About air bridges out of heathrow nejra to me, the air bridge will be to france if i could get that holiday in the summer. It is about allowing travel to European Countries without having to quarantine for 14 days. We have been expecting this week to get that announcement from the government, including some countries like france and italy, but some would still be exempt from that. The other thing we are looking forward to is the july 4 reopening of the pubs. Some are calling it super saturday. Reallyat will be interesting after what we have seen in america, the virus story as we go into the long weekend here is really quite something. We will give you some coverage on that today as well. Right now with our news in new york city, here is ritika gupta. Time, u. S. The first daily coronavirus cases rose above 50,000. There are increases in big states including texas, florida, and california. Say the virus is increasingly becoming a disease of the young. In florida, the median age of infections is 37, down from 65 in march. The monthly jobs report is likely to be a mess. The june data and weekly employment claims are expected to show further improvement in the labor market. The actual trend may not be immediately clear because of the problems dealing with misclassification about a work misclassification of out of work americans. The house has taken aim at the new National Security law china imposed on hong kong. Lawmakers unanimously passed a bill raising sanctions on banks that do business with chinese officials involved in the crackdown. It is similar to a measure passed by the senate last week. If the Senate Approves the house bill, President Trump is expected to sign it into law. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in im than 120 countries, ritika gupta. This is bloomberg. Nejra . Tom . Tom thanks so much. Equities, bonds, currencies, commodities, equities with a continued lift. I want to go with the vix and sit on one statistic today. It is how this week in america, a shortened week, the vix has come in in efforts to retest the good news seen 10 days ago. Would be remarkable coming in from a 32 level, which just seems hours ago. The better equity market. Other than that, quiet and bonds. Gold settled at the 1780 level. Riskonhere is a clear tone in european equities, led by cyclicals and the dax in germany outperforming. Quite a bit of green on the screen. Futures higher after we hit a record on the benchmark yesterday. 10 year yield fairly steady, and the dollar we are seeing g10, the lowest in more than a week. Running us is davide serra. Great to have you with us. What seems to be driving some of the risk on tone in equity markets today if the optimism und potential vaccines the bio and tech. In terms of credit, how would you look to position for a potential recovery in the second half, or optimism boosted on the health front . Credit, whatnk on we really like is all financial credits. All financial credit. The reason is, if you think about it, all across europe after the vi virus is being contained, governments are stepping in with fiscal and monetary that they use and the Banking Sector as a tool to support the real economy. So the credit we particularly like. So the preferred space across the strongest european and u. S. Banks, from preferred to additional tier one, tier two, even senior nonpreferred. The real economy, there are some special sectors across europe where strong governments will a company toy weak survive. Say theree what you about the preferred option within bank debt. With your expertise on banking, i really need an update on the state of the european banks. When will we see consolidation, if ever, and also, i want to explore here just what the amendments are doing. What the managements are doing. Are they actively looking forward to 2021 . Avide well, i think that is very good question. Lets take the jp morgan precovid 12 , 13 on equity. Yielding 10 , was bnp paribas was yielding 10 . What i think will happen is you will see the strong getting stronger. , in the ssm,e ecb made it clear that they want further consolidation and they will allow financial ins to sheehan to use the difference between book value and how much equity you have an your market cap. Today, the european banking assessed 70 the ss can buy that at 60. That gap is huge. Then they later say you can use it in order to clean up your books on nonperforming loans and to pay for charges. 500 billion,sive 600 billion firepower that the consolidator will be able to use in the industry. I dont mean to interrupt, this is absolutely brilliant, but where is the catalyst to really jumpstart a new european Banking System . Way i think the only first of all, there is no magic, there is no Silver Bullet and we willank see this in the space, too can operate at zero or negative rates for a long time, so you will have inevitably impact on margins. What i do expect is you will see further cost gouging through cost validation. There will be repricing of some italyss economic and spain will see further consolidation in the next 12 months, and probably eventually that will happen in germany. I dont believe there will be they will be big crossborder consolidation. From a legal point of view and tax point of view, each country sets their own rules. Davide, you believe credit offers a better risk return than equities right now. One of the reasons of course is the high multiples to equity markets that we talked about at the top of the show. The nasdaq at a record, for example. But other than financials, where riske best risk return in return right now in the context of covid19 . Best so we think the excluding financials, which is about 20 to 25 of global credit markets where we do find value is in strong countries to lets say the one with the large fiscal space switzerland, germany, france, the netherlands where they can sustain some of the producer for example in auto components, in airplane makers, anything that is strategic, whereby these companies have been hit badly because of no sales for about a quarter. Credit collapses, and we think government will step in. These tend to be Midcap Companies which are not in major indices, so that is where we have been focusing. Staying away from anything that particularly heightened in etf. If you think about it, the Market Structure whereby Central Banks are now using etf to deploy Monetary Policy has created a loop side risk reward. Basically you are not paying enough to keep the risk running. If the company goes in default, you still hold zero, the bagel. Basically we want to stay out of any market manipulation. Is absolutely fascinating, particularly the commentary on banking. We will continue with davide serra. Have much more coming up. Of course, jobs day in america, really a compression of data today, also the mystery of this massive question of miscalculation. That will be one of the topics as Jonathan Ferro speaks with Lawrence Kudlow, i believe in the 9 00 hour in new york. Stay with us. This is bloomberg. Tom good morning, everyone. Bloomberg surveillance. It is jobs day thursday in america. We have a wonderful conversation, nejra cehic and i. With davide serra. We have been talking about european banking. Ofcaught up with Jes Staley Barclays earlier this week. He talked about being a global banker as well. Give us your take, your update on british banking and particularly the future of barclays. Barclays is think wellpositioned. The reason why i think it is wellpositioned is because first of all, it is in the top four or five in the u. S. It allows them to have a great profit pool in anything that is Investment Banking. So compared to any other barclays isyers, clearly top three, top four. That allows them to have a strong profit pool, and then basically be the european choice if you want an investment bank. The distribution of revenues from retail to Wealth Management to credit card has allowed them, in my view to weather the storm very well. We have seen it particularly in the First Quarter numbers, and i do expect them to keep on delivering the numbers, thanks to the data. U. K. , they will suffer. While the large player like benefiting. Keep on nejra that is interesting. You pointed to barclays as your Investment Banking choice in europe, and it is very differently positioned to other u. K. Banks. If we look at europe more broadly, how much do expect european credits to benefit from any kind of cyclical upturn in the second half of the year . Would you be choosing, for advancingurope over markets . Yes yes. Dadavide we were per europe credit to emergingmarket credit because we think governments be there to emerging markets. Secondly, if we look at today europe in the u. S. , we are thinking europe, particularly there is much more space for germany,ross switzerland, italy, and spain, even in the u. K. In the u. S. , if i take for ,xample the main credit indices ig, vd, which is one of the fed tools, which is now up on the year, i think it makes no sense to change, simply because we all know that the world and the right spot, to have a credit at alltime high and prices up on the year, it makes no sense. We find much better value across europe. Thea we always appreciate position you bring on the show. Chair ray Bridgewater Dalio joins us for a virtual conversation on the recovery and challenges post covid19. This is bloomberg. Good morning, everyone. Bloomberg surveillance. Tom keene in new york, nejra cehic in for francine. For those of you globally, there has been a debate in america about russian bounties paid to the taliban of afghanistan, singularly in cash, to pay to kill american marines. That has created a modest uproar certainly, and a movable feast over the last three and four days. We caught up yesterday with a gentleman with a book out, my conversation with john bolton. John what i said to the Associated Press when that question was asked was, no comment. That is the same thing i am going to say today. We are embroiled in litigation now over whether i complied with the requirements of the prepublication review process, which i think i did. I didnt write this book with any intention of putting classified information in it, and i dont think donald trump wants to suppress the book because he is worried about foreign governments reading it. He doesnt want the American People to read it. With respect to russia and what they are up to, and afghanistan and the range of places around the world, honestly this current controversy, i could have written about in the book if i didnt face these other difficulties. , the second obama National Security advisor, writes today in the New York Times that if she had beingation like that reported in the papers, whether it was totally verified or not, she would have gone into the oval office to tell president obama. Thou getting into what i do or did not my want to say i agree with susan rice on that. I think thats what the National Security do. Let me make one more point quickly. There are not two categories of intelligence, verified over here and not verified over there. Intelligence invariably is placed along a spectrum. The Intelligence Community understands this, they say they have high confidence in sum, medium confidence, low confidence. People will have to judge and different agencies will disagree, there is not some block of granite that you carry around to show the president that is called verified intelligence. There is a range and you deal with uncertain the. That is part of the job. Look at the susan rice essay and also the essay by leon panetta. I found them extraordinary in their heat. How would you recommend President Trump extricate himself from this now, and particularly how he addresses the military at the pentagon. How i cant offer advice to get out of a mess he has effectively created. In the last five days he has told three different stories whether he was briefed, whether he was told it was fake, whether it is fake news by the New York Times, a whole range of things, and his advisers are now contradicting themselves as well. How do i view that in terms of the trump residency . It is just another day at the office of the Trump Presidency . It is just another day at the office. Every day is a new story, what you say today is interesting but it does not dictate anything. What it says to the russians is we are in disarray, rife for the provocation not just in afghanistan but in many other places around the world. Jon on this particular intelligence, is there any reason why intelligence like this would be put into the president s briefing and why it would not be followed up with the president himself . John i dont want to comment on the specific story. I will say this donald trump doesnt consume intelligence the way you expect president s to do so. Everybody is entitled to gather information in their own personal style Ronald Reagan had his style, george h. W. Bush had his. One not saying there is any that is right or wrong. I think the presentation of intelligence to the president has to take that style into account. What i am talking about here is not does the president read lengthy briefing papers, does he get into movies, that type of thing. The question with donald trump is whether he gets it at all. I think he is uninterested in learning. I think that facts that are inconvenient for him often dont stick, despite peden tellings. So can he say that he was never briefed on it or that he thinks it is fake and can get away with it . We will see. Maybe he will. Tom john bolton, in conversation with us yesterday, particularly timely. I should point out that his book, i believe i saw yesterday, has sold over 700,000 copies, which is a real shock, particularly to his detractors, of which there are many. We have much more coming up here. We need to do a data check to bring you up to speed on how we look on jobs day thursday. I want to point out the vix, the volatility index of the s p 500, with futures up 23, dow futures 2. 50. Nejra cehic in london, i am tom in new york. This is bloomberg. This this is ritika is bloomberg surveillance. I am ritika gupta. President trump says masks are good, but he questions whether americans should be made to wear them as coronavirus cases spike across the u. S. He said he would wear a mask if he was quote, and a tight situation with people. In a tight situation with people. Raised 141 million in june and they brought in twice that amount for the full second quarter. And thes the president republicans in the same period. Joined these has senate in rejecting President Trumps defense of military bases named after confederate generals. The Armed Services committee voted last night to rename the installations as part of the overall Pentagon Spending bill. Would allow him to stay in office to 2036. Voters casting ballots voted in favor of the term limit exemption. His Approval Ratings have been sagging because of the economies of the kremlin pulled out all the stops. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. I am ritika gupta. This is. This is bloomberg. Tom and nejra. Nejra new york and the california and california are the latest states to backtrack on reopening plans as the u. S. Top 50,000 new cases for the first time yesterday. Is our senior pharmaceutical analyst. Anthony found she did an interview with the bbc today, where he says the world needs more than one vaccine to tackle the pandemic. Bearing that in mind, how excited should we be about this trial . Sam obviously it is a positive result, but we have seen so far in terms of publication, but we are in very early trial data. Ultimately you need to find a accine to not just show response but show proof of protection. It is certainly a step in the right direction. I think what anthony thought you might be referring to is we dont know yet which of these vaccine candidates are going to be more effective in elderly people versus young people, versus infants. There are lots of issues that have to be worked out but over time, will be worked out. Nejra we have a flood of vaccine data coming this month. I know youre going to be going through it. What should we look out for in terms of trials . Expecting expecting the dharna moderna. Mo dharna everyone is wondering where that is. You might see more details coming out of some of the chinese Biotech Companies who have been doing the work. Possibly something out of Imperial College which has similar technology. The key thing is safety. That is the question that will come up with the pfizer data. Tom i want to ask you a general question. People get sick with the virus, what kind of sick do they get . There is such a perception in the United States that it kills old people and is not good for old people, but there is a mystery about the young. What does this virus do to those that are young . Scientists are finding this out as we go along. That itonception is doesnt really cause a major ioblem for young people, but have stories of 20yearold patients who have had to have lung transplants. It may not kill you but it is certainly not a walk in the park. You are not the same person as you were, going in. Mentioned onhic july 4, the bars open in the united kingdom. What will be the outcome . Any different than the bars opening in austin, texas . Sam i am certainly not going to run into a bar or pub as soon as it opens, even before they were brilliant venues for passing infection. I am with you on that. I am also going to be quite cautious this weekend. And i, quite cautious. Great to have you with us. Joins us on the show. This is bloomberg. S is bloomberg. Nejra this is ritika this is bloomberg surveillance. I am ritika gupta. The ceo of mercedesbenz warns of tough times ahead. They expect there to be drastic pay cuts with executives taking much bigger hits. He says that is necessary to investments in future technologies. Could up and multibilliondollar leaseback industry. The are working to rework Lease Agreement with 100 billion of bonds. Mcdonalds is halting the resumption of Dining Services and its restaurants in the u. S. Days,use will last for 21 due to coronavirus flareups across the country. That is the Bloomberg Business flash. Tom, nejra. Tom very good. It is a jobs day as we set up. A really really interesting to see how kudlow speaks on jobs and hong kong. The data check today is real a higher tone as well with futures up and the vix coming in nicely under 28. Inra, why dont you bring Wolfango Piccoli right now . Nejra i will. We have seen risk on across a lot of top markets, in any in hong kong as well, for the First Time Since we saw that law approved. Lets talk to Wolfango Piccoli of teneo intelligence about the latest developments and what we have learned. Wolfango, welcome to the show. We have 35 pages of legislation, a lot of legal experts saying it is so broadly worded, it is easy to abuse and difficult to apply. How much of a Chilling Effect will that have on business . Wolfango good morning. It will have a Chilling Effect. How much pens on enforcement how much depends on enforcement. Mark will be how it is implemented. Aside the specific provisions, it is also the creation of governing bodies which could have longterm impacts. The creation of this body puts the mainland government completely in charge of National Security issues in hong kong. The results of the longterm issues are to consider. Tom the real issue i think, there have been so many distractions in america that i really havent put the time into this that i should. Wolfango, brief us on what business will actually do. Is the answer, we dont know . Wolfango i think business will wait and see. It will be in a difficult situation. For the time being, they will be looking at enforcement. 300 people arrested yesterday. There is significant risk in terms of targeting foreigners, the handling of state secrets and data security. There are multiple issues here but for the time being, it is going to be wait and see and look at the enforcement of the new measures. Tom because of time yesterday in russia, we did not get to this with john bolton. Let me ask you instead. I want you to triangulate beijing, hong kong and taiwan. How do these actions in hong kong and the responses from america affect the asiantaiwanese debate . Wolfango one of the main issues will be how the u. S. Is going to react to significant changes in hong kong, basically if the u. S. Decides to put substantial pressure on mainland china, taiwan could become under this month. If the u. S. Does restricting of china access, the risk of china looking at taiwan in a more aggressive posture could increase. In taiwan, they will be looking. T this carefully mentioned go, i was gaining today as it traded for the First Time Since the law was imposed. That positive reaction, some people interpreted it as saying it reflected investor expectation that the legislation will deter protesters, which could help bring stability to the streets and in turn, encourage consumption. Others said this is the hand of the state moving into support stock markets. Is there a view that there is more certainty that the law has been imposed for businesses . Wolfango i dont think there is more certainty because as we discussed, and as you may have mentioned at the beginning, lots of these measures are written in a very vague word. We might have less protests because people are eventually so all in all i would not read too much into what happened in the stock market today. More of ais is longterm kind of issue. The reality of the ground is becoming bigger by the day. Nejra it makes sense. You were talking earlier about how the u. S. Might respond to this. How do you see the situation looking a year from now . It is a tough one. Think it depends on what happens on election day. Regardless, it is clear that the u. S. China relationship is a relationship on a downward path. The issue will be more about the risk rather than the actual content. The issue is in my view, the coronavirus challenge is very strong in the u. S. And could force washington and beijing to actually work together. It is pointless to have a vaccine if you are not able to have two countries like the u. S. And china work together. That depends on what happens in november. Tom Wolfango Piccoli with us, he is with teneo. There is a lot to look at, not only in hong kong but on the atlantic as well. We will bring back mr. Piccoli in a moment. It is jobs day in america. An extraordinary thursday with a huge mystery out there of what to expect. There is also a mystery to american politics, after Lawrence Kudlow and the 9 00 hour, the conversation with the gentleman from iowa in the 11 00 hour. That will be most interesting. Stay with us. This is bloomberg. Tom good morning. Bloomberg surveillance from london and new york. Many stories to cover here, speaking with Wolfango Piccoli of teneo. Many other stories end of course, jobs day in america with a huge mystery about around it. Many different numbers in that report. One of the stories that has fallen off my radar, we are going to do it right now with wolfango, the idea that vladimir putin, where he will be in 16 years. He will be 83 my math is right. Wolfango, it is an extraordinary moment for russia. There was a debate about how they would handle this vote. He won a resounding victory didnt he . Wolfango absolutely. A resounding victory after managing to change the constitution and get a turnout of 65 , which is phenomenal and just slightly lower than president ial elections. Very good results for putin. It provides a lot of vision legitimacy for his potential reelection in 2024. Tom this is a really important question, and i think for our american listeners waking up, it is harder to chase. Do you perceive mr. Putin with this mandate, to be a dictator and are there elements of it that harken back to the soviet union or is that off the mark thinking . Wolfango i wouldnt go as far as the soviet union. It is hard toat label russia as a working democracy. We are not back to the soviet union and even putin knows two things. Despite the result yesterday, his popularity is that a multiyear low. Is the economy is not doing that well and is actually worsening, and the coronavirus challenge is still out there. After the vote, the focus of putin will go back to the economy and the coronavirus challenge. If he does extend his riskso 2036, what are the for investors in russia . Wolfango russia is fairly unpredictable. The rule of law is certainly questionable. It could become more authoritarian with the passing of time. The risk here is like before is reforms. We have not seen reforms in russia in a long time. The population is aging quickly. They are not just coming from the political zone because of putin at the end of the day. Nejra wolfango, i spoke to a russian analyst earlier this week who said that they forecast a 64 likelihood that joe biden is going to win in the 2020 president ial election, and that means a more aggressive posture toward russia from the democratic administration. Do you share that view . Wolfango i might share the second part of it. I am not so sure i share the second the first part of it. Given what is going on in terms of coronavirus, the economy is a bit difficult. I agree certainly that the relationship between moscow and washington would become more bidencated if we have a in the white house. The easy path that putin got so far from the Trump Administration would go away. Biden would have to make a lot of difficult choices and i dont think russia would have to be would have to i dont think russia would be at the top of the agenda here, china would be. Tom wolfango, one final question. Be a normalto summer in europe . With all of these travel issues and this pandemic, does europe have any chance of approximating a normal summer . Wolfango it is not going to be normal. Best case scenario, we will see 30 of the usual tourism season. It is not going to be normal when you get to the location. Side, im trying to get degrees get to greece. It is going to be a very strange summer, even in countries like greece that managed the coronavirus very well. Because of the risk, and you see it in the u. S. , after it if you reopen, you will pay the price for that. Tom we will leave it there. Wolfango piccoli, wonderful, conversation. He is with teneo. Much more to come on jobs day. With kudlowro later. The central bank theory. E are thrilled stay with us. From london in new york, this is bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Tom this morning, this jobs day, thursday. No one has a clue what 8 30 will bring. They adapt and adjust to the pandemic. One thing is for certain, look for higher unemployment. No one is more clued in on the surge in cases of the virus. Arizona is worse than new york ever was. Mexico surges. France does better. We hold these truths to be selfevident that summer is here, trump and biden, they begin the dash to the first tuesday of november. Good morning everyone. I am tom keene in new york, nejra cehic in london for francine lacqua. There is an uproar in london about how you are going to travel and if you are going to quarantine. Nejra, we must