With the some sort of spike in the virus, hopefully not. If that happens that would certainly affect the corporate profit outlook. We are looking at a move into the cyclicals. The Financial Sector being helped out by a steepening yield curve. One area of weakness around china because there is heightened china tensions, chips trading lower on the day. On the year, lots of room for the cyclicals to make up given the fact the s p 500 is down 6 . Etf down 18 . Leading the way still is the fangs, the stayathome trade. David a lot of us thought the markets would take a hit because of the horrible protests as a result of the killing of george floyd over the weekend. They did not react to that. We were worried late friday that President Trump would be going after china, yet the stocks did not react negatively to that, even though we learned today agricultural imports might be cut. Is that because the president warned more than he did . Abigail that was more a case of talking the talk and less a case of walking the walk. Because severe sanctions do not going to place, markets on friday were slightly higher. At one point they had been down 1 . Looking past that, today we have china saying they will cut some of their agricultural purchases from the u. S. That is not affecting either. Traders to some degree pricing all of this in. I think you will need to escalate to the point where it is going to affect the numbers and not just the psychology of the markets. David thank you so much. That is Abigail Doolittle on the markets. As we say last friday, President Trump at the white house where he warned sanctions against china and said he would pull out of the world health organization. Today china may be pulling back agricultural imports and the market do not react. Larry summers talk to us on wall street week and he said do not be too complacent about what the markets are indicating about u. S. China relations. There is noact that market response should not make people complacent, not about the United States abandoning the world health organization, and not about the state of the u. S. China relationship. ,avid that was Larry Summers former u. S. Treasurers secretary former u. S. Treasury secretary. We wipe them we welcome michael mckee. Lets start with china. There was a time when the markets moved with what President Trump said in a tweet. Have the markets gotten past some of the trade threat . Michael they have probably not gotten past it so much as they have been overwhelmed with other news. We have lived with the trade wars for some time so markets have priced it in. We are tied together in terms of the covid virus with how things are moving forward, whether willie will recover whether we will recover. The economy is dependent on trade between the two. You look the numbers in the last 36 hours in terms of china and u. S. Pmi and you can see theyre both in the same place, a very slow recovery. The chinese world a bit faster than us to come back because they brought the factories back it while ago, but they did see their pmi number decline in the last month, after a quick rebound, just a little bit softer. They are not selling things to United States. We are still coming out of lockdown. Do numbers are bad, but they show a stabilization. The ism and the u. S. Coming in at 43. 1. That is recessionary territory. Not a lot of improvement, but the countries have a path that is tied together Going Forward in terms of the recovery. Be tied together in another way, which is the degree of governmental support for the economy. We have a lot of support in United States, at the same time the premier said they will do what they need to do to support the chinese economy. At what point is this a question not of what the trade relations willut that the markets support the economy no matter what . Michael the market seem to believe that. Theres been a lot of anticipation in the Chinese Market about what stimulus they will provide. Everyone has been waiting on the Central Banks to cut their main interest rate. They have cut all of their other interest rates. After the National Peoples congress, they talk about doing more in terms of local stimulus for businesses. We will have to wait and see. They have the issue of civil unrest which appeared here. Civil unrest because a lot of people do not have jobs. The expectation is the chinese will do more. They also control their economy from the top down. When something happens like this dispute between the president and the chinese, the chinese can react much more quickly, and that is what we have seen with the soybean sales. We saw soybean sales start to rise little bit this year as the phase one trade deal came into effect, and now we are starting to see it drop off. The numbers are low because this is not soybean harvest time, but working down the stockpiles and the possibility of selling more later in the year it what people are worried about if the chinese will cut us off. David to pick up on civil unrest conclude this, we did see the demonstration throughout the weekend, continuing until last night. Give us a sense historically of what the United States has done. We have had this kind of unrest we may not of had this kind since 1968. How to markets react . Normally you think the markets would selloff. They did not so far this week. Michael you would think so, but historically markets do not do that. In 1968 we had the assassinations of Martin Luther king and robert kennedy, and these came after the tet offensive in vietnam first raised the prospect we were losing that war. We had a hong kong flu outbreak that year as well. It was a terrible year for the United States with demonstrations constant. We had the riots in the summer. The s p 500 went up for the year and so did the dow, significantly. They bottomed in march after the king assassination, and then for the rest of the year they rose. As one person pointed today, markets are not about the happiness of people and markets are not about the overall fundamentals of the economy. Markets are about what kind of profits a company makes. If people think companies will make profits, the market will go up no matter what is happening around the edges. David mike, thank you so much for being with us. That is michael mckee, rg economics and policy correspondent. Coming up, we will talk with the congresswoman pepper over the ohio the congresswoman pepper spray over the weekend in ohio. This is balance of power on Bloomberg Television and radio. David this is balance of power. I am david westin. Columbus, ohio is one of the places where there were protests over the weekend as a result of the killing of george floyd. One of the congresswoman was caught up in it, congresswoman joyce beatty of ohio was pepper spray as part of that protest. Thank you so much for being with us. Give us a sense of what happened. We have seen some video. There were protests going on, there were police, and then there was pepper spray. You were pepper spray as well as the head of your city council. Rep. Beatty it was a peaceful arranged and designed protest. I wanted to be there because i felt the same pain, the same ,nger, the same frustration wanting to lend my voice to be heard in an effort to hopefully come to some type of result. The nation watched as george floyd was killed. Mad nation watched as ah aubery was shot down. Eonna taylor. We could go back further. There was a lot of pent up rage of how much do we have to continue to witness. There has to be something we could do. I was pleased to go down there. I could tell you it was a peaceful, well organized protest. Unfortunately, as you know, and if youve watched over history, one push, one shove, one Police Officer being over aggressive starts a rippling effect. Some young gentlemen, im not sure what happened, but if youve seen the footage, he was hurled over the bicycle to the ground and then there was a young female who had been expressing her pain during the whole time, and she was pushed, i was trying to lunge to reach for her, requesting lets not excite the folks, this is wrong, and because i have later learned, those officers were the strikeforce in riot gear and had night witht friday those which i do not condone tearing up our cities. Activists,se not our not our individuals who are from here in our Community Just destroying these businesses. That is destructive and certainly distracting from the movement because many of those businesses were also small businesses, minority businesses, female owned businesses. Started aftering a perfect march, out of the blue, unexpected, came the pepper spray. It was not directed prickly at me. I want to be fully transparent. Pepper spray is not directional. Hereu are six inches over it hitat someone else, our president of city council face on, and only from the side. Certainly an experience you do not want to have. David congresswoman, thank you for laying that out. As you play that out, it pointed out something on both sides. The majority of Police Officers are doing their jobs the way they should. It only takes one or does go to step over the line. On the protesters side, the night before you said there were some that were not peaceful protesters. What is to be done about this . On the police side, is this a matter of training, accountability, should we be getting rid of more bad Police Officers as some people are talking about . Rep. Beatty i think it is all of the above. When you watch live footage from a body camera on the same Police Officer that has his knee on the neck of someone who is not resisting, someone who is handcuffed to the point that the to does, i think you have more than protest. Protesting is only a beginning to allow us to express our pain for over the years, and it is our calling out to have something done. Now i think it comes back to different protocols. Racismnot legislate away , and certainly racism still exists. Disparity still exists. We are in the middle of the coronavirus and africanamericans are dying in great numbers than what they represent in the state and the nation. Take all of this into account, laws must change, protocols, it is a culture we have to invade and set a different tone, and that starts with the leadership in the cities, the governors, the Police Officers, the elected officials like myself, and i am proud we are starting to do those things. History repeats itself, but we must be bigger and better than that. The Congressional Black Caucus has an emergency meeting today with great ideas that involves all of it. How to write legislation, how to set up conditions and demands and protocols. Right here in my community, there are a variety of meetings all day today that are more than doing the same old thing. We see where that has gotten us. David that is exactly what i would like to talk about. There is the Police Element that needs to be addressed when you see what happens to mr. Floyd, it is incomprehensible. What happened had to be addressed. There are larger factors. I am glad you mentioned the pandemic. A lot of the disproportionate effects on blacks and hispanics are because of their conditions. A higher incidence of diabetes, of hypertension, there also in jobs where they have to be closer other people. They have poor health care. What can you do is a congresswoman to start changing the system, not just around the edges. Rep. Beatty i think we have to rip these years and liars of discrimination these years and layers of discrimination. We just put money into congress through our heroes budget. We have to make sure people understand that is an amazing step because we made it about all of those individuals you just mentioned. Those individuals on the front lines. We made it small businesses. We made it about state and local government. If we do not stand up and give them, if we do not carveout dollars to make sure individuals , not individuals like you and i, but individuals, those who are homeless, those who fall between the gaps, we put 1200 plan for them in our cares act. That was not enough. We witnessed that. What did we do . We came back to put more dollars in. We have to come together if it takes registering more people to vote, if it means voting a change, because if you are not for the people in standing up for the people, you should not be representing the people. Congresswoman, can you say a way to take the energy of these protests and directed towards getting some of the things done you just talk about such as your heroes at, which seems to be hung up in congress. It does not seem to be moving forward on the senate side, not the house. Can you see a way of taking that energy and getting legislation through . Rep. Beatty i am very hopeful we would be able to do that. For the first time, in columbus ohio, you had the county commissioners tying poverty to racism. You have today at 3 00 the health department, the city of department, the city of columbus tying we need to set up citizens and Community Review boards. We need to do old school and new school. We need to make sure officers are in the community, you need to make sure the community is engaged with the community. There will be consequences and accountability good i do not think that is that difficult to do. I think right now, maybe this has been the thing that is bringing us together at this moment in time. Maybe this has been the chosen time because we know if something affects one of us directly, it affects all of us indirectly. Congressman congresswoman, it is more than understandable so many people are protesting across the country. At the same time, do you have concerns that in this world of covid, there are risks involved . You had amassed on, the president of your city council had a mask on as well but we see a lot of people with no masks on. Part of the state and local government needed, that will be a problem if all of the Police Forces are spending so much money on overtime. Is there some risk specifically tied to the pandemic . Rep. Beatty i think it is, and certainly i am a proponent of making sure that at all times, whether you are outside are going to different places, that you wear a mask up until the times we cross the street, there are other photos and would that i was time to be as careful as possible to keep my distance. I did not take selfies, i did not take photos close up. I did hold the sign of a constituent we made sure we were six feet apart in doing so. When we cross the street, when we sense there was a problem, i know longer became that leader. I became a black woman knowing i needed to be there to do something and i wanted to be part of the resolve with those protesters who i believe were in their full rights. I wanted to be sure, hopefully able to diffuse or help, not to get to the point where we had to have what we ended up having. I am a huge proponent, i take it very seriously about wearing your mask, i understand we need to open up some parts of our and that is the pleasure of governors and others. I ask us to do it with great caution. People are still dying. We are not through this. This is real. To all of the minority groups because of the disparities, we are in greater numbers. People. Ly i encourage if i am around you and you do not have a mask on, i carry an extra mask in a sealed bag with me to give to people. It is serious and very important that we practice all of those things to keep us safe and healthy. David . Serious issues, no doubt. Thank you so much, congresswoman for being with us. That is representative joyce beatty, democrat of ohio. Coming up tomorrow, special interview with the chairman of the sec, jay clayton. Ons is balance of power Bloomberg Television and radio. David it is time for stock of the hour. John deere back in the crosshairs with all that talk about imports of agricultural products. Abigail doolittle is here to explain it to us. Abigail the shares are a proxy for the u. S. China trade war. This has been reescalating recently. Notriday, President Trump delivering a blow to china as had been expected, but nonetheless a reescalation with the Hong Kong Special status perhaps at risk. The phase one trade deal is still on good china, in retaliation, is encouraging some of its state owned at companies to buy less from the u. S. Soybean numbers already going in the wrong direction into this. They were promising with the phase one trade deal to buy about 37 billion dollars worth of goods. Now it seems as though that may be in jeopardy. It is not just soybeans, it is pork. Relative to where china is going , apparently brazil at this time. David as you said, john deere is a bellwether. What about other agricultural related stocks . Rep. Beatty a little bit of a mixed abigail a little bit of a mix. Archer daniels midland is down. The commodity trader is up. A mixed reaction. Relative to john deere, it is sensitive because its numbers have been going in the wrong direction. On the 2018 part of the trade war, that bled into 2019. Sales going in the wrong direction and then the virus hit, taking numbers down. Soybeans have also been difficult spot, multiple year lows. I think agricultural traders may be wondering whether or not this will put a crimp in that. Right now holding onto longterm support. David thanks much Abigail Doolittle. Coming up next, we will have the former ambassador to china for his take on u. S. china relations. Ons is balance of power Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. Im david westin. It is time for bloomberg first word news with mark crumpton. Are violent protests hammering dozens of American Cities that are still recovering from the coronavirus lockdown. Stores were noted yesterday from new york to los angeles. Overwhelm state and local officials are now getting help from thousands of National Guard troops. Thousands of demonstrators marched peacefully to protest the killing of george floyd by police in minneapolis. That was overshadowed by people who burned cars and fought with police. President trump reportedly took shelter in a white house bunker friday night when hundreds of protesters gathered outside. According to the associated press, secret Service Agents rushed the president to the bunker. The is said to have spent one hour there. In the city of wuhan may have eradicated the coronavirus there. Officials say they found no asymptomatic symptoms for the first time in a month. Infected people who show no signs of being sick can still infect others. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. David thank you so much. U. S. China relations continue to with the president now threatening various sanctions against china, and china reportedly cutting back on agricultural imports. We welcome the former ambassador to beijing, gary locke. Before that, he was the governor of the state of washington. Thank you for being here. Us that thes to relations between the u. S. And china are bad. Isnt that is is it as bad as it looks . Gary it is bad right now and it is getting worse. Salvo, taking away the special status that hong kong previously received, that on products tariffs coming out of hong kong, may even make it difficult for residents of hong kong to visit the United States. Unfortunately, trying to get at the policies of china in terms of not respecting the one country, two systems, the autonomy that hong kong has previously enjoyed, these types of actions may actually hurt the people of hong kong without affecting the government with the economy of china. Really punishing the people of hong kong who have been protesting for greater democracy and freedom. This will hurt the prodemocratic people of hong kong, and perhaps while sending a message to mainland china, do not hurt china itself. David back in 1997, there was an agreement entered into by china as a way of hong kong coming back. Agreement,olate that is there any way to remedy that . In terms of the agreement, providing autonomy to hong kong, for at least 20 more years or so, china is of course upset that hong kong has not passed some security laws that it was supposed to have many years ago. O tensions have been there just last yearts over a proposal to allow extraditions of people charged be sent back to other countries, including mainland china. Of course, there is little confidence in the rule of law in china that people could be prosecuted on trumped up charges. If they are living in hong kong, maybe voicing dissent, disagreeing openly with the policies, criticizing the chinese government, they could be extradited to the mainland to face prosecution. These are really tough issues. China is, i think, hurting takes in the world if it away the autonomy of hong kong, certainly will not help in reunifying taiwan. They will say, how can we trust the mainland with any promises they have to maintain the democracy of that, which is very strong in taiwan. David we have the largest economy in the world in the United States, second largest in china. We have to figure out a way to deal with each other. Do you see a constructive path forward with china . China has not had a great track ord of agreeing with its complying with its agreements, going all the way back to the wto. I think the world stage, the other countries with which china does business, has investments, is a trading partner with, all of those countries need to work with United States in confronting china. Doing it alonees actually hurts americans and benefits many of our allies. While they have the same warerns, this tariff trade merely makes American Products more expensive in china. Wille chinese buyers purchase something from germany or australia or canada because it is so much cheaper. Those countries have many of the same concerns about the trading policies, economic policies, lack of intellectual protection, the lack of the rule of law, that we have over chinas policies. We should be working in concert with all of these other countries to go after chinas policies, to confront china, instead of doing it alone. These other countries sit back eir companies will get the business. The products are so much cheaper, whether it is soybeans from brazil, semiconductors from the eu, technological equipment,anufactured goods, lumber airbus airplanes instead of boeing airplanes. Unilateral trade war between the United States and china actually benefits many other countries and is hurting american jobs. David ultimately, it is clear President Trump wants china to change its behavior. In your experience, over the years, have you seen the United States, either alone or with others, been effective in changing the chinese behavior . Gary i think we have been able to with democratic and republican administrations. Downve been able to tone their rhetoric, able to get them to be more slow, cautious, less confrontational. They have partnered with the u. S. And our allies on a whole host of issue, whether it is fighting piracy off the coast of africa, contributing to you when peacekeeping forces. Fact, they are the largest supplier of peacekeeping forces to the united nations. Obviously, they have helped him trying to get iran to stop building a nuclear weapon. A lot of those International Efforts have been successful. China has its own ambitions. It is feeling its own power and economic, technological success, and they feel they have been suppressed and ashamed by western powers over the centuries, so they are trying to reclaim what they believe is their place in world civilization. But many of their views, obviously, are not consistent with the rest of the world. To get them to change, to get them to be a part of the world community, whether on trade policy, military policy, respecting other peoples borders, sovereignty, we need to have a united front with other countries, instead of doing it by ourselves. Because it is not working. Finally, you have endorsed Vice President biden, you are a democrat. It doesnt look like anyone is going to be elected this fall by going soft on china. Can you give us a democratic position that is materially different than what President Trump is doing . Gary democrats and republicans concerns,had the same trade concerns with china, lack of an orson of intellectual property, not upholding the rule of law. Certainly, their crackdown on human rights, freedom of expression in the press,ctivists, even ethnic groups we need to be sure in articulating our differences with the policy of the that we aref china not placing blame on the people of china and certainly not andiling and stereotyping discriminating against chineseamericans here in the United States. We need to separate the people of china versus the government of china. Inwe cannot engage xenophobia, profiling, stereotyping, racism. Number two, we need to workingte a position of with other countries to confront china in terms of putting tariffs on their products, but on a global basis, not just the United States imposing tariffs. If china is going to restrict investments on Foreign Companies in china, that all the other countries in the world should be imposing those same restrictions on chinese investments into other parts of the world and not just the United States. So the difference with the democrats is, democrats need to work in unison with other countries to put effective pressure on china to change, instead of doing it United States versus china, because that will not work. Americanally hurts companies, hurts american interest, hurts american workers, and benefits to workers and companies of other countries. Ambassador gary locke, always a pleasure to have you with us. Coming up, we will have the michigan sheriff who took off his home at helmet and marched with protesters this weekend. This is balance of power on Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. As we know, there have been protests all over the country, but one in flint, michigan has been different. The Genesee County sheriff, chris swanson, decided to take his helmet off. He had people put their batons down, and joint with the marchers. We are joined now by sheriff chris swanson. Did you plan that in advance, or was that spontaneous . Chris i wish i was smart enough to do that when i first walked up, but it was 27 years on the job, experience, training, but more importantly, having a hard for people. It was a beautiful moment, a lot led up to it. Heart for people. Approaching the crowd, we could sense the anger, and i knew Something Different had to be done. David we have seen and heard stories of other protests that some are not peaceful protesters. Some are out there to do some damage. How did you know that you didnt have any of those people . What would have happened if there was violence . Chris im actually convinced that there were rioters there ready to be triggered, but the majority of the protesters who have righteous anger outnumbered those. You cannot pick and choose who is there, but as the tensions grew throughout the week, and in eight minutes and 43 seconds, is erased years of Community Policing relationships. Week day that went by last inside it, cause greater attention. Friday and saturday, it let loose. When we knew these demonstrations were coming to flint, we were watching and listening, we knew that they were coming. For the first two hours, we let the group swell, we blocked traffic and moved with them. Then they turned toward the Police Department, we saw what happened in oregon, minneapolis. I thought, this is it, we have to fortify the lines. The local Police Department was the one in focus. They had their officers, our officers in battle gear, batons, when you see across the nation. Walking on with my own helmet on, i cannot believe this is happening. A week before we were here is with the covid crisis, and that we are villains because of one bad act, from somebody who had no business being a cop. We walked up to the line. It was intense. There was fear on both sides. Dont think cops are fearless. After about 15 minutes, i saw a fist bump and a little hug. One of our officers was in the middle and i thought, that is it. We can talk and walk. I took my helmet off, the officers dropped their batons. I walked into the crowd and i found a shot caller, and i said that man is not who we say they are. I said tell me what you want me to do. He said get everyone around. So we hollered out. The second question is what changed history. What else do i need to do . They didnt even think twice. What with us. What i saw was an instantaneous change of heart and soul from people who have righteous anger, but they had somebody they could talk to, somebody in Law Enforcement, a white Police Leader who put everything aside. It is not about race but dignity for all. That moment set the stage. You could protest and have your voice heard, as long as somebody with listen, and walk with them. That is what we did. David i have seen the video. Its an example of Law Enforcement the way that we wanted to be. As you said, it all started with that Police Officer in minneapolis, somebody who should never have been an officer. The vast majority of policeman i they do theirod, jobs courageously, but there are always a few bad apples. Our police having a tough time weeding out those apples . Chris that is a great question. There are 800,000 cops across the United States, hundreds of thousands going to work as we speak. Canne instance, any officer wipe away the public trust. To my Law Enforcement brothers and sisters, we cannot lose hope. We know we do it for the right reasons. Number two, there should not be any agencyp on across the country. Law enforcement has a brotherhood and sisterhood, but when wrong is wrong, we need to call it out faster and more aggressive because we are called to a higher standard. That appleseed out in any profession. But in Law Enforcement there is a higher standard because we take an oath, we gain trust from the public. When we dont act fast to terminate and charge i have personally arrested my own cops were breaking the law. Committed someone who a Sexual Assault while on duty. You cannot even have a hint of minimizing. When wrong is wrong, call it out. David thank you so much for being here, and im really impressed with what you did. That is chris swanson, Genesee County, where my hometown of flint, michigan resides. And uptake in coronavirus cases. This is balance of power on Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. Im david westin. As we open the economy back up, we hope we dont have too many cases of coronavirus, but what is the data showing us . We welcome a columnist who really knows the health care system. Is it too early yet, do we have any news on the early openers like georgia and florida . Ax i think it is too early to tell entirely but what we can say is people who expected two weeks after the expected reopenings, after the governors made these changes to policy, you would see an enormous spike. Not something that has materialized, but you see a lot of areas of concern where there is case growth. North carolina, mississippi, several others. Nationwide, what you see, because of the sheer variation plateauy, is this high of cases that is taking a really long time to come down. That is a matter of concern. That means a lot of cases and deaths every day. Wheres also a situation you have these limited slow reopenings. On top of that, people taking additional personal precautions in terms of their behavior, wearing masks, companies being slow asking people to come back. The difficulty is, if you have that high degree of circulation as states start to ease up and people hes up more, heading into the fall when you have more people inside, that is how you create the potential conditions for those bigger spikes that we all fear, even if they are not apparent at this moment. David where are we on a vaccine or a treatment . Remdesivir isat not as effective as people thought it might have been. Conference theof story of their data to date. Statisticallyve a Significant Impact on a subset , in more moderate patients, but it is not the sort of thing that you would see that would change the trajectory of a virus. It is pretty mild. You are not really seeing the big impact on deaths that you would like to see that would change Public Policy or the approach to the virus. Knows,e, as everyone that will take a vaccine. Moderna is starting a phase two trial, the astrazenecaoxford effort is moving forward. Aat will take time to create kind of data that you would like to have. We need to run big trials in places where the virus is circulating to get a sense of whether it is effective. There are fewer of those places and people are being cautious. Collecting the data packages that you need on safety and difficult andbe timeconsuming with so many vaccines in development. I am hopeful that it will happen but it does fundamentally take a while. David we are all hoping it will be pretty fast and by the end of the year, like the president said, but it is a high order, fair to say. Thanks to max neeson. Will continue on radio for our second hour of balance of power. A formere talking with Senior Advisor to the Bernie Sanders campaign about what is going on in the country. This is balance of power on Bloomberg Television and radio. It is 1 00 p. M. In new york, 6 00 p. M. In london, and 1 00 a. M. In hong kong. Welcome to bloomberg markets. Here are the top stories we are following from around the world. Violence interrupting in dozens of u. S. Cities following the death of george floyd, coming at the same time as the economy struggles to emerge from its coronavirus not down. We examine how the unrest could potentially hamper a recovery. The ceo ofaking with a russian sovereign wealth fund. He will discuss how the country is preparing to provide hospitals. Of putting the coronavirus, youll hear from a doctor designing courses to help people learn how to contract grace. I want to get a check on the markets. You are getting a bit of a risk on tone. Rising after two straight weekly gains of more
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