Off is also bullish. We certainly have the bulls out. One stock not participating is royal caribbean. They put up a very bad quarter. Interesting, target put up a good quarter. Those shares are trading lower and that has to do with uncertainty around the consumer. They put up a good quarter. There are concerns about margins and will that eat into the strong sales, but will we see the consumer start to move back for Discretionary Spending or will it be all about the staples . To, i everyone you talk spoke to Brian Moynihan yesterday, he said it is all about the consumer. You are a student of the market. Tell me how you tell the difference between a bull market and a bear market rally. Abigail lots of signs, and that is something that has been on my mind. It is probably too early to say this is a real bull market for the very reason that if you work to go back to this time in 1929 to 1932, the initial fall was a decline of 44 followed by a 46 rally and then what ultimately turned into an 87 decline. Lets hope that does not happen. On the s p 500 off the march 23 low, we are up 40 . We have not quite eclipsed that 1929 rally that led to a dark days. Lets not hope that happens. Would not want to see is the sector composition we have today and not just the stayathome stocks. If it is the stayathome stocks that continue to lead, that would suggest there would be more stayathome cannot the reopening everybody is hoping for. David thank you so very much. That is Abigail Doolittle reporting on the markets. Hot rhetoric from president incompetenceinese led to mass worldwide killing, referring to the coronavirus. The question is what did that due to u. S. Chinese relations . We welcome a chinese authority, George Magnus, an associate at the china center at oxford university. Thanks for being with us. You up all of this over the years. Is it more of the same or is there something deeper going on with the way china and the United States are talking to one another . Orge it is pretty deep and pretty dark. Temperature of china u. S. Relations as been getting i do not say a deepfreeze or boiling hot. Either way. Things have been getting progressively worse. You cast your mind back. It was not that long ago in january when President Trump and president xi jinping agreed to a truce in the trade war. Longmay not have lasted under the best of circumstances, but at that point we were still in a frosty environment, but one in which business was still possible and getting done. Ever since then, it has been downhill. Electionpresident ial coming up at the end of this sided. T is not one side as bad on the chinese as the u. S. Side. I think both sides are basically playing a tough game at the moment. David what is the situation from president xis point of view. We saw the numbers indicating Industrial Production have come back your Oil Production has come back, but not the consumer. Retail sales are disappointing. What would it tell us about the resilience of the Chinese Consumer in this rebound . George is a good question. In some respects china offers a window on our own world about six to 10 weeks down the track because they happen to be ahead of us in terms of where they are in this evolution of the pandemic. China between in production and demand. Like, it haslooks been a lot easier for the Chinese Government and the authorities to basically ramp up production to get electricity production and coal mining and steel production, anything that can produce is now running backup almost where it was or slightly above where it was before the Chinese New Year in january. The demand side of the economy, the consumer side is still disappointing. China is starting to normalize, but it is not normal. Part of the problem is huge unemployment. The officially registered Unemployment Rate in the cities is 6 , which is about 27 million people. That is widely regarded as being a chronic underestimate and it certainly excludes about 56 million Migrant Workers who have not been able to return from their countryside to their jobs in cities. Basically, you should think about chinese unemployment somewhere between 50 and 20 . That is a big drag on the consumer. Wages and salaries have been knocked back, partly as a consequence, partly because of weak demand in the economy. Chinese Consumer Behavior is not what it used to be. People are not going to cinemas, restaurants, shops, football is not like it used to be. Timemagines that over these things will short themselves out will sort themselves out if we ever have a vaccine in the coronavirus problem becomes more of a nuisance rather than a daily threat. For the time being, i would say there is a dichotomy, and if companies are producing a lot of stuff and consumers are not buying, then you have an inventory problem which is piling up in the fall. As you look at the state of the chinese economy, what does that tell us about president xis ability to deliver on the trade agreement. President trump is knocking away is not walking away from that. Does president xi have the wherewithal to deliver on buying the things he promised . George we have to accept the terms of that agreement cannot be fulfilled. In the first place, there have chinaeports about increasing its purchases of some u. S. Agricultural products, but basically if you look at some of the big promises that were made in manufacturing, network culture, and in energy, there is no way that china is going to be able to import anything close to billion worth of additional products that were part of that phase one trade deal. I do not think it is churlish this on the chinese side. The economy went through a terrible period during february and march. Fundamental demand in china is we. Is weak. It is starting to recover but it is quite slow. Chinese imports, generally speaking, not just for the United States but elsewhere, have been soft. I do not know. At some. 1 imagines the two point, one some imagines what the two sides will do. Whether call it off or renegotiate it or try something new. For the moment it is not top of anybodys agenda. David just to wrap this up, it is not just the economic side, it is the geopolitical side. We had mike pompeo congratulate the president of taiwan and china reacted very lightly to it. Tochina reacted virulently it. That is a sore subject. In todays climate of titfortat and nationalist to any overture the white house and the state department certainly understand well the sensitivity of taiwan from a chinese point of view. If they are going to make or if they have made overtures or pleasant noises to the president of taiwan, certainly there were behind a move to try to bring taiwan to observe the status of the World Health Organization recently. They know this is calculated to cause friction, much as the chinese also know how to cause friction for the United States. That is the sorry state of where we are at the moment. Lowtenor of relations is so antitrust relations have evaporated so much. Mutual teasing that is imagines andone hopes that at some point the grownups will come into the room and try to solve this. David one hopes. Always a treat to talk to you. That is George Magnus of the china center at the oxford university. Coming up, well talk about the president ial that against the state of michigan deaf president ial threat against the state of michigan over absent president ial threat against the state of michigan over absentee voting. This is bloomberg. David welcome back to balance of power on Bloomberg Television and radio. It is time for first word news with mark crumpton. Mark thank you. President trump says he may schedule a meeting of the group of seven nations to take place at camp david after having canceled the inperson gathering to the coronavirus pandemic. The president tweeted he is considering a move now that our country is transitioning back to greatness. The event, originally scheduled for june, was said to take place at camp david but in march the u. S. Said it would instead be held by videoconference because of the coronavirus outbreak. The Trump Campaign is reportedly recruiting doctors to publicly back the president. According to the associated press, these doctors would say the economy needs to be revived as quickly as possible without waiting to meet safety benchmarks. The campaign confirms it is signing up doctors good it is not saying when the initiative would begin. The European Union is signaling it will not punish member countries for breaking the blocks deficit rules to tackle the coronavirus. It may link their access to recovery funds on how will the countries follow advice on how to manage their budgets. Every country has broken the deficit limit of 3 of gdp and spent money to Keep Health Care systems, businesses, and jobs alive. Boris johnson says the u. K. Will have a track and trace system in place by june 1 capable of dealing with 10,000 new Coronavirus Infections a day. The Prime Minister set a system of tracing infections is essential to lifting the u. K. Lockdown, answering questions in parliament today, johnson said the government will hire thousands of people to help with the effort. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. David . David thanks so much, mark. President trump is on the warpath, this time it is about absentee voting, threatening and a tweet to cut off coronavirus eight to the state of michigan because the secretary of state mailed out absentee ballots to all 7. 7 million residents. We welcome our bloomberg political contributor, rick davis from stone court capital. Great to have you back. It looks like there is a real brouhaha because we have nancy pelosi saying she wants to put into law that everybody will vote by mail in november, and the president will have none of it. Rick this battle has been brewing for some time. In the debate over the cares act. Congress put in 400 million of election support knowing that in some states we would not have restrictions lifted in time for the election. They were finding ways of supporting that. I think the president is picking a fight with a statewide secretary of state who controls the election process in michigan is pretty unusual. You typically try to pick your fights carefully if you are the president of the United States. He tweeted out a strong attack that was a personal political attack but also inconsistent with what she is doing. You to havelow absentee ballots in michigan, but what joyce benson was doing was saying we will allow you to apply for them. She is sending out an application for those ballots. Maybe trump was not well informed. Maybe he just wants to pick this fight. You see this happening in michigan. In nevada, similar thing. There is an effort in texas to limit the effort of vote by mail and the courts. This will be preliminary to the general election in november. Think this is because the president thinks this appeals to his base, that people in the state of michigan, which he needs desperately, will side with him on this issue, where there is there a question of who will end up voting . Rick there has always been a stream of republicans, usually very conservative republicans who do not trust the government. They show up on election day. They are not the states that have early voting or absentee voting. They never want to turn their ballot over to the postal service. There is a strain within the Republican Party to not trust government apparatus. Of course we know donald trump appeals to those voters. There is also been a storyline, and it is pretty much just a storyline, not supported by fact, that you empower more voters who are democratic voters if you allow vote by mail that otherwise. All of the states that have vote by mail have been a good test case, there is no clear indication that is the case. It may be he is acting to rile up that right wing base of his. It may be he actually does fear that it allows broader participation, potentially more democratic vote. In states like michigan and nevada, those will be hardfought states. They will be targeted in the general election. He probably cares about trying to control the balance as much as he can. David give us some sense of where the races overall, and specifically on the question of joe biden and his pick of a Vice President ial candidate. A lot of talk about that. You have some experience with picking a candidate and getting a lot of attention. Is there somebody joe biden could pick who would boost his campaign . Rick sure. As you and i have spoken in the past, when you pick a Vice President , if your head in the polls you pick one who can help you govern. If youre behind, you pick one who can help you win. I think biden has the dual problem where even though he is ahead in the National Polls and ahead in almost every targeted state, he is not ahead enough to have the confidence he can pick someone who can government and does not need does not need to add anything to the ballot. I suspect the Biden Campaign will be trying to find somebody who can help them win in those targeted states. We know the battleground will be fought and so now the question is which woman will matter the most. Typically campaigns have already started that process of diligence, where they get a list of a dozen or so candidates and they Start Testing them with polling in states, with the key constituencies, and see who does well. That usually result in a shorter theyt of candidates good can narrow down a larger list to half a dozen or less over the course of the next couple of months. That will be the primary objective. That is a more scientific approach to the calling process. Process. Culling a lot of it is who will be the best able to government. Who has the best ability to contrast with trump and the current administration. They would get to all of that over the course of the summer. David always great to talk to you. That is rick davis from stone court capital. Coming up, we will talk about the airlines. There may be green shoots. We will cover our stock of the hour next on Bloomberg Television and radio. We think in june there will be more demand for flying. We are very cautious, but we expect to fly our june schedule between 70 to 75 down of what we normally fly, whereas in may downre flying 85 to 90 what we normally fly. The jetblue ceo speaking earlier today to Bloomberg Television. We will stick with airlines because just like jetblue other airlines are seeing some hope, including delta which is our stock of the hour. We turned to Abigail Doolittle. Abigail there are signs people are taking to the skies again, maybe not in the way we used to fly but well off the bottom in april, similar to what the ceo of jetblue was just saying. Those trends will continue. Delta adding on to that sentiment on the day earlier with an interview with one of our competitors, quite frankly. You can see the airlines doing well. Some weeks gaining more than 20 . The optimism people will take to the sky, both business and leisure, and also we do have the bailout, which is helping these airlines to some degree or to a big degree, saving the industry. American receiving the most pledged money. 5. 8 billion. Delta, 5. 3 billion. Jetblue, the smallest amount of the money, 1 billion. Relative to delta, they are saying their increasing flights for june by 200. That is up from 102 days ago and they are saying that passengers are up 150 from april levels. July could be much better. An overall sense people will be back in these guys. David back in the skies. David because that what we said earlier, will the consumer comeback . We do not know. They are still welloff where they were, but theres some indication they are starting to come back in may and june. Abigail there are signs people are going back out into the world. I have read their two ways pandemics end. One, there is a vaccine, two, people become less fearful. If that happens, you could see folks take back to the air and travel. One area of the Airline Industry that is still being hit on the airline makers. Because the demand is weak, they are having to preserve cash. Lets see whether that changes. Boeing and airbus down 60 . Those green shoots youre starting to see for the Airline Industry overall. David thank you so much. That is Abigail Doolittle. Coming up next, the plight of the cities and the pandemic. We will talk to the head of the National League of cities. He is clarence anthony. That is that on balance of power on Bloomberg Television and radio. Welcome back to balance of power. I am david westin. We are going to mark crumpton. Mark President Trump is withholding funding from michigan, a swing state, and nevada unless leaders refrain from facilitating absentee voting. His tweets come as many states are considering expanding access to remote voting this year. Dozens of voters and poll workers were infected with covid19 after republicans in wisconsin refused to expand absentee voting. India will allow domestic flights to resume as the Prime Minister tries to gradually , butrt Economic Activity infections are climbing at the fastest pace. India has more than 106,000 confirmed cases and more than 3300 people have died. Orderedli court has president netanyahu to appear for a trial in jerusalem sunday. The Prime Ministers attorney asked for an exemption. He was indicted on charges of fraud, breach of trust, and accepting bribes last year. He denied any wrongdoing. His trial was supposed to begin last month, but was delayed due to the pandemic. Global news 24 hours a day on air and on quicktake by bloomberg. Powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. David thank you. The debate continues on capitol hill about whether to give aid to state and local governments and how much to give. Revenuees are losing every single day because of unemployment. Udy that says over the next three years they will lose 360 billion alone. , clarencee ceo anthony. This is a lot of money. Clarence david, thank you so much for having me on the air with you today to talk about this most important issue. What our Research Shows is that over the next three years cities, towns, and villages all over america will expect a 360 billion revenue shortfall. What weok at this year are anticipating is 134 billion. This is based upon the information we are getting from our members in a survey we got. Again, we go to 2020 and are and 110t 117 billion billion in 2022. This may sound like numbers, but this is about america getting back to normal whatever that is. It is about basic services we know we are going. Have fewer police officers, sanitation workers, ems. This is not just about the numbers, but the people who live in these cities, towns, and villages we represent. David mr. Anthony, could it be even worse . But this is is bad, just because of unemployment. There is pressure being put on the states as well. They have to cut back on the assistants they give as well. Clarence these are estimates into 2020go further we will we anticipate get more updated numbers. What we are seeing in states like kentucky is approximately a 35 Unemployment Rate. Georgia has a 36 Unemployment Rate, louisiana with numbers up to 28 . Impact on thethe havedown in most cities to a Significant Impact on the businesses, lack of jobs, lack of ability to provide the services we need. What we have been saying to congress and the administration is if you really want america to start back up. You need to jumpstart the economy of the cities, towns, and villages. That is so important because we are seeing cities like san antonio furloughing employees. Virginiaeing west 98. 9 million budget with a 2 million deficit. This is just a start of what we anticipate of what will be a long recovery for america. Evenlyis it distributed across the country or are some parts it worse than others . Clarence yeah, i think all states are being hit in a different way, but what we are seeing is that the small and Rural Communities, it is starting to impact those communities. First, we are seeing the increase in the covid pandemic numbers in those Rural Communities and we are seeing the increase in lack of jobs. These communities are not as diverse as the larger communities. When we talk about covid we have that picture, but we have stories in those communities that are showing us nebraska, oklahoma, and other parts of our nation, even ohio these numbers are growing and the impact is more significant. They are not having the ability to have the access to the Health Transportation to be able to get to the hospital and other services. Impacting the most vulnerable populations in our nation and we just want to make sure our city leaders have the tools to be able to help in this recovery mode we are in. David does this affect the attitude of mayors across the country toward reopening the economy . You listen to President Trump and we heard the treasury secretary yesterday saying the main thing we need to do to get unemployment down in the economy going is to open back up. Does this lead mayors to say, you know what . We want to lift restrictions. Clarence i think what we are hearing from our mayors that are members of the National League of cities is that they want to follow the direction of the Health Care Professionals and scientists. For one community in colorado may not be the same thing for georgia based upon the data that they are receiving. We have been hearing that over and over again. The most important thing to our have a is that they healthy citizenry and we have got to take our time because we do not want to find ourselves going backwards in terms of this process. David thank you so much. We appreciate you being with us. Ceo ofe anthony is the the National League of cities. Bikes may be in short supply. We talked to the ceo of trek bicycle on balance of power. David this is balance of power. I am david westin. Bicycle havetrek gone over 1 billion and he knows about leading a large organization. He has taken those lessons and apply them as well as written a book about what we could do as a country that would make us bigger and stronger. We welcome jeff burke to bloomberg. Let me ask you about trek bicycle. How was business in the middle of a pandemic . Jeff when the pandemic started we thought business was going to be really challenging and a couple of weeks into the pandemic consumers found out the bicycle is a simple solution to getting outside, transportation, and a number of other things. Business has been booming ever since. It has really caught us by surprise, but it has been a good one. David the reports on the east coast say we may have a shortage. Everybody is trying to get one. [laughter] are you having any trouble getting materials or manufacturing going . Jeff there definitely is a shortage of bikes. I have been in the business for 37 years and never seen anything like it. Demand. Seen a surge in we had hoped to have a great season so we had a lot of product, but our warehouses are being emptied. There are still a lot of bikes at retailers. They are just getting harder to find. David fascinating. That is one part of the economy that appears to be booming. Tell us what you have learned from leading trek bicycle that might have implications . How is the company changing under your leadership . The company has changed a lot over the years. My father started the business 44 years ago and one of the big changes is we took the business internationally and that was a great move. One of the biggest things we have done at trek is create a great place to work and one of the biggest things is we have broken our business up into different pieces. We have got a leader for each one of the parts of the business. We make sure we have a great leader for each one of the businesses and that we put a premium on having a great plan in place. That is one of the reasons why i wrote the book about the president ial playbook. We have in america, people who run for the presidency who do not have a plan and when you take a look at the big challenges we face part of that is a lack of leadership. Our leaders spend a lot of time trying to get reelected and spend little time putting a plan in place to move the country forward. Avid the book actually has 16 point plan. Andve looked through them it is very detailed. Originally thinking about running for president yourself. Why did you not . Jeff i was really disappointed. I have always loved the country and the history of our country. I was really disappointed with the performance of the 11. Ernment back in 20 graduationy sons and the great historian David Mccollum was speaking and he said, do something for your country. I thought, what could i do . 12 simpleook called solutions and i said i did not save america. I said to myself after the 2016 election, if somebody competent does not run with a plan, i will do it myself. I spent the last couple of years writing my plan as if i was going to run and i seriously considered running. Runhe end i decided not to because there are a couple of people who had run president ial campaigns and told me i had very little chance. I thought what i really wanted to do was educate the American People. I decided to take the exact plan i was going to use if i was going to run and i put it into a book. I really want to educate the American People. I put that book out. You can go to president ial playbook. Com and download it for free or you can get at amazon. David i have done that. I downloaded and looked through the pdf. It covers a lot of issues with talk about that not much gets done about. I wonder if there is a real difference between running a company and running a country. There is something called the congress because a line item veto has been around a long time. Term limits on congressmen, a lot of talk about that. Being able to hire and fire federal employees and paying them more money sounds like a good idea for a company. Is there a difficulty of a businessman going to washington and they do not know how to pull the levers or push the buttons . Jeff i think that is a really good question. I think it starts with the campaign. As americans we are treated to these campaigns where people spend billions of dollars dumbing down the American Public because none of these issues are discussed. That is what would have made my campaign different. I would have talked about my plan. I would not have talked about negative advertising, but focused on the plan. I dont think the vast majority of American People have any knowledge to these Critical Issues facing us. I think one of the things we are learning, especially through covid19, is Good Government matters and having a plan matters. I think if you want to take these issues on, and i have 16 of them, but if you want to take on climate control, highperformance government, if you want to have a better foreign policy, if you want to rebuild america through a better transportation system, i believe it can happen. But i think you have got to go out there and you have got to talk to the American Public like they are adults. You have got to talk about what the real issues are and ask for the order. I dont think anybody ever does that. I think it has turned into andity tv for campaigns when somebody is elected they are like, whats next . Book situation i wrote a and in that book it is a complete plan. I think what we need from a president , especially at this time, is an activist. I lay that out in the book. Some really great ideas on things we can do to turn this country around. David we really appreciate you being here. Author of the president ial playbook as well. Chancellor merkel says the bailout deal is close. It looks like germany may be bailing out the national airline. Coming up, we talk about the twentyyear auction for Treasury Bonds with mike mckee. That is coming up on balance of power. Welcome back. I am david westin. Just a few minutes from now the u. S. Treasury is going to do something it has not done in 34 years. It will issue bonds that mature in 20 years. We welcome Michael Mckee who is our chief economics and policy correspondent. Why is this such a big deal . Mike in part because there is nothing else going on. The bond market has this to focus on. [laughter] it has not traded or auctioned since 1986. There is a uniqueness to that. The question is whether this is going to be well received especially given the fact the treasury is issuing so many bonds over the next couple of years to pay for the deficit. Do people want them . A lot of people say maybe they do because the 30 year bond was 2006. Upted from 2001 there are not a lot that would have climbed down from the original 30 year issuance. If you are looking for that duration, particularly if you are a Retirement Fund manager, you want to be happy to have this. The question is do enough other people wanted to make it a liquid market to keep issuing it . The treasury secretary said they would like to keep issuing not only 20s but at the long end. With Interest Rates so low in the deficit so high they have to pay a lot of interest costs. It it as you explained may help the trading of the bonds smooth out. Address the bigger issue about the demand for u. S. Treasuries. I think it is 3 trillion this quarter . It is extraordinary and yet there is no indication people are getting cold feet. Mike it is very strange. By the book yields should rise at this point because we are looking at so much issuance. You would have to pay people to take them, but no, they want u. S. Treasuries. That may be in part because everybody is thinking they have got to save, but you would expect more on that at the short end. You would also expect portfolio measures to be taking up 30s. It is an anomaly and many think at some point we are going to pay a price and higher yields. We just do not know where that is. You have people saying m. I. T. Is right. We have got enough buyers. David a little over an hour from now we are going to get the minutes, but you have got something more current because you could talk with Robert Kaplan in about 20 minutes. Give us a sense of what you want to hear from him. Mike we want to know how the economy is faring in various districts around the country as they get ready to reopen. This is going to be the story of a lot of different states, cities, and how they proceed as well as how anxious people are to get out and spend money. Will companies reopen . Will restaurants reopen . Those are the interesting questions and i will be interested what rob has to say about the dallas district. Yesterday we talked with eric from boston and he thinks they may be going a little quickly even though the boston district is one of the slowest moving at this point. He is worried this is going to be a slow recovery. I think they are hoping there will be a pickup in the second half of the year. In ged terms, i think there will be a pickup. Unfortunately, the labor market are still going to be pretty weak. In a talk i gave today i highlighted that, by the end of the year, i expect the rates to be in double digits. It is probably going to be significantly down from where we are right now. Mike that was the view from boston. We will see if the view from texas is the same. Rates, i amive assuming the fed is not interested . [laughter] mike they are not in the market has priced out negative rates. Maybe they are starting to believe the fed. [laughter] david how about that. Always great to have mike with us. You will want to stay tuned because there is 20 minutes eastern hend at 1 15 will be talking to Robert Kaplan. Coceoget to talk to the on what is going on with farmers. And this isestin bloomberg. Vonnie it is 1 p. M. In new york, 6 00 p. M. In london and 1 00 a. M. In hong kong. Tom vonnie quinn and welcome bloomberg markets. U. S. Stocks are gaining ground but investors are focusing on opening the economy. The s p at its highest and more than 10 weeks. Energy and transportation leading the way. The u. S. Treasury auction off twentyyear bonds for the first time in more than three decades paid we get the details from janelle woodward, bmo Asset Management head of income. Coming up, live on bloomberg tv and radio hour interview with Robert Kaplan. That conversation is just ahead. Lets get a quick check on the markets. We had all sectors of the s p 500 in the green until reset. 10 out of 11 are positive. Plenty of stories we will get to. Let