Transcripts For BLOOMBERG Bloomberg Surveillance 20240712

Opens up today. A little bit of good news there. Of course, on Bloomberg Television worldwide. We say good morning. John, i love that opening where we had Christine Lagarde ooking at g. D. P. , and your conversation with laurence cud low looking at a better than good jobs report. They couldnt be farther away, could they . Jonathan hope bfl this ecovery in the administration. A lack of urgency around the next move on fiscal policy. I think thats critical, catching up with the administration, they were telling me theyre going wait until july to see what the data looks like. When they talk about progrowth policies, i think were thinking about tax cuts and not emand side push. That will be the debate over the next 30 days. Tom a big debate about that today. But john, i notice dow up 9,000 points off the bottom. Dow 18,000, and we continue to advance this morning as well. What is it that sticks out to you . Jonathan you point things out just to wind before he up. So im going brush up on that. What sticks out is a fantastic payrolls report that even on the monday after, we are still going to be talking about for the weeks to come. Do we need data to validate what we do you need to see continuing claims roll over in a significant way, or does this market and this momentum now have a life of its own . Thats the question im looking to get answered later this week, particularly towards the back end. Tom i agree, getting to the back end of the week is absolutely extraordinary. Weve heard this from my number of our voices this morning is the distinction between better quality Investment Grade bonds and the distressed world of high yield. What is the difference . How have they had a dynamic off the bangup job surprise . Lisa theyve been contracting, certainly has been risk on. But i want to build on something that john was talking about in terms of the Market Action today. Nasdaq futures are lower. S p futures higher. Were seating rotation into value, into financial today. Tom agreed, yeah. Lisa my question, is going into the rest of the week, how much longer can we see this rotation into some of the less loved names and away from big tech, which is absolutely dominated this rally, and that may speak to truly how risk on this market is, tom. Tom totally agree. Russell 2000 kind of analysis and growth, and its amazing, the persistence a of that shift last week. Were going to do this this week on bloomberg surveillance, market analysis. Theres no one better to coalesce all of these emotions and intentions than Daniel Morris from b. N. P. Paribas. We have come so far, so fast in this equity market. How do you restructure, how do you reframe on the monday morning in june . Daniel i think it depends on the attitude we had before the news. Weve been in the camp, like a lot of people, that it had been too much, too soon. And if we got more and sooner than we had before, youve either capitulated or youve just become that much more nervous. Unfortunately, were probably that much more nervous. Certainly the data was good, helpful. But when you try think about how things are going to be three and six months from now, and in particular when you look at earnings forecast for the end of the year, there still seems to be a fairly significant disconnect that if anything has gotten bigger. Tom i totally take that point, and the chart of the earnings disconnect is known by anybody listening and watching this program, great. Then what it comes down to is central bank support. Did that go away over the weekend . Dan daniel if wink about low Interest Rates, weve had that for a very long time, the increase in money supply, certainly theres no lack of lack quidity, but i dont think its necessarily that thats driving up the market. So on the margin, Television Comes back to, if you have any kind of setback, that f theres any disappointment when we get into the fall, an increase in infections and concerns about reimposition of the lockdown, we will come back inevitably either to the question, you know, how much more can Central Banks do when theyve already done so much, and if its the need for further fiscal stimulus, at some point weve got to worry about the debt thats being issued. If theres one good thing thats come out about this, and i think you alluded to it sooner, we may not now get as much stimulus in the next rounds as you would have thought before given this data. I really actually think that is a good thing, because because the data is better, you dont need it, and then also, again, we are going to have to worry about the debt level at some point, at least on the margin thats not quite as big of a problem as you might have feared. Lisa a lot of people say the rally in stocks hasnt been entirely driven by fed stimulus, but just the fact that facebook, amazon, microsoft, apple have all done well in this environment with a push to the digital, and if you look at the combined capitalization of the Top Five Holdings in the s p, it has doubled since 2013. How much can we see this rotation into the other sectors that are less loved, givent fact were not cleerp on how much of a fundamental recovery we have in the economy. Daniel i think thats the right way to think about it. And i would divide up the market. One, you certainly have technology, which we all understand is going to be a longterm winner from the pandemic, but at the same time, we also appreciate that valuations have gotten very high just by one measure price to book for the sector, eight times, which is alltime high for the sect tomplet even if we love those growth prospects, youre paying a lot for that right now, so without questionable ability, at least in the near term, poor technology. I think the other part where weve seen those parts of the market that had massively underperformed until recently, you think anything around tirism and will he sure and so on, you know, pretty significant opportunity there for those sectors to rebound, now maybe not sustainably, because a lot of this will come down ultimately to how optimistic we are about getting getting a vaccine and when, but from the valuation point of view, thats clearly an opportunity, and then i think the other risk we need to keep in mind are exactly those defensive sectors that have done well, but have done well because weve been living under lock douns, because we havent had a vaccine. As that starts to ease, these sectors, which have also become quite expensive, arent going to see the longterm earnings support the way you see in it can nothing. So you think around say the markets, excuse me, you think about cleaning supplies and any other defensive sectors, i think thats probably the other key vulnerability that you need to keep in mind when youre looking at your portfolio. Lisa is the Market Pricing in a second wave . Daniel i think the question is twofold. So will there be a second wave . Most people are pretty sure there will be. It certainly seems likely. But its trying to anticipate what the response is going to be. I think at least theres ground for optimism that fine there is a second wave, the Economic Impact wont necessarily be so great. I think theres two reasons for that. One, as opposed to the first wave, we know this one is coming, or at least we can anticipate it, so well be more prepared. Hopefully hospitals will be ready. Well have better capability around tracking and tracing. So hopefully you can have a more focused, targeted response to whatever increase we do see, and we wont need to have nationwide lockdowns where weve had so far. So again, the Economic Impact will be hopefully much less than the first round. I think the second thing that certainly changed over the last couple of weeks, so some degree you could argue the Media Attention has shifted a bit. Its not 24 7 on the tv about the pandemic, and you think about the psychological impact of that. Peoples desire to consume, to go out. If by the time we get to the autumn, if attention has faded somewhat, i think there will be at least beneficial in terms of psychology, even though its without question still going to be a Serious Health issue, people may not feel quite so concerned and stressed about the environment, and therefore you will have a greater need to consumer in a way that we havent seen over the last several months. Jonathan dan, got to leave it there. Dan morris of b. N. P. Paribas. Dan is acknowledging something really important. This is not a judgment. Its an observation about what the market cares about right now. A month or so ago, we talked about reopening, the primary focus would not have been the data, it would have been the wave of infections that we might get as we reopen. And right now, as dan pointed out, there is almost a consensus that another lockdown is substantially higher now than where it was several months ago, and for that reason, many Market Participants are focused less on the increase in infections, which, to be clear, were starting to see in some states in america, and much more so on the sequential monthonmonth improvement we could get now and in the months ahead. Tom theres no question about that, and, of course, the hurdle right there is difficult businesses Like Airlines just as one example. But john, what i find so extraordinary here is as mr. Morris mentioned, the dislocation from earnings. We all know that. Theres no question thats apparent and the market just completely ignores that chart. Jonathan do you think its easier or more complex after the data on friday . Tom the fed . No, i think their job is much easier. I think the work on that jobs report was great. Lisa mentioned earlier, add three Percentage Points in, its still a grim, grim report. I think the feds got a much easier job on wednesday. Jonathan chairman powell this wednesday, full coverage, of course, every singe meeting right here on bloomberg tv and on bloomberg radio. For our audience, from new york city, alongside tom keene, im jonathan farro with Lisa Abramowicz getting you prepared for the market open, with futures adding some weight to the rally of the last three weeks. The s p 500 up by 16 points. We advance a half of one percent. Outside of equities in the bond market, the theme continues. Treasury yields higher up by a basis point to. 9 . On a 30year, steeper curve, up two basis points. From new york, this is bloomberg. Ritika with the news, im ritika gupta. New york city starts to reopen tosmede new york city will allow construction, agriculture, manufacturing and wholesale trade to start operating again. Retail stores can offer Curbside Pickup if all goes well new york could expand reopening in two weeks. More than 17,000 in new york city died from the coronavirus. An aggressive proposal from the minneapolis city council, a majority of its members say they support disbanding the citys police department. That comes just as the state launched a civil rights investigation following the death of george floyd. One city councilmember says she wants to end policing as we know it. Lawmakers say disbanding the police force starting a new one would be a long, complex process. The opec plus coalition extended its historic Oil Output Cuts by an extra month but saudi arabia continued it wont continue with additional cuts after june. Up brent has more than doubled since late april. Its still down 35 this year. American auto demand is coming back faster than expected. Thats led ford to crank up production of its highly f150 pickup in michigan. And that has some workers on edge. Theyll make more money due to overtime and the extra saturday shift that ford is adding. Global news 24 hours a day on and air on bloomberg, powered by more than 120 journalists and analysts in more than 120 countries. This is bloomberg. I dont know about the get Congress Fast part. We have taken some time off from legislation. Even though were talking to both parties, we will come back, i reckon, after july fourth, and well have a good discussion. Jonathan larry kudlow speaking to us right here on bloomberg tv and radio. Alongside tom keene, im jonathan farro together with Lisa Abramowicz. This is bloomberg surveillance. It is the big conundrum for many people. We see it littered throughout history. Every single chapter, whenever theres a crisis, when it begins to fade, the collective will starts to fade with it. Is that what were seeing play out in washington, or will we get a positive surprise in the onths to come . I think we have a connection problem, at least i cant hear tom keene. Im going get you price action. We advance to the s p 500. We are positive a half of one percent. Thats the price action in equities. Lets get to the bond market for you. Treasuries set up as follows. 10year yields higher over the last several weerks up a single basis point to. 9 . In foreign exchange, the euro is slightly negative. Euro unchanged. Euro dollar flat. We can head down to washington, d. C. Now and catch up with kevin cirilli. It was the moment friday when got a lot of peoples attention in this market when they talked about the next stimulus effort. As we wake up this monday morning, on that specifically, where is the collective will at the moment to do more in the months to come . Kevin im hearing from a republican law make theres sometime between july 23 and the first week of august before lawmakers go on their august recess, that thats when potentially you could see another congressional vehicle make its way with bipartisan support. But i think you touched on something really, really important, which is that as states have begun to reopen, particularly republican states, there is that there is less w incentive for some type of massive overhaul. They want to see open guidelines. Mitch mcconnell, he wants to make sure that should businesses reopen, that theyre not going to be on the hook legally speaking for there to be legal questions or legal lawsuits for individuals who might contract covid19. So theres that element of this. And then, of course, additional funds for businesses who are going to have to mark the elevators, mark the floors. Today is my first day back in the bloomberg bureau, and i can tell you, the entire building has been remade to adopt social distancing norms. Tom id ask if gucci is open across the street, but i dont want to go there. What i say is so, so important here, and you bring it up, the great bargaining chip of liability of businesses over lets go, lets go, lets go. Isnt that what this is going to be, a trillion dollars here to protect businesses down the road . I mean, is it that simple . Kevin theres that issue, absolutely, and leader mcconnell would point to all of the conservative judges that have been appointed during the president s first few years in office. But then theres this other issue collectively of reopening and allowing for there to be, again, some type of new normal that is adopted. But i think if you look at the jobs numbers on friday, republicans are feeling bolstered by that. They feel more energetic, but democrats are saying, hey, not so fast, theres a lot of questions here, and there is some more aid thats needed. Lisa im wondering about the Unemployment Benefits, which are set to run out here at the end of next month. A lot of people saying this has propped up a lot of individuals on the lower income side of things. How much republican willingness is there to extend these benefits given the fact that we are starting this reopening and theyve heard from employees that are saying we cant compete with what youre offering to pay our people, and if you dont end these, its going to make our job harder. Kevin zerks nada, flyers zero te at zero, nada, appetite. They want to make sure theres incentive and individuals are able to get back to work once states reopen. When you talk folks at the labor market, they point to that as well. If something is reopening, folks have to get back to work, thats the argument were hearing. But that tension of safety versus the economy on full display. Unfortunately on full display for underserved communities. Jonathan kevin, great to catch up with you, sir, down in washington on really, really important issues. Lets pick up on what you just mentioned on the enhanced Unemployment Benefits. Good news on friday is that it doesnt seem that those enhanced Unemployment Benefits discouraged return to work. There was a huge issue potential that will some people wouldnt go back to work because. Enhanced Employment Benefits they were receiving. I would say the jobs report eats into the argument a little bit, and that was something larry kudlow had to acknowledge on friday. Do they extend or enhance . I think listening to them at the moment, listening to the administration, the bias towards enhancing the Unemployment Benefits, and what i mean is adapt them instead of extending them, maybe providing some incentive for a return to work. I think thats what the administration wants to see, and when they talk about pro growth, were talking about supply side efforts, not necessarily a support to consumption that we saw over the last couple of months. This is something weve been touching on over the last several weeks. As you go from a shutdown to reopening, how does the nature of the policy efforts shift . I think were getting subtle hints in the last week on how they might go about doing that. Lisa and some of the details as i read about it over the weekend include how do you supplement peoples income, lets say if an Employer Needs to hire people back, but not fulltime, how do you fill out their salary so they can continue to receive their income and theyre not penalized for going back to work parttime . Thats one of the proposals. John, you raise the idea that the preliminary data does not seem to suggest that the enhanced Unemployment Benefits is preventing people from going back to work. I will just add to that, if you look at the savings rate, it has been increasing. People are not spending everything that theyre bringing in, because they are preparing to not necessarily have a job later to go back to. People are aware that this is temporary and they are preparing as such. So as people look at policy, to kevins point, it doesnt seem like theres a lot of willingness to end this at this point. Jonathan so many people say its just one data point. Many people said on friday, ignore it, it wont tell you anything. How that conversation shifted in this seconds after we got that huge upside surprise, and i want to go to something that we mentioned at the top of this hour. Do we need the data this week to confirm the optimism that that jobs print on friday poured fuel into . Do we need to see that in continuing claims this week just roll over to validate what we got on friday . Tom guile to continuing claims as being important in the weekly data, the fourweek moving average of jobless claims. But john, i want to make clear, if you knew nothing about this pandemic, and you saw the q4 estimates of where this economy is and where this job economy is, youd think it was a depression. I mean, where were going is still pretty, pretty grim, and i just cant believe into an election that both parties can ignore that, and i would suggest Lawrence Kudlow and the president understand that, and mr. Minimum children a lot better than senate conservatives. Jonathan valid point, and i think the administration does get it from the conversations i have with them on a monthly basis. For this market, if you went to sleep at the start of the year, in fact, maybe in the middle of february with a nice portfolio and sat out the last three months and woke up this morning, youd wonder what happened. From new york city this morning, good morning to you all. This is bloomberg. Jonathan from new york city, this is bloomberg surveillance. , imside tom keene Jonathan Ferro together with Lisa Abramowicz. Three weeks of gains on the s p 500. We are positive 22 points on the s p 500. , 330 200. 7 what a turnaround. Real yields higher. The curve steeper, up a single basis point. A ton year yield, of dollar weakness against euro strength. We take a pause. Eurodollar unchanged but the dollar weaker against the norwegian krone and the swedish currency and the aussie dollar in the mix as we reopen in new york. Phase one in new york city. The long road ahead to normalizing and getting the rest of the economy open. How quickly can we normalize . Still a huge question for most people. Tom to me in this city it starts with retail and restaurants. It will be interesting to see what phase two and phase three. For me with yields higher, phase four or five has to be the clarion call when do we get the real yield back with Jonathan Ferro . We are doing the simulcast, but people are begging, begging for the real yield to come back. It speaks to the yield environment we are in. One of the outcomes has been higher Interest Rates. That has been a huge surprise. Jonathan i can say up front i do not have any news. If you want to find out, please get in touch with my manager. I would like to think people have bigger priorities, though it is nice of you to say so. I think youre on the right point. That is treasuries. Yields higher. The curve steeper. How comfortable will the fed be with what they are saying . Whether that would cap yields at the front end. The scope of the surprise is whether they look at doing something around the longer end. That is certainly not the base case, i wonder how comfortable they are with the retracement we have seen at the longer end of the curve. Tom let me give you a window into this. It works on radio and tv because it is about charts. The street looks at yield on an arithmetic basis. Yieldists usually look at on a long basis. When you do that, what you will see is yields plunge down, but even with this move back to barelyyields, yields are back to trend. It is in no way on a long basis a yield to break out for chairman powell and the people around him. Jonathan i take your point. It is a point well made. The more digestible way of explaining what you said is on a historical basis, yields are still incredibly low and they are still incredibly low. They are also sensitive to what happens in markets and the repricing of them. A lot of supply coming from the treasury. They do not talk about it. Most people assume Central Banks worldwide want to accommodate their governments ability to come into this market and issue more debt to support the economy. I think it will be a big focus for the weeks to come. Tom a big focus. We celebrate in new york city this reopening. Simulcast is our thomas costering, Wealth Management in europe. He writes very thoughtful reports for people with real money at risk in europe. That rebounds over to the United States as well. Thomas, what are you hearing from the clients . They are seeing disinflation, they are seeing outright deflation. They are living negative rates. What are they telling to you . Is abouthe anxiety policy action, including the fiscal side and Monetary Policy side. We have seen gigantic fiscal policy groups in the u. S. , but now increasingly europe. The question is who will pay for that. On the Monetary Policy side we have seen action dwarfing what happened during the Global Financial crisis. You see the Federal Reserve buying corporate bonds. The Balance Sheet moves to more than 7 trillion. That is unprecedented. Our job is to get things into perspective. Deflation more than hyperinflation is a real threat, although we see growth remaining. We do not see a vshaped recovery out of the coronavirus shop. Out of the coronavirus shock. The policy action has been massive on the fiscal side and the monetary side. Jonathan we are just starting to see yields drift higher. How comfortable do you think the fed will be without repricing as they consider the next phase of their Forward Guidance . Thomas it is interesting. The fed is looking at financial conditions in general. Financial conditions are not very loose. Corporate issuances down. Debt issuance is booming. The dollar also sliding. You have a slight pickup in yield. We have to take the historical perspective. 10 year yields are still very low. Overall financial conditions remain very loose. I think the fed will be happy. I think they want to keep financial conditions very loose. Some say too loose. Of the fed qet program. We know the fed qe has been slowing. Less treasuries for the last few weeks. The market is getting impatient. Twist, ite fed could is a fair test. I do not think the fed will overreact. The fed will continue to say the recovery will be slow and therefore accommodation is needed. Therefore, they are studying yield curve control and yield curve caps. Right now they are busy deploying the existing measures, including the main Street Lending program. That could take some time. , i do not think theyll panic because the tenure year is going up. It is not going up by much. Environmentup in an of loose financial conditions and they are happy with that. Lisa they will not be worried . Rate there is a question at a certain they will not be worried yet. There is a question at a certain point globally given the amount of debt countries are barring. No one can sustain material increased in borrowing costs. How big can the Federal Reserve Balance Sheet yet before it gets to be a political liability . We are hearing 12 trillion next year as a likely target. How big can it get . Thomas the problem with qe infinity is a vague promise to buy bonds. I think analysts like to see mark carney more concrete numbers. The fed will be asked about concrete numbers. How much will they bind a weekly basis Going Forward. That is more concrete than qe infinity. Infinity youre slowing the purchases. Theres is a problem with communication with qe infinity. U. S. Cannot sustain much higher Interest Rate and that is why they potentially cap Interest Rates. Buywhile they are able to much more bonds, i think 10 trillion Balance Sheet is not sustainable, and the fed can do it. T we have seen is the fed the market itself is quite ok with the rising Balance Sheet and the fed absorbing most of the issuance. , even though the fed is not directly buying from the government, it is buying such huge quantities that you could argue it is doing some deficit financing already. The market is fine with it. Jonathan the market seems to be fine with a lot. Always great to catch up with you. Thomas costerg. Lisa, lets build on that. For me, if the central bank has credibility, they do not have to do a lot. The central bank we are talking about, the Federal Reserve, lost credibility going into the huge drawdown in march and had to buy it back aggressively. From where i am sitting and i look at programs that come from the ecb and the Federal Reserve, some of the most effective ones are there ability to do a lot without doing much at all, the announcement of fact. We saw that the announcement effect. We saw that with the fed credit programs. Primary facility still is not up and running. We saw that with the ecb almost a decade ago. If they go forward with yield curve control, as long as the fed has credibility they will not have to buy that many treasuries to cap shortterm yields. That is what is critical and that will limit the expansion of the Balance Sheet over the short and mediumterm. Lisa i agree with you and i think that is the hope. They are signaling will overwhelm having to go out and do it. There is a supply and demand dynamic we are seeing increasingly. The u. S. Is selling an increasing amount of longer dated bonds at a time for an have pulled back. The net buying has come from the Federal Reserve. They are the swing factor. Otherwise there is not the same sort of demand there has been in the past to soak up treasury issuance. This is absolutely the case that signaling is important. At a certain point, the supply and demand dynamic will overwhelm that, and that is the concern of a lot of people in the treasury market. Jonathan i would agree with you to an extent. Let separate what happens to the front end and the longer end. That is what is interesting about how they announced yield curve control. Is it focused on the short end or they try to cap what happens over the longer end. To give Credit Suisse into the conversation, Jonathan Golub just published and it summarize what we have been talking about. Over the nearterm, sequentially improving data will warm investors hearts. Over the intermediate term, focus will shift the how long it will trip take to regain precrisis business and employment levels. This is a question for another day, right now the market focused on the former and not the latter. Tom i will go with that. From dow 18,000 up to 27,000. You wonder Going Forward after making up all of that distance. Great sectorbs , it is just as much where not to be right now. That will be a tough decision for every participant. Jonathan this equity market improves as we count you down to the opening bell. We advanced 20 points on the s p 500. Tvm new york on bloomberg and radio, this is bloomberg surveillance. York ritika new york city mayor bill de blasio is trying to lower expectations as the city begins to reopen. He says he sees indicators at going in the wrong direction he will be evoking you will be vocal about it. Construction, manufacturing, and wholesale can resume operations. Retail can operate Curbside Pickup. The president is trying to link joe biden to activist calls to defund the police. The goal seems to be to portray the democratic candidate as weak on crime. Protest over the death of george floyd have the president on the defensive. Order to pull 9500 troops out of germany has rocked the post world war order. It is a sign of the disconnect between washington and berlin. President trump has criticized Angela Merkel for not meeting defense spending targets. It is a sign the Worlds Largest auto market is rebounding from the coronavirus crisis. Thesales in china rose for first time in almost a year. Sales were up 1. 9 . The government added stimulus measures such as a tax rebate to attract consumers back to showrooms. 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 ritika gupta. This is bloomberg. There is still the case that we have had permanent losses of employers, permanent losses that will not come back. That will be a darker cloud. Jonathan Jeff Rosenberg of blackrock on the limits of the recovery. Lisa abramowicz touching on the permanence of some of the job loss. Alongside tom keene, im Jonathan Ferro together with Lisa Abramowicz. This is bloomberg surveillance live on bloomberg tv and radio. Equity futures just off session highs. Fed andced. 6 on the on the question as to whether the data this week will validate the improvement we got in the payrolls report. Later i will be catching up with Mike Schumacher from wells fargo later this morning. Tom it will be interesting to see. Some of the mysteries about the jobs report to be addressed by mr. Schumacher and others. Everybody recalibrate on the jobs and a major message through this morning. Not so muchstery, to the end of this week but the mystery to get out to late august and early september. I saw a lot of tentative this weekend. One of the great things is we take it for granted. Is the take for granted getting around of new york. Canan be 70,000 people, a be by any means of conveyance, but it looks a lot easier than it actually is. Is with us on this day of reopening for new york city. We welcome him across the nation. Chiefsmall job executive officer of the metropolitan transit authority. Congratulations on getting to this point in this pandemic. It has been an extraordinary effort. Give us an update on the last two months. What surprised you about what needed to be done in the city for the mta . Patrick thanks for having me. It is not a surprise, but i am awestruck and overwhelmed by the folks, mta operating subways, buses, they were literally heroes moving heroes. The pandemic, the epicenter has been new york city and the new York New Jersey region. The losses, whether fatalities, illnesses, economic damages have been extensive. The mta workforce has done a tremendous job. The second thing that strikes me is the precipitous dip line in ridership, which paradoxically is a good thing. It was new yorkers responding to governor cuomos directive and suggested directed by executive order with the force of state law and also with suggestions that the way to minimize the number of cases and fatalities in new york city and new york state was for people to stay home and not ride Public Transit except for First Responders and essential employees. New yorkers answer that call. Today we are restoring all service on the subways. Last week we did a physical , andy of 50,000 customers mass compliance, which is now part of state law, was 92 . The most important thing our customers can do is wear a mask to protect themselves and their cocamus yours and their cocommuters and our employers and the 92 is an impressive number, one we want to drive higher. Tom how are you going to police the use of masks . I am on a train or a bus and are two idiots without a mask. How do you police that . Patrick first, we are starting from a good place, which is 92 compliance. I spent 40 minutes and Grand Central terminal and the customer compliance looked higher than that. What the mta is doing this morning in subway stations throughout the system is distributing the 2 Million Masks. We had 11 Million Masks donated by the state and the city. We have mta employees and volunteers helping distribute those masks. The most important action that can be taken by our customers is wearing the masks. 92 is a good start. We will monitor it Going Forward. On top of that, we are disinfecting every subway car, every bus, every metrorail north of long island. At least once a day, and in the cases of buses and commuter rails, multiple times a day. We are disinfecting our stations at least twice a day. We announced the great news that , according to research, kills the covid19 virus. We are piloting that. Last week, this week, and next week. Beyond that, we also looking at antimicrobials, which promised to have the ability to eradicate thatovid19 virus to do months after application. Tom let me bring in my colleague Lisa Abramowicz. Lisa . Lisa one thing im struggling to understand is how quickly ridership has to get back up to near where it was in the past in order for the mta to remain solvent without federal government help or additional borrowing through the feds new visibility. Patrick great question. In the cares act the mta received over 3. 8 billion. The heroes act, which was passed by speaker pelosi, and both of those reveal the work senator schumer and that congressional legislation did on a bipartisan basis. ,ike every Transit Agency ridership has declined precipitously. That is the flipside of new yorkers responding to governor cuomos directive and request people stay home. Today is an important day. Phase one of the recovery of new york. We are providing solid reliable subway and bus service this morning. There been no delays reported. We see mass compliance at a high level and we believe lighter ship we believe ridership is headed higher. We are in the phase one, significantly below the ridership in prepandemic days. Agencyvery other transit will require federal aid to get us through 2020. Half of our revenue is based on fares and tolls, the other half is undedicated taxes and subsidies which are economically sensitive. Action on the Municipal Liquidity facility is important. Mtarnor cuomo has named the as one of the revenue bond issuers in the state of new york that is eligible for an mfl application. Much, patricku so foye, the chair and ceo of the mta. We appreciate your being with us and we hope you can come back to provide us with an update as to how the reopening does go. Coming up at 1 00 wall street time, do not miss this. David rubenstein speaks to gm chair and Ceo Mary Barra about the road ahead for the auto industry. This is bloomberg surveillance i am Lisa Abramowicz alongside tom keene driving the conversation forward. This is Bloomberg Television and radio. When you say what youre in the mood for, the xfinity voice remote will find exactly that. Happy stuff. The groups happy, im happy. You can even say a famous movie quote and it will know the right movie. Circle of trust, greg. Relax, the needles are jumping. You can learn something new any time. Education. And if youre not sure what youre looking for, say. Surprise me. Just ask what can i say to find more of what you love with the xinity voice remote. From a reopening new york city, good morning, good morning. The countdown to the opening bell starts right now. Lets begin with the price action. The followthrough from friday is positive. What he futures up 19 points on the session. Up. 6 . Three weeks of gains on the s p 500 and we look set to add some weight on the opening bow. Elsewhere, the story of last several weeks. We continue the theme this morning. 10 year yields up to 0. 9 . In foreign exchange, the dollar weaker over last month. The euro coming back a little bit over the last several hours. That is your price action. Lets begin with the big issue. Finally a little bit of good news for the american economy. We will go back to having the greatest economy anywhere in the world. Nothing close. We will have a good upcoming few months. More and