because of the rapid adoption of technologies that have just occurred across over the economy , schooling systems, job markets. That is the type of thing that is emerging. Another aspect is the risk of longterm unemployment. We are starting to see some shortterm support through workers, through furloughs, is this going to be enough . Inwe have the types of plans place for industries we know are not going to recover soon . Our governments aware of the longterm consequences . Have they learned anything from the crisis in 2008 . Does that inform their memory of how to deal with this Current Crisis . Saadia i think the speed of the response has been remarkable. We are hearing from industry , that thecademics speed and size of the response has been remarkable. What we have not necessarily seen enough of his more targeted responses and more nuanced approaches. Everything but the kitchens approach as this continues. Think about more nuanced approaches, start thinking about managing this for a year, year and a half instead of a few months. That is new when it comes to the job market and how to manage the return to school. That is missing when we think about where does the new sources of growth come from . To be focused more on health care . Rid of the Industries Come from . All of that is going to acquire more planning we are not seeing. Is what is great about this the world Economic Forum is going to have its own test tube of everything but the kitchen sink. You were going to have to explain social distancing at the piano bar or the espresso bar inside congress. What are we going to do about the tactical realities that the clients of the world Economic Forum face like getting people up and down elevators . Are spending a lot of time on the return to work. We just built out a Massive Community of chief Human Resources officers. That is the function that perhaps has been ignored. We are starting to see how critical it is to have in place an appropriate method on how to manage remote work, hybrid work, how do we bring people back to physical offices. How do we ensure they have the equipment they need to work remotely over a longer time period that we know is coming . Spending a lot of time working directly with industry leaders, not just working on how do you build better in the long term, but how do you today deal with these concerns, things that are unfolding now . Theres a lot to be learned in different regions. We know a number of businesses that have activities in asia have experimented with some of this. Transferring some of those lessons to europe in the united states. That is what we are spending time trying to do. Deoffice . Going to aadia we are going to see heavy trend toward automation. The Fourth Industrial Revolution has arrived. Is there a risk of overcorrection . Our business is going to be so concerned about their workforce, they overcorrect and take too many processes for the remote side of things, or try to replace offices. There is that risk. A number of chief risk officers are worried. It is starting to become clear that in the short term, there is a trend toward remote work and a trend towards trying to shed as much as possible the security concerns that come with physical office spaces. Because you have done so much work on diversity and how the workplace needs to howge and gender equality, will this recession impact that . . Ill be take a step back saadia that is an interesting question. As we build back new types of organizations that need to have greater resilience built in and more ability to scan risks, it is clear diversity helps because you have a more diverse point of use. That should have more diverse points of view. Possibility that if we invest in greater diversity we can be ready for pivoting factors the next time there is a crisis. Francine thanks as always for giving us your time. Saadia zahidi of the world Economic Forum. Lets get straight to the first world news. President trump is dismissing safety concerns about a drug he is taking to protect against coronavirus. The president says he has been taking hydroxychloroquine for a week and a half. The drugs have warned could have deadly side effects. Pompeont trump says mike askedss him to fire at the state Department Inspector general. Democrats say the Inspector General was looking into an Emergency Declaration that allowed the u. S. To speed up arms sales to saudi arabia. He is also said to have been inquiring as to whether pompeo used an aid to perform personal errands. Pressure is mounting on Boris Johnson to be more open about his coronavirus strategy. Theakers have called on government to publish scientific advice but kind the scientific advice behind his actions. Nasdaq is going to make it more difficult for Chinese Companies to lift on the exchange. New rulesto unveil that include tougher accounting standards. Mention chinese firms specifically, one of the requirements, Companies Need to raise 25 million in their ipo. 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. This is bloomberg. Tom thanks so much. The councilss from on foreign relations. Not only an update on international relations, but Richard Haass on the world. This is bloomberg. Tom futures up 20 yesterday. They exploded up 80 before that. Ofyou heard, in a study eight patient and the president s detailed letter to the World Health Organization, and with all of that was the stunning announcement by the president of the united states, that i believe i can say, he self prescribed an important and wonderful serious drug for malaria and lupus. Advantaged with decades of experience in pharmacy. The physicianrom of the white house that this is essentially self prescribed. What are the key risks someone in the president s condition takes . Scott a side is effect every drug has got a side effect. This one has serious side effects when you take it for a. When you take it for a period of time. I hope that the president has taken sufficient scientific and medical advice to make sure he is not at risk of causing himself harm. Here ist is important thatal experts have stated there are secondary and knock on effects. I read that the risk for is a bad cocktail for anyone taking it. When we see mean the prescription explosion because the president says he supports this unproven therapy . That ship sailed a while ago. When we look at prescription volumes in the u. S. , they significantly increased. I cant remember the actual magnitude. Starting in late march, early april. That has already happened. All of that talk precipitated that. It is worrying where he Prescription Drug is being self prescribed by someone who is in charge, and therefore has a lot of followers. Level ofa responsibility that has to go with that. It is not even proven that it works. Francine i also wanted to ask you about the moderna news. How far away are we from understanding whether they are close to a vaccine . You were telling me they only tested on eight people. The trial actually had 45 patients. But four in eight, each of two different dose groups where you saw the ability saw the ability of the vaccine to neutralize, to cause a neutralizing response to the virus. We need more than that, obviously. N you look at the 15 page do you only up with only 10 people . I hope not. We have not seen any data. There is no data. Rows, there iss, no such thing. Francine are they more advanced than others . Are we going to see another company come out this is promising . Have we seen data from the which was in a nonhuman pilot. That had positive effects but raised questions. There is data out there, but [indiscernible] i am a little surprised how early this data is and how early the company chose to release it. What of the history of ng from eight patients statistically 30 is your core statistic bear, and what is the challenge of going from eight patients to 800 patients . The key thing you want to avoid is safety issues. , that isd of the day the key element of both early stages of development. The risk is that when they are going to a larger number of patients, or even within the group they have already that other side effects show up. That is the thing we need to watch out for. You see some side effect in the data they have reported already. That is the key risk. Obviously you want to keep seeing the same level of activity. Number of patients that are becoming immune that is the next step. , and then how effective is it. Tom thank you. Francine Goldman Sachs commodities research, we will have a robust conversation with him. This is bloomberg. Lets get the business flash. Disney has lost its Top Executive to an app exploding ons exploding popularity. Kevin mir is leaving to be ceo of tiktok. He will also be chief operating officer of the chinese parent of tiktok. Shock, heure is not a lost out in the race to become disneys ceo. Delta airlines is providing a hint there may be an increase in travel demand. The carrier plans to restore hundreds of flights, among them flights from new york to paris. Delta still estimates that for this quarter, capacity will be 85 below last year. Francine thank you so much. Angela merkel and Emmanuel Macron have agreed to support an eu. Package to help the it will be a major stance toward tighter integration. Joining us as a Bloomberg Opinion columnist. I know you heard the news yesterday and too many it was a surprise. Markets rallied initially and then there was disappointment. Is it because they did not get the full support of the other countries come over because we do not know what it will look like . I think a bit of both. It was clearly a moment yesterday. Expectingwe have been this Recovery Fund to be largely centered around loans which would mean individual companies would have to borrow to fund the recovery. Here we are talking about 500 billion in grants. Is france and germany, the largest most important european countries, there are questions to whether everyone would be on board. This isous thing about in theory it is but, germany and france seem to be appealing to other countries and the eu. A lot of details would need to howroned out especially exactly this money is dispersed, where there are commissions attached. Other thing, this comes a week before the European Commission was expected to propose their own fund. What is going on . Germanynk france and are stuck running the commission. I dont think it is a great time for the Commission President they must have gotten somewhat fed up with what was happening in brussels and decided to make their own push. Just two countries. Although we know germany has managed to assert its leadership over other frugal Member States, this time may be different. As we saw, the netherlands have been playing hardball on this Recovery Fund. I do not expect them to change. Have a lot of time, but let me ask a pregnant question. Where does the money come from and where will the money go . It comes from individual Member States it comes from the European Commission borrowing on Financial Markets, and individual Member States will pay back the commission. We dont know what time span, but thats where the money comes from. Where is the transfer element is that the money will be given depending on need. These needs will be different from the share of the contribution. You would expect spain or italy to get more money. That is the structure. A lot will depend on how big these transfers will be and we do not know the size. Joke, its like new york and kentucky. Ferdinando, what are they going to do, write a check . I dont see any mechanism here to be sure funds are dispersed appropriately. , theree is a mechanism are funds in the European Union structural funds which come out of the eu budget and are given out for a number of initiatives. There is a model to be replicated. The commission is going to borrow on the Financial Markets. That is big because it could be the start of something bigger. Which geteuro bonds Financial Markets excited. On top of that is a bigger number, 500 billion. It is something new and important. I would not be dismissive of that. There the troubles are and there are many hurdles. Tom interesting. Thank you so much. Really interesting fiscal attempts in europe as well. What an extraordinary day for the market. Will joinr marangi us. Really an important time to speak with him. Will be with haass us in celebration of his important new book, the world. This is bloomberg. Staying connected your way is easier than ever. Youre just a tap away from personalized support on xfinity. Com. Get faster internet speeds with a click. Order xfi pods to your home in a snap. Or change your Xfinity Services with just a touch. All in one place. Youre only seconds away from all of that on xfinity. Com. Faster than a call. Easy as a tap. Now thats simple, easy, awesome. Tom this morning, facts are dead. A cocktail ofsure good news, a bet on a return to normal. Safe haven this morning still in retreat. Terminatetrump will funding to the World Health Organization. He says that who showed an alarming from china. One chlorine and three, and an oxygen, the president writes his for hc q, noton for lupus, not for arthritis. I have no idea what that is. Also, ambassador Richard Haass will join us. Not on pharmacology, richard ha