Lets get some deeper knowledge into what is going on with scarlet fu. Scarlett we saw indexes fall to their lows right around the time apple made the announcement. We know there was talk about the increased number of cases across certain parts of the United States. Apple says it will shut down 11 Stores Across florida, north carolina, south carolina, and arizona because of increased cases. That probably dragged down some of the other indexes. Financials are the laggards right now in advance of the feds stress tests. The central bank will consider the virus impact to guide whether banks can pay dividends. Small caps were hoping to lead on the way up, now helping to lead on the downside, although we are making a bit of a comeback. Through the 42 level but could not hold on. One thing i could not keep my eye on of is wirecard, the train wreck of the week. The stock rounded off a twoday 75 plunge in germany. Short covering could be limiting the losses as investors brace for default. Able to release their annual report because 2. 1 billion dollars in cash is unaccounted for. We head into the weekend, one thing to keep in mind, there may be a case of not wanting to be too long heading into the weekend. Trader wrote, investors will be focused on the president s campaign rally, specifically what would be the optics of a packed arena with or without masks in a part of the country where the number of Coronavirus Infections is starting to increase. Vonnie thank you, scarlet fu. Speakinghair has been we were listening a couple of days this week on capitol hill. Today he is honoring juneteenth, talking about the downturn worsening in inequality. On thisop billing friday, which is of course juneteenth. Coronavirus slump has worsened economic inequality that has long existed in america, creating more suffering for low income americans and minorities. For more, lets bring in Alicia Levine of bank of new york mellon. What do you make of the amount of the talk of inequality, and what can be done . The stock market is an alltime highs and does not seem to be going anywhere. Alicia nice to talk to you again. The issue of the downturn is problematic. Even as the market moves ever higher, we know the real Unemployment Rate in the u. S. Is probably close to 25 Million People when you take in all of those categories of those working parttime, employed but not working. It is true that minority communities have always felt the pain more in times of downturn. I think it is great that Corporate America appears to be some ofd to righting that as the economy recovers. It does feel like business is taking a role here, which is great. Vonnie what about the leadership of technology and Growth Stocks . Does not continue indefinitely . Alicia the thing about the Growth Stocks, the five large cap techs have outperformed the rest of the s p by 30 percent year to date. That is the largest disconnect ever in markets. Stocks are now 12 of the market, which is enormous. It was not even the case in 1999. It is not entirely built on air because these Business Models have changed and have benefited from the lockdown. If you think about where growth goes after this, lets get past the recovery phase. What is the steadystate after that . A loan growth world in a low growth real economy world. The assets that to the best are the Growth Stocks. That is what these stocks are reflecting. They have runway into the future. Vonnie what are you doing about treasuries, as the typical portfolio gone by the wayside . Alicia i dont think so. Even though yields are historically low, you still get protections from volatility. We saw that last week when the market sold off 7 . You have gotten protection from treasuries. Bonds areh historically expensive, you need them from protection from your other risk assets as a hedge. We think its important that you have some exposure to treasuries. You will get the protection, even though yields are so low. Vonnie do you anticipate any kind of a vshape recovery . If not, what should one do for the rest of the summer . Alicia thank you for that question because our team just put out our new model for the quarter. Optimistic in the Second Quarter and more optimistic in the Third Quarter that we could get a vshape recovery. That is our most likely scenario. There is clearly risk to the downside for other scenarios playing out. But we think there is a lot of evidence that the consumer and the individual has an appetite to reengage with the economy much more than we thought would have been possible three months ago. There is less likely to be shutdowns, even though the news today about apple shutting some stores there will be spikes here in there, it is unavoidable. We are living with the pandemic, the way that sweden lived with a pandemic. There will be news from time to time that threatens that narrative. Ultimately, for the most part, in the short term, for the next six months, you will get that vshape recovery only because the fall was so deep and terrible, the data will be better the next six months, and we will be flattered by the fact that we dropped so low. Vonnie thank you for joining us, Alicia Levine. I want to reiterate some of the headlines coming out of the powell event. Speaking with Loretta Mester through a Video Conference about building a resilient workforce in the era of covid19 with a acus on youngstown, ohio, year after the gm plant was closed there. Really focusing on inequality, low income workers and minorities, paying tribute to juneteenth. He says it is not lost on me that we are meeting on juneteenth amid a renewed reckoning of racial injustice. He says the spread of the virus has created hardship and suffering. Be path ahead will challenging, but he does on the american people, particularly during the dedication we are hearing today. Now lets get to some of the rest of the news this afternoon. Mark President Trump says the biggest risks to his reelection effort is mailin voting. In an interview, the president said it is rife with fraud that could cost him a win. Hascoronavirus pandemic upended the 2020 election, raising concerns about how voting will take place. During that interview, he warned other Republican Senate candidates that if they dont support him, they will lose. More signs new york is recovering from the pandemic. Governor andrew cuomo said today would be his final daily briefing. Seven daysn updates a week for more than three months. He says less than 1 of new york residents are infected with the virus. He added, we are controlling the virus better than any state in the country and any nation on the globe. New york city is expected to enter its second phase of reopening on the day. The uks showing signs from emerging from the coronavirus outbreak. The government today lowered its other level by one rank. Officials say the virus is no longer spreading exponentially after almost three months of lockdown. The new level allows for some relaxation of social distancing measures, something that hot online been happening with the opening of nonessential shops. In australia, Prime Minister Scott Morrison is morning of a cyber attack. Health the government and Education Services and various industries have been targeted. He did not reveal the source of the attacks but blame them on what he described as statebased actors. 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. Vonnie this is Bloomberg Markets. Im vonnie quinn. Time for the latest Bloomberg Business flash. American airlines trying to raise 2 billion from a job on sale. The company is sounding out investors at an 11 yield. The debt may be backed by assets such as airports and gates. The Worlds Largest wealth manager is telling rich clients to leave stock bubbles today traders. Aging director says that is where hobbyists goes. Wirecardy, the ceo of as quit after disclosing shortfall of 2 billion. Two asian banks who were said to be holding the money said they had no relationship with wirecard. Ved today. Bit of a uturn, planning to reopen most of its locations july 15. They expect every major city to allow audiences back in time for the premiere of disneys mula n. The ceo says the company is spending millions on protocols for cleaning and will require customers to wear masks. It did say previously that that was not necessary. Amc is up 1 now. New york city on track to enter the second phase of reopening monday which includes the reopening of dining but outdoors at city restaurants. Even as cities began to reopen, International Restaurant tour and chef of red rooster, Marcus Samuelsson says the Hospitality Industry is in crisis and will be for a long time. Thank you for joining us. Obviously, you are a huge employer in the Hospitality Industry. And in the last months, we have seen huge vulnerabilities in this industry. How do you imagine the reopening will affect your industry, will it help to have Outdoor Dining at the least . Marcus it has been a tough couple of months for all of us in the industry, but today is a big day. Were opening red rooster creamery. This is our to go shop, take out and delivery. We had a line out the door. We are fortunate because we have a lot of space, we have an outdoor patio where people can order, sit outside, very casual. Anyone that has outdoor facilities can open and be quite successful. Its a combination of technology, great product, and outdoor access, keeping it super safe and clean. Vonnie do you expect things and umbrellas, and that is the sort of thing that will save the industry, or will restaurants have to wait until Indoor Dining is allowed . Everyhat is restaurant is different. We are fortunate here to have a lot of space, so we can do that. Exactly what you are saying, we built benches, we ordered umbrellas. It works out well for us. Every location cannot do that. Is very strong, very resilient. We are going through a very difficult time but we will come back. We will also innovate. All of us are innovators in a way. I cannot wait to see what the new connectivity products will be. In tough times, innovation always goes up. Vonnie Restaurant Owners are saying it is the younger crowd that is more likely to come back. Backcan you do to bring families, people with older relatives who may be a bit more reticent . Marcus im going to show you our audience up front. Everyone today wants to get back out there in a safe way. Our audience is very mixed. Of course, it is young, but it is diverse. I have to jump in. We can almost smell everything coming from the kitchen. As you can see the outdoor patio, it is really. Bout creating a space an vonnie looks like people are standing in line, desperate to get back in for some well cooked food. You have obviously employed so many people, not just in the Hospitality Industry but musicians, you allow for the cultivation of entertainers working in your restaurant that can do other things on the side. How do you imagine employment will be affected as people are getting Unemployment Insurance now, but that will run out . Marcus we have to do it in stages in terms of, we are trying to bring back as many people as we can. Eventually, we will be adding the music component. A full reopening may not be until next march, but we are doing it bit by bit. It is important to have food, connectivity that people want. Theelieve in our project, delivery, the pickup components. The more people that come through, we can add on. No doubt, this is one of the lifetime,imes in my but we have to change our model. We are now serving outside on this grassy field. We never thought we would have to do that. Innovation comes in challenging times. We will navigate our way through. Vonnie you have a huge history with sweden. Obviously, they help you win those james beard awards. Sweden has been a bit controversial in how they are handling the coronavirus, but there are things that would have made it easier, such as Health Something thet u. S. Had embraced. What are your thoughts around the systemic difficulties in the United States . Marcus it is definitely a big moment for america to look at its core issues with health care, unemployment. You cannot build a system at the same time as you are under his pandemic. Sweden took a very different path from the rest of the world. That is going to be argued in a post discussion about that. But what sweden does have is a working health care system, unemployment system, and that is exactly what america needs. You think about this pandemic, it really shows which countries are prepared to deal with Something Like this. Black and brown communities, marginalized communities are being hit twice as much, and it is being linked to not have great access to health care. We have to learn from this time. The richest country in the world, we have to take care of each other. Vonnie i want to point out to everyone, with the help of audible, you have also done a lot of work to support kitchens in miami, for example, newark, and other places, along with shadowjose andres. Talk about the black lives matter movement. It is something that you always been active in. Marcus first of all, i want to give a shout out to world central kitchen and chef andres. You are right, we have partnered with audible, michael b. Jordan. Weday, we serve 100 reached a goal of serving 300,000 people. People from all backgrounds can come together and really step up. Of african origin, thereblack, an immigrant, muchpandemic that is bigger than covid, and that is the pandemic of racism. Havingoud that we are this Big Conversation in america right now. 2000 cities in america are demonstrating, protesting peacefully. Citizens around the world of marginalized people are being inspired by this. It is clear that on the day of juneteenth, the liberation of texas slaves, we can think about american history, its history with slavery. We as people have to do better, look forward, but also learn about our past, and make sure it doesnt happen again. Marcus samuelsson, thank you for joining us today, for showing us all around your kitchen. Marcus thank you so much for having me. See you soon. Marcus samuelsson, perhaps best known for the red rooster, but with a huge history in cooking and employment as well. This is bloomberg. Vonnie this is Bloomberg Markets. We saw a turnaround midsession, and that is deepening. The s p 500 is now down have it set. The dow is down. 7 . Even the nasdaq is down now. 2 . Whichquadruple witching means we could have spikes throughout the day but there was also the news from apple that it would close some stores after having said it would reopen. Stores in florida, north and south carolina, arizona will be closed because of covid19 spiking in those states. That is definitely not helping things, particularly the nasdaq. Apple is down. 8 . The Developers Conference on monday, so this may not hold. Amc is higher because they are now saying patrons will need to wear masks indoors and is argeting the disney mulan premiered to open across the country. This is bloomberg. Y. This is bloomberg. [ sigh ] not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. The kohler walkin bath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. Kohler is an expert in bathing, so you can count on a deep soaking experience. Are you seeing this . The kohler walkin bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkin bath provides independence with peace of mind. Ask about saving up to 1500 on your installation. Mark im Mark Crumpton with bloomberg first word news. President trump is not ending up on giving giving up on ending daca. The president tweeted that the administration will be submitting enhanced papers to the Supreme Court shortly. The court ruled yesterday the administration violated federal law when it ended the program. Governmentid the failed to consider the hardship on daca recipients. Texas republican senator john cornyn is introducing legislation to make juneteenth a federal holiday, increasing the chance the measure can make it through congress. Juneteenth was first celebrated in texas to commemorate when slaves learned about emancipation. Senator cornyn says making juneteenth a National Holiday is an opportunity to reflect on history. In florida, the coronavirus pandemic is showing no signs of slowing down. Officials reported more than 3800 cases today, a jump of 4. 4 from the day earlier and the biggest spike since the outbreak began. Florida has had nearly 3100 deaths, one of several states experiencing a surge in infections. Apple is temporarily shutting u. S. Storesof its again after cases of covid19 spiked in some areas across the country. Closures will impact 11 Stores Across florida, arizona, north and south carolina. Apple closed all of its stores outside of china in march to curb the spread of the virus but had reopened a majority of its u. S. Locations. 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. Amanda im amanda lang in toronto. Welcome to Bloomberg Markets. Vonnie im vonnie quinn in new york. We are joined by our bloomberg and Bnn Bloomberg audiences. Here are the top stories we are following from around the world. President trump wants potential protesters ahead of his tulsa rally tomorrow after moving the event initially scheduled for today. We will discuss u. S. Politics with tina fordham. And the court battle over boltons book. The Justice Department goes to court today in a last ditch attempt to block publication. We will bring you the latest from inside the hearing. And the corporate response to black lives matter. Twitter, nike, and other Companies Making juneteenth a paid holiday. We will discuss Corporate Americas pledges to fight systemic racism. Markets seem to be preoccupied today with the resurgence of covid19 cases across the u. S. There is a mixed bag of negative ins, including the jump cases that has prompted apple to close its doors some stores in florida and arizona. Other than health care, energy has offered some strength. Oil was modestly positive. Most of the sun have been negative across the board. Weak,ig tech is also weighing on things. Apple is down 1 , of course, as requirehear amc will customers to wear masks in theaters. As the state of california suggests, folks should be Wearing Masks all the time when they are out and about. Even as the concerns about covid19 mount, concerns of a second wave, we have president planningk on the road his first rally in months in tulsa, oklahoma. That will take place tomorrow. There are concerns about the potential health risks. Some are bracing for protests as well. Tina fordham is with us right now, head of global strategy at avon hearst. Lets start with the relevance of the rally. It has been a bit of a lightning rod because of how it fits into the middle of not just covid19 but the many race related protests that have been going on across the country. Absolutely. The choice of tulsa as a location, President Trump says he does nothing to do with the fact that also was the sight of what is regarded as the biggest massacre of black americans in the history of the United States and also was originally ,cheduled to be on juneteenth the celebration of emancipation of american slaves, the rally was moved by one day, but we are still seeing inflammatory language from the president cautioning protesters. This is coming after a couple of weeks of large, sustained protests against racial injustice. Obviously, everyone who will attend has to sign a waiver suggesting they would be nobody at fault worthy to come done with covid. This is bordering on irresponsible, if not well beyond. Tina this is where alarmingly the Political Polarization that people have been talking about for many years, and abstract concept for investors. About marketd performance at the open being influenced by a spike in covid19 cases. Between black lives matter protest and the resumption of campaign protests, is this going to cause a spike, are we going to be in a feedback loop in the runup to november election that will dampen hopes of a vshape recovery or any recovery at all, or that matter for that matter . Amanda with all of this comes the distraction, if you want to call it that, on the bolton book. Looking at one headline coming out of this hearing, it looks like the judge is saying, the horses seem to be out of the barn. Much of the content already leaked from the book. Give us your take on the significance of this coming now, and the impact it may have. Lets remember that john bolton was the president. Ational security advisor for most americans, Foreign Policy has not moved the needle when it comes to voting. Base, i safe with his believe, and the bolton allegations dont have much effect, but they certainly add to this sense of incompetence in the white house. Coming out,quotes bolton said he cannot think of any measure that trump looked at on the Foreign Policy state that was not about his reelection. Some people say, nothing new there, but it doesnt help the surrounded by competent advisers from the Foreign Policy establishment or other parts of the establishment , were hoping to keep this administration from making bad decisions. One of the things to look for is more defections by republicans in the next couple months. I dont think bolton necessarily counts there, but it is something to watch. Vonnie one of the more incendiary things in the book is that trump would have done a deal with china to help with reelection efforts. It hehat gain traction continues to deny that is not the case . Does that go away, stick to him . Tina if im an investor watching your program, im going to consider this kind of these kinds of observations as noise rather than signals. What is relevant about maye kinds of leaks, it make it more difficult for trump to make overtures to china, but i was not expecting that anyway. Trade deal was already under pressure. If anything, before this book, i was expecting more tensions between the u. S. And china in the runup to november. There may be a few quiet weeks, but late summer, september, october, we will see more saber rattling. I think the chinese expected as well. Expect it as well. Amanda are you confident november will happen seamlessly . One of the alarming things that seems to be coming out of the bolton book is a suggestion that two termsiders that may not be enough. We have had concerns about whether the election process would happen smoothly. What are your thoughts on that . Tina if it doesnt happen smoothly as a professional whenical risk analyst things run smoothly, i dont tend to dwell on. There is precedence for it. I am thinking about bushgore, the florida recount, hanging chad. Called seen what i have electoral malfunctions before. I do think the risk of these electoral malfunctions takes on added significance, considering that i was always concerned about Voter Suppression and the battle that we are starting to , thever postal ballots kinds of developments which are an extension of what a lot of the antiracial and just as protesters have been talking about, making it more difficult to vote. The United States makes it harder for its citizens to vote than any other oecd economy. We have a lot of things in place in different states and there are different regulation. That is something to watch for, as well as the fact that we have antiquated equipment and machinery. The hanging chad could come back to haunt us, but it takes on more significance in this highly charged environment. Some have suggested it may not happen at all if we are in the midst of a second spike. I think that would be difficult to do. But a delay and a dispute over the results, i think, is fairly likely. Vonnie a suggestion has begun potentially, if the president knows that he doesnt have a chance of winning a second term that he may resign rather than lose. Are you factor in that into your calculations at all . Tina not yet. Up even before there was a longstanding suggestion that the president was not thating the white house, he does not like to lose, that he would step down, that sort of thing. We only have a few months to go. If anything, the president has quite a bit to take comfort from. It is true that joe biden has not been able to campaign, but arguably, joe biden is not a great campaigner. That may have helped keep his ratings in decent shape. The economic case for trumps reelections are obviously considerably weakened in the aftermath of the pandemic, expected recession. But with all of that in mind, plus the fact that the u. S. Has the highest death toll in the world in the pandemic, you would expect to see bidens rates higher than they are. I would. Vonnie always lovely to have you on, tina fordham. Coming up, the horse is out of the barn. We will discuss the court battle between the Trump Administration and former National Security advisor john bolton over his memoir. That is next. This is bloomberg. Vonnie this is Bloomberg Markets. Im vonnie quinn in new york. The Trump Administration is in court today to stop the publication of former National Guard advisor john boltons book. The Justice Department argues that it contains classified information. Bolton says they are trying to stifle free speech. We have more. David, the judge saying the horse appears to have already bolted. Does that tell us what we need to know about what has happened so far . Avid it certainly highlights source of skepticism, whether he should grant this temporary restraining order that the government is asking for. That skepticism is simply that the book is already out there, hundreds of thousands of copies have been shipped all over the country, viewers are writing articles, excerpts had been written in newspapers. If the contents are going to harm National Security, people are wondering, wouldnt that have already been done . Amanda what do you think is the hope here on the trump side of the equation . What are they trying to argue for . The argument government lawyers are making is yes, copies have already been shipped, but the government has an interest in preventing further dissemination of the book. One of the lawyers brought up audiobooks, which is a popular vehicle for consuming books these days. Tose are not available anyone yet, will not be until next week. There are all of these other ways that the information in the book can be further disseminated and they want to prevent that from happening even though some damage has already been done. We are getting another headline from the hearing, the judge saying a closeddoor hearing may be needed. , there could be some secrets here. Would there be repercussions for john bolton if the judge decides that this book should not be published, that there are National Security secrets in here . He is potentially vulnerable to criminal prosecution, and there are hints the government may pursue that. In government also sued separate from the injunction, sued him for breach of contract, in an effort to see that he will not see any royalties from the book. Scenario is probably more plausible than the judge stopping the book from being published. Where the book is published, but the government sees some of the money that he makes of it. Presumably, bolton and his publishers would be aware of that risk given the confidentiality clauses. Do we imagine that was something they knew full well going in . David they must have. This is not the first time the government has attempted to seize royalties from authors that the government claims has violated an nda, or has not gone through the proper channels, clearing for a book that may contain classified information. His legal team must have been aware. They are arguing that alton did go through the process bolton did go through the process and he actually did not breach his contract. That is another point of contention in this legal battle. David, great to have you with us, appreciate your time. Coming up next, as the u. S. Celebrates juneteenth, we will take a closer look at how American Companies are responding to the issue of diversity inside the room jobs. That is next. Inside their own jobs. This is bloomberg. Amanda welcome back. Im amanda lang in toronto. Today, of course, is juneteenth, which effectively marks the end of slavery in america. A day that many have commemorated for years but businesses are paying special attention this year. Gerald porter is with us now. New focus by many businesses on inequality and issues of race. Our businesses focusing on it this year . Gerald thank you for having me, and its great that you say it is a new recognition, and it is spreading across the business landscape. Twitter, the ceo making it a permanent holiday. Mastercard giving the day of but also encouraging their workers to learn about history. If you have snapchat, you probably got something commemorating juneteenth. There is no shortage that these companies are taking to acknowledge this very much on some holiday. Vonnie it is pretty phenomenal. Nike may have been one of the first to do it. At the time, i was not sure whether it was a good thing or yes, itthe sense that, is great to honor the day and give your employees the choice of the day off, but shouldnt you be doing more, more active, something about boardroom diversity, hiring practices, mandating that a certain number of your suppliers come from black areas . Who is stepping up to the plate for real . Gerald exactly. Even with some of these companies that are giving the day off, and people are asking what else they can do we have seen Companies Like sephora coming out and pledged to donate 15 of their shelf space to blackowned businesses. Nike pledging to donate to blackowned organizations to support their cause. Other Companies Like pepsico are renewing their unconscious bias training. We see this as a balancing act where companies are finding out in different steps whether to do one thing or the other, but we are also seeing consumers are holding these companies more accountable than ever. Now they have no other option but to walk their talk. The context here is that let people are powerful consumers who spend over 1 trillion as of 2018. Amanda such an important part of this, that bonnie asked vo nnie asked, obviously there is a tension on the inequity not just in america but around the world, but we have seen it before. We can point to other instances where there was outrage and protest, and it died away. And there was incremental progress on the corporate side. What would you look for to see that the progress is real this time . As soon as you say that, you can look at the numbers of commitments and pledges from these companies. After ferguson, around 2010, we see only a few Million Dollars came in. At this point, we are getting close to 1. 5 billion. While we dont know whether companies will approach their social responsibility, especially affairs around black lives matter and racial inequality, to this extent going forward, it is fair to say that the steps that we have seen this month are the tip of the iceberg, and consumers will remain adamant in the social channels, protesting about keeping the pressure on these corporations, that they bring so much profit every year. Vonnie you said something very key, when you said the black consumption was a billion dollars in 2018. If you want businesses to do something, tell them it makes business sense. Phenomenal reporting on this issue, gerald porter. Read all of his stories. From new york and toronto, this is bloomberg. It is 2 00 p. M. In new york, live from bloomberg world headquarters, im caroline hyde. This is Bloomberg Markets the close news,omising china trade while stocks decline after a increases in covid19 cases big increases in covid19 cases. The corporate world embracing juneteenth, we hear from executives, including tony west of uber, about their efforts to fight racial inequality. Sorry, we are closed. Apple doubles back after reopening in majority of their retail locations, the company temporarily shuts down a number of stores while covid cases despite. All that and so much more. Romaine it is good you mentioned apple, we had a distant rally in the market to start the day. Then concerns came up about the increase of covid19 cases in iz
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