Conference. I still dont have a time on that. All of the other news flow, minneapolis, this whole twitter flap. To me, what is extraordinary is june beckons. Nothing is more front and center for me beside the june 5 jobs report. 41 million is where we are unemployed. To me, that is the dominant crosscurrents right now. Jonathan youve picked up on this again and again over the last couple of months. 20 could be the Unemployment Rate when we get the numbers next week. We talked about next steps on fiscal policy. Ive heard little this week on that topic. Tom Henrietta Treyz was brilliant on this in the last hour. When do they help the states . What is fascinating is the federal government doesnt help the states until there is a crisis, so theyve got to wait to see four or five states say we are in a crisis, we are running out of money, do something. And then i guess it all happens over a weekend. Jonathan i think most would say it is likely that is going to happen. Some would say it is inevitable. We have a News Conference later today. We have no idea what time that will take place, and it is going to be really hard for the president when that is conference happens to stay on one subject. Vonnie lisa but the subject Everyone Wants to hear about and what is affecting markets is the tension between the u. S. And china. Have, if thison i going to mark the week where hope starts to run out . We dont know would not press conference is, but that is what we are watching today front and center. Also what we are watching today at 8 30 am, the u. S. Releasing personal spending data, which is interesting, and part because the consumer. At 11 00, fed chair jay powell participating in a virtual seminar. My question is what kind of willingness is there on their behalf to increase their Balance Sheet in order to affect yield curve control . How will they target a specific range . Jonathan i think Forward Guidance is going to be a big topic of conversation. Michael mckee and myself will catch up with the cleveland fed president a little later, loretta mester. The fed will still want to offer a lot of support. What can they offer in terms of Forward Guidance i think is the subject at the moment for the fed. Tom it will be interesting to see. Citigroup models out into june and july a 9 trillion Balance Sheet. I have never imagined that. Just how big are we now . Trillion, which is nothing, but still interesting, we are climbing. Jonathan going us to weigh in on the situation is Jared Woodard of bank of america. The cyclical aspects of the market starting to build, and the relationship between china and the United States breaking down. What is the message to clients at the moment . Jared great to be with you all. I think for the next several quarters is what kind of policy path we take. Do give extensive unemployment insurance, we think that will happen, but that is the limit of what we think will happen. The secularrn to stagnation that investors have already crowded into, tech and health care and investment grade, so on. But the more interesting scenarios, and the two that deserves much more attention, are the stagflationary effects if you see an increase in tech regulation, friction with china, and the third scenario, elevation, where we get new policy post globalization, shifting towards higher r d, new industrial policy that could boost productivity and growth, and i think that is what the market is really underpricing. Tom what is so great about your academic track with your phd in philosophy is maybe you can give us a new philosophy for a new. Arket is it the same as the old philosophy, or is it something new . I think it is absolutely something new. Just look at the realignment around the world. You are seeing things that were never up for discussion before. Republicancontrolled senate, expanding fiscal policy on a scale we have never seen , just in u. S. Peace line look at the tarp vote. I think on this occasion, republicans have surprised everyone with the willingness to grow the government Balance Sheet. What is happening, the same thing happening in europe right now with potential revolution in terms of fiscal policy, japan of realhrough with 11 fiscal stimulus, these are things that were unthinkable six or 12 months ago. Theou follow through with kind of productivity boosting policies, it can really get us to a new level. I think it requires a complete rethink of asset allocations and portfolios. Lisa how would that make you reallocate your investments . Developed countries are going to stop relying on Monetary Policy to help us limp along, but invest in new technology, incentivize corporate capex, theres nothing that correlates there with productivity correlates better with productivity than r d. Toif you expect on a plummet rise, and equality to decline, that is how you see meaningfully hired gdp growth in developed economies that have otherwise stagnated at 1 or 2 . That means all of the trades that everyone has hated for so long, the value stocks, the financials, materials, industrials, europe, japan, the things that people dont own today, suddenly look much more attractive in a world of higher volatility. Are you telling me this rotation into value, into the cyclical areas of this market, is not just a squeeze . It has legs . Jared i am not telling you this is the one. [laughter] theres two things in our latest report we flagged us things to watch to know when it is the big one. Number one is the bond market. See value and high yield in europe rally in, but until you see confirmation higher bond yields, that is number one. Number two is brent. When the top five stocks in the s p are more than 20 of market not the inception of a shiny new bull market. You need to see much broader participation before you see big equity returns. Its amazing how rude jon is on a friday. It is really typical, folks. The last time i saw ken lois was at bank of america in singapore. That was a long time ago, and that was the last Time International stocks did well. When does the International Equity market finally turn on a . Elative or absolute basis the news this weekend last week out of japan and europe is a really great start. Resistance from Northern European countries and we suddenly have scope for some kind of debt mutualization or wide fiscal policy, some of the deep value trades, european banks maybe most of all, are suddenly and play from an the lowspoint of view have been decimated in those kind of assets, and japan as well. They have relied on extreme Monetary Policy for so long that if japan can start to boost demand and get out of this Balance Sheet recession they have been stuck in, suddenly ethic those assets become attractive. Youve got to see followthrough, but once we get confirmation from the market that things are really starting to turn, you see Inflation Expectations turn, i think it represents an incredible, maybe even generational buying opportunity. Woodard of bank of america, weve got to continue this conversation. My question is, if youre looking for the treasury market guidance as to what could or could not happen with value stocks, what kind of signal can you take away from a market that the Federal Reserve is distorting so much, and may well distort even more in the next several months . Tom we talk about the bernanke he put, but we are so far past the bernanke put. What is going to be the put after that 20 plus Unemployment Rate in exactly one week . I think jonathan the hope Jonathan Jonathan i think the hope is that those numbers start to come down. I think some people took encouragement that we might be starting to move in the right direction. I think it is too early to get to enthusiastic about the situation, but the numbers were there. It looked good, the idea that people were beginning to get hired into the workforce. People in the federal government were increasing benefits, so perhaps some green shoots. Jonathan alongside tom keene, im Jonathan Ferro, with lisa abramowicz. You are watching bloomberg with equity futures down nine points for the s p. This is bloomberg. Ritika with the first word news, im ritika gupta. If theyre not a protests in minneapolis over the death of george floyd, a black man who died in police custody. Demonstrations spread to other cities in louisville other cities. In louisville, at least seven were shot. On twitter, President Trump blasted the mayor of minneapolis , called the writers thugs, and threatened to send in the national guard. Twitter flagged the tweet, saying it violated its rules about glorifying violence, hours after the president issued an executive order that seeks to limit Liability Protections for twitter and other social media. Earlier this week, twitter began selective factchecks of his tweets. The president says he is not legislationhe new that curbs freedoms in hong kong. That opens the door for the president to impose penalties that could range from modest sanctions to revoking hong kongs special trading status. The signs and japan that coronavirus has threatened demand at home and abroad. Japanese factory output dropped in april by the most since the 2011 tsunami. Meanwhile, retail sales fell a more than expected 9. 6 from the previous month. 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. Im ritika gupta. This is bloomberg. I think hong kongs autonomy is being severely tested right now. That is the impression of china hawks in the United States, whether democrats or republicans , and it is definitely the trajectory of u. S. china relations. Jonathan Henrietta Treyz of Veda Partners weighing in on the situation between the United States and china. That situation very much the focus. A little later today, we expect an address from the president of the United States. Onity futures down just 4 the s p 500. We are negative a little less than 0. 1 . 0. 67 . Come into the last two weeks in foreign exchange, we add some weight to the euro. 1. 11,o stronger through up around 0. 5 . That is reflecting the improving Risk Appetite and reflecting some optimism around a continent that wasnt there several weeks ago. Tom we can talk about this today. Weve got to get to Kevin Cirilli on china. Youre absolutely right. David blum was lights out with hsbc an hour or so ago, and he has shifted to a steady to even resilient euro. Lets do this right now. After that data check, all of the focus on china, with any number of things we can talk to Kevin Cirilli about. Weve got to go to the press conference today. s i neverident be is going to speak to republicans, i know he is going to speak to democrats, but will the president speak to hong kong today or beijing . Kevin he is going to speak to beijing. Based on the conversations ive had throughout the week, the president is really going to be leveling down what the state department has said this week, that they are really calling into question just how they can justify hong kong having its independence, especially given how beijing has passed National Security laws and how they have been able to really upend the Financial Independence of hong kong. So i think youre going to your the president talk on that. Theres bipartisan support among republicans and democrats. Really, this is one of the rare geopolitical areas where both parties agree. So the president definitely going to be hammering home that point, and it is just a series of policies that have come out of washington dc from both sides of the aisle, really resetting the relation. Jonathan you know better than me, if that News Conference takes place with press in the room, that conversation will quickly get away from china. Jack dorsey could be the audience of the president today in that News Conference. I just wonder, do you really think that if the News Conference today will quickly switch to minneapolis . The focus of this press conference will just be on minneapolis. Moments before coming on air, the president tweeting at twitter and raising concerns about how twitter has not been able to police itself regarding information, with china for example. The president yesterday with the executive orders raising concerns about big Tech Companies, instagram, twitter and the like. The president once again calling on section 230 with regards to the fair decency act, and raising that issue. Nightomes as twitter last labeling one of the president s tweets with regard to the protests in minneapolis as glorifying violence. That is from twitter, a label that they did on that specific tweet. He said once the shooting starts once the looting starts, the shooting starts. The president s words. So a very volatile, quickly moving situation involving race and nows in the u. S. , this issue of Tech Companies very much wrapped into that story in minneapolis. Isnt this exactly what the president wanted, to shift the conversation away from how the u. S. Would respond to china, to the pandemic, to some of the redmeat issues for his supporters such as Race Relations, such as what we are seeing with social media . Wasnt that basically the intention here . Kevin you know, i dont think, based upon the conversations had with the Reelection Campaign and republicans, members of congress, i dont think that the Race Relations in the United States is an issue that anyone wants to see happening at all. The Biden Campaign has heavily come out and criticize the president s handling of this, and beyond that, i actually think the president would rather be talking about china and xi jinping than the situation in minneapolis, but what was supposed to be a press conference in which they wanted to say they were going to be more aggressive on china is now going to be completely about that, most likely. Tom i want to have a conversation, and Jonathan Ferro set i cant do that, so let me cut to the chase. Is the white house overwhelmed right now by this news flow about minneapolis, twitter, china . Is there almost a policy exhaustion at the white house . Kevin i am not sure if i would label it as policy exhaustion. This press conference this afternoon will be one of the more notable ones. I am reminded of the press conference the president gave in new york city at trump tower. Fter charlottesville i think there are really three issues right now. One, u. S. China relations. Two, Race Relations in the United States. Third, the galician of silicon valley. Those three are very much going to be driving the conversation into this weekend and next week. Jonathan where is the former Vice President joe biden on all of these issues . Kevin the former Vice President has criticized the president , especially for how he has handled the minneapolis situation. He has set to give more public remarks today and into this evening. He will be appearing on a host of Different National news programs, and really, they view this as something that is going to be crucial to the former Vice President getting elected. That is the africanamerican vote. Campaign, this is an opportunity for them to draw a contrast for how his administration would handle Race Relations and how the Obama Administration handles Race Relations versus what we are seeing now. That said, the president typically takes the strategy of barraging through any type of criticism, particularly any moment where hes backed into a corner politically speaking. Suggest that this beernoon is going to one of those moments where he comes out aggressively and forcefully on all three of those issues. Jonathan Kevin Cirilli down in washington. Tom, i dont think anyone wants to see a repeat of the News Conference that took place after charlottesville. Tom theres no question about that. The images overnight were really shocking. I know we will have them in our news across radio and television. Simulcast is this fun. I am glad we are doing this. Radio, then tv and conversation continues. We will pick up the story with Ebrahim Rahbari next. From new york city, this is bloomberg surveillance. We are live on bloomberg tv and radio. Alongsidetontine tom keene, im Jonathan Ferro, together with lisa abramowicz. Equity futures down six points on the s p 500. Positive on the week. Positive on the month by about 4 on the s p. In the bond market, treasuries set up as follows. 6. 7 at 0. 67 on tens. This is the story of the moment. Risk appetite continues to build , and that Dollar Strength continues to fade. Tom no question about it. Catherine man running economics at citigroup. One of the great acquisitions is abraham or bari, is Abraham Abraham read bari rahari. Im are we going to get suckered again into strong euro and then oops . Onahim thanks for having me. That is exactly how we feel. For the moment, theres a bit of upside drift in the euro. That is partly because theres a search in markets for , and to somessets degree the euro. Even though we think there will be a little bit of drift, there wont be much more headroom, and this rally will be over before long. Lisa a question about the other side of that trade, which is watching the dollar continuing to weaken. I was kind of shocked when i came in this morning to my living room that the dollar was weakening against even the chinese yuan, the remain be the renminbi, despite the tensions. Have people had it with the increase in the debt loads and some of what is going on in the United States, moving away from the dollar . Or is this just a temporary reallocation . Ebrahim from our perspective, it is probably more temporary. I think the good reason for why the dollar is a little bit under pressure right now is that the Global Investor base is getting less worried. On the health side, i think the longsuffering emerging markets are seeing signs of flattening as well. So there are good reasons for the rest of the road to see a little dollar downside. That also translates into looking for what looks cheap, and u. S. Assets dont look cheap by any metric across the board. Then there are the bad reasons. There is some level concerned around u. S. china tensions. Also, there is concern about the potential risks attached to the u. S. Election. These are very acute for the time being, but once again, we think that is probably temporary. We think the u. S. Still looks among the least ugly in the global economy. The outlook of growth in the u. S. Is much higher than elsewhere. We think it is too early to write off the dollar and call an end to the strong dollar. Jonathan right now it just feels like a positioning story, and that is what is pushing some of these big moves over the last several weeks. It doesnt feel like its got anything to do with rate differentials. Why dont you buy into the euro optimism of the last couple of weeks . Ebrahim there are two reasons why we are skeptical. One is exactly on that issue of Risk Appetite. I think a good chunk of that was previously, maybe we had defensive positioning, and we are at a point now where positioning is by no means stretched, but it is no longer very defensive. We do think there are significant risks for the second phase of the recovery down the road, significant risks of disappointment that could weigh on broader Risk Appetite, and assets like euros and equities would be very vulnerable. The second has more to do with the specific european develop ands. We have course had these initiatives around the eu recovery fund, the french german proposals, and so on. Think that this is a game changer for the eurozone over the euro. It doesnt really have a clear path going forward. It is dealing with a oneoff situation in a fairly constrained way. These two reasons make us skeptical that we are looking at a kind of enduring break in the euro or upside for eurozone assets. Jonathan to just follow up on , i amb next week briefly trying to work out whether more qe a zero positive or euro negative is euro positive or euro negative. Which one is it . Ebrahim we think it is more euro positive. You still have risk premium for purchaseseuro asset bring down that risk premium. In that sense, we think if the ecb did not increase asset purchases, the euro would end up setting off, and so would the subindex. Periphery tom you mentioned a hamiltonian moment. Many people are thinking the broadway play. I am thinking way back, where. Aybe it was fractious you cant have a hamiltonian 27 countries, cant you countries, can you . Ebrahim i wouldnt completely write it off, but i think certainly, this isnt it. In this specific case, as i mentioned, theres no transfer of fiscal powers or political powers, and we are dealing with the construct that is not even easily scaled. Inappropriate to refer to this as a hamiltonian moment. Out, your to broaden base case is that the dollar will resume its strengthening and you will see a weakening in the euro going forward, and that the dollar will end the year as the dominant currency just as it was a couple of years ago, correct . Ebrahim broadly, but we have a couple of things along the way. I think one thing that complicates things is the u. S. Lection ofre will be a period uncertainty around the u. S. Elections, and we think this might be a little under pressure because of that. But around the auction, the dollar would once again resume its uptrend. But we believe that the dollar bull market can still continue. Of ai want you to think question on this ecb forward meeting. You looked awfully good on the lawn of the ecb building a few years ago. Ecb . Do you see from the i know youve got a question about it. Jonathan i used to time my visits to the ecb really effectively because they go on tour twice a year, so i would end up in places like cyprus covering the European Central bank. Youve got to do that. Hopefully we will go on one of those tours as well. Much. Re already doing so what is the objective at the next move. Just a couple months ago, Christine Lagarde said she wanted to put pressure on the fiscal policy maker. What kind of pressure do you put on fiscal if you follow up next thursday with more qe and more asset purchases . Ebrahim i think it is absolutely critical they continue to reinforce at this next meeting. Not only are spreads still wide in periphery sovereign debt, but in between, we had that German Court Ruling that questioned the ecb capability to do its job. I think it is essential that the ecb at least, and some shape or form, reinforce its presence in asset markets. But beyond that, just keep in mind that unlike the fed, the ecb has not been particularly proactive or aggressive. We have seen a pretty steady run rate for the ecb. I thick it is important for the ecb symbolically to be active, even if on a weekly basis, we ont see pressure rising risk assets in europe. The ecb next week will be extremely important. Abraham rub ari thank you. Bari, i think this is day four of this simulcast on tv and radio, and tom is already trying to send me back to europe to stand in front of the ecb in frankfurt. [laughter] lisa absolutely. Jonathan it is day four, and he is trying to get me out of new york. Lisa remember the good old days when jon ferro would just stand on the lawn. Tom i had to take off one of the four days, it was so strenuous. Jonathan it was that difficult after day one that you had to go home . We might have to start drinking in europe. The optimism around this story is unbelievable. We still havent seen everyone line up behind when idea. I understand the reason for optimism when you hear the likes of germany get behind a project like this, when you hear the german former finance minister also lining up behind idea. But still, there are holdouts. Austria, the netherlands. We are just not there yet. Tom i totally agree. Of course, it will be the same later child the same labor challenges that we have in the United States. I am completely focused on a week from today and the Unemployment Rate. Of you suggest to both that without question, the labor economy of europe will be front and center as they face these challenges. It is really important, as we talk about the u. S. Unemployment rate, to note that the Unemployment Rate in europe is also surging to record highs in places like france, and really raises the question of how much unity there can bea there can be in order to support these economies, and how bullish you can be on the region, especially that we have seen this before. Jonathan next friday, the payrolls report, full coverage right here on bloomberg surveillance, live on bloomberg tv and bloomberg radio. Alongside tom keene, im Jonathan Ferro, together with lisa abramowicz. Next, we take the attention to the tech sector, and one in the spotlight, twitter. Live from new york, this is bloomberg. Ritika there was a third night of violence in minneapolis over the death of george floyd, a black man in police custody. Hundreds of people protested and set fire to a police station. President trump tweeted that the demonstrators were thugs, and threatened to send in armed troops. That led to twitter flagging the tweet, saying it glorified violence, hours after the president signed an executive order targeting twitter and other social media. The president plans to announce his response today that could range from imposing more sanctions to invoking the special trade status hong kong has with the u. S. The u. K. Will offer citizenship to 3000 hong kong citizens unless china packs down on new legislation. Currently, they are only allowed to come to the u. K. For six months. It is a symbolic victory for President Trump. Washington, d. C. Starts to reopen today. That gives the president a chance to demonstrate that the country is getting back to normal. Washington is still one of the worst hotspots in the nation for the coronavirus, but the city is relaxing some stayathome orders because it met the goal of a 14 day decline in Community Spread of the illness. Joe biden eyeing a gradual return to the campaign trail. His emergence from his delaware home on a memorial day was a test run for returning to traditional campaigning. Home,ndidates have stayed but there is speculation that mr. Biden could resume his campaign in battleground states. 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. Im ritika gupta. This is bloomberg. Pres. Trump today i am signing a an executive order to uphold the rights of the american people. Currently, social media giants theive a shield based on idea that they a neutral platform. Jonathan the president weighing in on the situation in tech, and twitter very much in the firing line. Good morning to you all. You are listening and watching bloomberg surveillance. Seven on thes down s p. Outside of that, no big moves in the bond market. Treasuries in the 10 year coming in at 0. 66 . In foreignexchange, the euro advancing. Eurodollar up by around zero point 5 . That is across asset story. Within equities, i think it has become a real issue for the likes of twitter. What next for the white house, and what will it mean for social Media Companies . Tom no question about that. Daniel ives is with wedbush securities. We would love to talk to him about the faang stocks and the rest. Ives on today with mr. Twitter. I want to ask you a broader, general question. Organization . Ews daniel it is a good question. Think this latest backandforth month section 230 is really highlighting some of the slippery slope that can now take form as trump and dorsey continue to go back and forth. I think that is why the worry for investors is where does this lead to. It is all about regulation, and that is something investors dont want to see. Jonathan even if we dont get the regulation, what happens if the president s off the platform, delete his account . What would actually happen to a stock like twitter if that happened . Daniel stock would selloff because many would view it that one of the best things ever happen to twitter was President Trump. It is all about engagement, and i think thats why i would be shocked if he ultimately did that come about it speaks to right now, the can of worms thats been opened from a stoxx perspective. Its more of a headwind, as you look at a name like twitter, relative to the latest backandforth. You talked about regulation, and a lot of people talked about it last year. This year it seems to have evaporated from the conversation as people look at big tech being the most resilient of companies amid the covid19 downturn. How much pressure will they truly need to regulate big tech at a time when i actually have the cash war chests to go out and support other businesses, and potentially keep employing people . Daniel it is a great question, and i think it was in the background, but now, even in the environment where the strong are getting stronger, i think it is back as ato come tsunami in the summer and fall. Well see more and more screwed the of these business models. Is especially going to be big asutiny on any sort of m a the beltway versus big tech is going to get more gasoline as it goes into the summer and fall with this battle. Covid is really highlighting the strong get stronger in just a dark macro. Jonathan you brought up the acquisition story. What do you make of that argument . Daniel it speaks to what we anotherang names are up sort of year these are safety blanket names in the , itm, but on the other side is the names. Tom theres a guy up a guy onedbush twitter saying dan ives, wedbush are out with a new pump piece on tesla. Today . We get on apple how does tesla position themselves with their massive china reach, given recent news events . Are in the eye of the storm. We have talked about it. From the iphone perspective, it is foxconn. That is where they made the big bets. That is why for apple, this continues to be a slippery slope because china continues to be the core for demand. Any weakness in headlines we see, that is the worry from an investor perspective. Tom but isnt that the easiest target for president xi in a phasedin or gradual manner to say, enough of this, we are going after tina after cupertino . Do you expect that . Daniel i do not because they are one of the most strategic players in china. Even when you look at how many , theemployee within china multiplier is over one million employees. It comes down to that is why cooks relationship in china and what they have built is so important. That is why i think the bark is worse than the bite when it comes to apple and china. Any sort of headline selloff, we would be buying, as that continues to be just not valid relative to what is going to happen. Dan ives of wedbush. Fantastic to catch up with you. I pointed out that maybe they dont need to make big acquisitions, but that is certainly one part of the story. There are deals being made that we miss, and we miss a lot. Conversation changed from regulating these big Tech Companies to that absolutely disappearing this year. Google, amazon, facebook, and microsoft have had the fastest pace of acquisition going back to 2015. If the regulators have their eyes on big tech, they havent really been focusing on them just yet. Jonathan the kind of deals i dont think any have paid enough attention to, with the exception of those who closely follow tech. Has ag guys anyone who small idea, a company, the big guys just come in and buy it out. Tom i am putting out a tweet tv worships you venice. Jonathan jonathan i think everyone knows i am not a uv fan. But i think the facts are little more delicate than the football team. Morninge, hes here all on bloomberg tv and bloombergradio. Com alongside me and lisa abramowicz. We are counting you down to the u. S. Open here in new york city, with equity futures down around six points for the s p 500. No drama here. Outside of that, and the bond market, yields come in two, three basis points on tens. In foreign exchange, the story of the morning and the last couple of weeks has been a stronger euro. From new york, this is bloomberg. Its hard enough to forecast where the economy will be going over the next several months or quarters. Forecasting the next several years is even harder. This is not your fathers or even your grandfathers imf. The most we can hope for out of the ecb is a pumping of the brakes and slowing down on china escalation. This is bloomberg surveillance, with tom keene, Jonathan Ferro, and lisa abramowicz. Tom good morning, everyone. This is bloomberg surveillance