Information come out of florida. The number of cases continues to climb, nearly a million 11 million cases. We think brazil. , give us your sense of where we are, particularly in the United States. We had the florida case is that seemed to be stabilizing. Is it too early to say the reentry to lock down from key portions of florida, how people are mixing bars and restaurants is having an effect . John i think its way too early to say that. These measures take quite a while. Caseser when we first saw taking off in china. They locked down 12 Million People. Months for those measures to have an impact. Those measures were much more comprehensive than anything we are seeing in the u. S. Right now. Level, itsday going to take quite some time to taken,ther measures have when impact its going to have. U. S. Still have a lot of freedom to travel from state to state. They are asking people in texas, the government has mandated mask wearing. Are people going to wear masks . See whetherrious to that happens. What kind of impact thats going to have. There are a lot of measures being taken, no conference of plan is in place. I think it really complicates the United States. Impacticult to tell what its having. Guy what we have seen is a clear link between Indoor Dining and the case counts. This weekend, the u. K. Is going to open its ours and restaurants. Bars and restaurants. What we have seen in the United States, will it replicate in the u. K. . John thats a really good question. Play, we have at to wait and see how it works out. One of the first things we have to think about is when the u. S. , open, it. Opens didnt appear as though people were using social distancing within the structures. About ourgs to think people wearing masks. Is what iskey issues the baseline level of infection . 4 about thes on bbc level of lockdown in many European Countries versus the level of lockdown in the u. S. , say what youries like about how the u. K. Has controlled this virus, the level of lockdown is extreme. It was 97 . People were not moving. That never happened in the u. S. They never got control of it before they started reopening again. The virus is still going to be out there. The virus is out there and it doesnt have a mind. Spread. Is how much of it is going to be out there . Its been knocked back so far. How are people going to react when they get back in the pubs and restaurants . Are they going to act appropriately . Are they going to keep apart from one another . Fauci has raised the threat of the last 24 hours of the virus mutating. We are starting to see that vitroing, its an in examination of the virus. Walk me through the risks associated with the virus mutating. It spreads more quickly . The real concern is whether or not the vaccine efforts we are making could be nullified by the virus moving too quickly and the vaccine wont be effective. Concern, i think thats a concern. The vaccines are designed to portions of this protein that may map the virus mutation. Remember, this mutation we are talking about, it turns out its a quickly replicating variant. This is already the dominant strain. Dominantkly become the strain of the virus spread in the world. If the vaccines that are tested now, if they were, they will work against this strain. Mutate out of to the range of the vaccine. There are 130 vaccines in development with different constructs on board. The mutations are always a concern. We will have to wait this one out a little bit. Guy you very much indeed for your time today. That is the latest we know about the virus. We will have more about how to navigate the risk. That conversation is next. This is bloomberg. Guy from london it, im johnson. This is the european close on bloomberg markets. The United States is closed ahead of the fourth of july holiday tomorrow. There waiting news on how reopening goes. We will monitor the resurgence of coronavirus cases in the United States and joining us is the chief investment officer. Its very nice to speak with you. What you see in front right now . What it recovery are you anticipating . Zero disability and im struck by how people have higher rate on the virus and the economic evolution of what is about to happen. The key point is a lot of the support mechanism that was put in place during march is about to run out in july and september. The real impact will be monitored ball in terms of Market Reaction three months from now. We have this in a discount rate. Infiniteow, you get valuations. You can argue the stock market should be 4000 and argue it should be 2000. Guy given that wall we are facing, what do you think the policy response is going to look like . The probably response is driving relations right now. Scal fromsee more fi the United States and europe, more monetary reactions to what we are going to see. Walk me through how you think the mix is going to work and what thats going to mean with asset prices. Steen i think the actual Economic News will be far worse. That will be met by policy response which will be more of the same. An extension of the social aspect care the tapping in terms jobs, weg people in will be liquid insolvent. Japan, they kept underneath the economy, thats whats going on. In that process and what has government ising, being monetized by Central Banks openly. Is the most open central banker weve ever had. He is an clear violation of the Federal Reserve act. Hes doing it does the narrative is to maintain jobs. We know for a fact that you need to create jobs, not maintain jobs. The motive will be to maintain jobs instead of creating jobs. Capitalism, we must price discovery. We dont have any ability to price bonds. We cant price foreignexchange. The government is on all of these mechanisms. They need to look after the money. Im deeply concerned. At the same time, its the end game and we will get to a better place. This is not the biggest crisis in the world. It remains the environment. What you talk about the lack of visibility at the moment. How should one position for the second half of the year . Steen its the entropy of the sent system. Its a closed system. You can reduce the volatility in the equity market. You increase the amount of volatility in other parts. Clearly, you are creating instability, you are increasing the inequality of society. This comes with a price. Even a political system is a closed system in itself. Government has zero value for you. Its not going to pay you any money because of that. Get rid of all the bonds. You replace it by being long volatility. To me, i am advising them to be long volatility against the monetization and may be long stocks that have very low debt on the Balance Sheet. Health care, information technology, a combination of that. I want to come back and talk about that later on. Lets deal with what is happening in terms of the financial economy the moment. You talk about the bond market and the lack of pricing signals that are coming from the bond market. With what determine signals don me, what i need to take . You talked about the huge amount of liquidity out there. There is the possibility of monetization. How do i understand when inflation is a risk and how do i position for it . Steen in a number of ways. The first is when you start to see the Global Supply chain coming through in the reporting we see. Its important to understand the demographic is changing back to a workforce. They will come into the workplace more than the baby boomers like me will be retiring. That is inflationary. I think its pretty clear when you have a constraint on globalization, moving to initiatives and keep at bay the ability to deal with health care. Instruments, its by commodity rices starting to rise. Finite well of resources. Between gold and the overall commodities space. You are right. Been dismantled by the fact that you look at the volatility. This will get resolved. If there is a vaccine this has significant will that be in terms of portfolios . Would you change anything in that portfolio if we saw a vaccine . Steen not really. All of these trends we are talking about longterm trends embedded into the shutdown of the economy. It a be a huge advantage for the health care sector. There are two big crises that already existed trade the Business Model is based on globalization. Going back to what we talked about, the transformation of the economy, its impossible not to react to what happens to the environment now. This has become too large for corporations to be under. Been a zombie vacation of the economy. You highlighted this a minute ago. There was already a productivity crisis before hand. How does that get resolved . How do we get back to Creative Destruction that will allow the economy globally . Structuresreating that support inclusiveness and change management and education and research. Jobs instead of maintaining jobs. Every single item thats been on the list of emergency measures that have been done the world has been based on maintaining and operating the old world. There is no strategy on how we move to the next area. Out and decided that when they talked through the conversation, they wanted to be an a position of talking about creating jobs, not maintaining their own jobs. There might be a productivity game of 10 . I dont think its really complicated. It depends on debt as result. He is the worst person ever for the financial market. He created this concept of lowering expectations. Greatn model through in productivity. Its based on education, research, having investments. Guy thats an interesting thing for policymakers to think about. This is bloomberg. Guy this is bloomberg markets, time for a Bloomberg Business flash. Lets kick off with softbank. Shares arising to a new high in 2020. Its been propelled by a series of buybacks. This is something of a vindication that management will. Ell assets years, they are finally hitting the road in tokyo. They are partnering with three local cap operations to make 600 cars available. They will run the Central Business district. Giant isse beverage weighing an initial Public Offering the could raise more than 1 billion. This would, as soon as next year. They have grown into a food and arerage giant, roddicks available in more than 30 countries. Bloomberg business flash grade a quick look at where equity markets are in europe. We have light volume today as result of the United States being out. We are negative on the day. We will not take much signal from this. Some the mining stocks are trending low today. The cac and the dax are in negative territory over the last week did week. We will have more details on the close in a few minutes time. This is bloomberg. 49. 50 i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. Stocks are about to wrap up in europe. We are getting some headlines. The arizona virus case number acreased to 5. 1 , its sevenday average. The market is paying attention to this. Lets look at the details of the close in europe. Just closing up now in europe. The stoxx 600 saw some of these losses accelerate into the close. Volume sterlite. Theyre off by 50 of what it usually is this time of day. ,e see stocks down in the closing it 0. 9 . , ecb has abe a day rift emerging on how programs of the allocated. Much of this is about that ecb with news in france as mccrone shuffles up the cabinet. The ftse 100, one of the weaker regions, down 1. 5 . One of the big losers in all european stocks today was rollsroyce, down 10 . May need more fundraising. It shows how weaker Balance Sheet is and liquidity situation , the dax is lower today. Here in the sector red except for travel and leisure. They are introducing air bridges, you can travel to the u. K. Without having to quarantine for 14 days. Thats going to be a big boon for some of these situations. Basic resources, oil is lower today. When you look at this, its a value and momentum play. Technology is not falling as much as the rest. Its huge play in the u. S. With the nasdaq closing at a record high. When we look at a weekly review, everything is read today. On the week, most of these are higher. The europe stoxx 600 is higher by 1 . Global equities are headed for their best week in a month. The dax is up 3. 5 . The only region not up is the u. K. , disciplined for people who are gearing up for Super Saturday and the reopening of pubs. Dont count on the consumer yet. The u. K. Is an eight precarious situation. The ftse 100 was up before today. That rollsroyce which are probably deteriorated those gains. That picture is not helping out. Ending on a weaker note, its a low volume day. The bigger assume out, its not totally a s a mystic view. The dax. Icularly for germany continues to outperform. Thank you very much. Lets get back to the conversation on broken markets. The recent Central Bank Action means the Capital Markets are no longer free. Steen there are priorities about that, when they buy and sell. They are not the same as the classic free market allocations. The Capital Markets are not free markets. There is a lot to explore in this conversation. He was talking about this same stock. Has been a move away from open Capital Markets for quite some time. A lot of money has been flowing into private markets, which does of lot more less liquid. Does this continue to make that happen . S money continue to fly flow toward private markets . What does that mean for capitalism and our ability to understand what happening in the economy . No capitalistic markets. Its defined by the fact that the market is the primary driver , into the actual market. The stocks that you like the most, they operate on a monopoly model. They have market concentration in the u. S. Its the highest ever. There are number of industries where there are one or two Major Players that dominate the price. Response, they look at the risk premium on the curve. They have to force themselves further and further up on the liquidity. Your total return is a function of the liquidity that you give yourself. Zero bound Interest Rates with the cap in place and , thatmber crunchers dictate you move further out. There is also a dynamic in the system. This is a closed circuit system. Is in part of the economy the asset market, it becomes too expensive. Inequality, which is crowding out investment, which is putting the burden on companies to report shortterm versus longterm. We are not investing into the product cycle, but in our universities, colleges, are apprenticeships that were the main drivers of the World Economy through the 50s, 60s, 70s, the last time we have any productivity in this model. Guy Central Banks are increasing inequality . Steen absolutely. They are openly saying that. Glasss the champagne falling over. They think there is a growth effect. There is a wealth effect for the 2 of the world that own stocks. For the 98, thats will happen when we exit the support programs. Indicatesic data things are improving. The you feel that are now than you did in march . Of course you do. You just extended the recent past into your answer. Of 10e not unemployment million. Means five people in the us, thats 50 Million People in the u. S. Political cost. It will great a demand on the system and it will create what goes into the castle you are building. It will collapse. I dont know when. I dont think you should be short the market. The only way to hedge is being long on volatility and cash flow. This is what im wondering. November is rapidly approaching. It looks like the Biden Campaign is going to tag left. There is talk of Elizabeth Warren becoming treasury secretary. Thats open to debate. Nevertheless, if you were to see a blue sweep in november, how worried should wall street week on the given the backdrop you are describing . The Financial Markets have been the tool by which inequality has happened. Politicians will look at the how covert world and wonder they deal with this and how they answer the questions of their constituents. How significant of a change is possible in november . Unfortunately, biden represents the old traditional way of thinking in washington. I dont think he will be a kickstarter. He will be the first of a redefinition of what the Democratic Party wants to be. They want to cater to the welfare model of the social democratic europe. They want to be the alternative to the model that increases inequality. I think the weight black lives matter has become an issue now is a direct consequence to that. It is a significant issue. Fabric,th that social the political establishment will move to younger people who have very radical ideas, not all of them well thought out. We will be through experimenting. It has to be less about manufacturing and more about creating a world where we can operate with nature. This sounds like a world in which europe is ahead of the , they on the nature front are pushing hard when it comes to the environmental financials. You mentioned the economic model is more attuned to this. Are we about to enter a time when after decades of under performance versus the United States, europe can shine here and outperform . Steen that is our new big conclusion. Theou look at transformation, the green transformation, europe is light years ahead of the u. S. Society pharmaceuticals are more embedded. Air,ties, water, clean they are embedded into the european model. Valuation, price europe has underperformed since forever. It is seven standard deviations behind over the last 20 years. Expensive ins terms of earnings than the u. S. Sees and its a fragmented place. Fragmentation, a bottomup industry that is robotics,pared for the green transformation overall. Its a more coherent social policy and we have to stress that in the overall institution. When do i make that Investment Decision . Is it now . The u. S. Is leading because of its technology sector. When do i make the switch . Technology sector is growing in terms of importance. Growing at as very rapid rate. Valuek the relative dictates that. You have home buys any way that you can play. What concerns me is the structure of the budget thats in place. The European Commission is i think that will be very detrimental. Fundamentally, we need to do that changed out. You need exposure to all of the growing. The most i will companies in the world will be companies who are part of solution on the environment. It will not be technology companies. We Like Technology because its on the Balance Sheet with a discount rate of zero. If you go by zero, you get infinity. Thats what we see in the u. S. Market valuation, i have a friend who call the s p 500 the s p 5. Its driven by those very limited stocks that drives the technology. We just need to open the lens when it comes to our definition of what technology is. Its always great to chat. Come back and see us soon. Its been an informative conversation. Thank you very much indeed. Quick look at where europe is ramped up. On the week, it was a very positive week, particularly for the dax. Today, negative. Those are the final numbers. This is bloomberg. Guy this is the european close on bloomberg markets. Were going to celebrate the boston pops. You will see that with us. By covid19een hit pretty hard. We spoke in advance of the boston pops to the ceo of the boston Childrens Hospital. We have seen a number of children come through with the virus, but also with this new syndrome. Its an inflammatory syndrome in children. Weve seen about 150 children with positive covid. Most of them have had a relatively mild form of the disease. More need for intensive care. Theyve mostly been chilled with underlying disease. The more Sick Children are the ones with this new syndrome. Weve seen just over 30 of them in the last couple of weeks. That has been our experience. Weve been preparing for the same kind of situation that the adult hospitals had to was well. That counters the point that children are immune to this virus. How concerned should we be about our children . Children have been testing positive, many have tested positive and are not symptomatic. Arequestion is whether they transmitters of the disease, even though they dont show symptoms. That is something we are still attempting to understand. Why this virus has not had the same degree of impact on children. That is still a bit of a mystery. A lot of research is going to understand that. As a parent, wondering schools are going to reopen and should i send my children given the there are Health Concerns and uncertainties around what our children transfer the virus losing several months of their education. You think schools should reopen . Should parents send them western mark absolutely. I think they need to social interaction. They need routines. They are hungry for being in those settings. And for thelearning play that occurs. The interaction. The potential sports, just the connections they are making. They missed their teachers. We just opened this week. Thingse trying to do remotely. It has been very difficult. How do you do play time with a bunch of three euros . How do you real learning in Elementary Schools . We believe its very important to find a way to safely bring children back. We will have to figure out ways to think about personal protective equipment, masks. Kids withng the interaction. We believe thats going to be good for family life, for parents to go back to work when they need to as well as the children. Given the resurgence of cases across the country, how concerned are you about that . Lot from thised a first round. More than we ever really wanted to. We know now how to test. We know how to treat. We had to set up so we different ways of bringing our patients in safely, how to keep our staff safe. There are many things that will be in place now forever. If we get through this round. The real concern is the flu season. We are going to double down and really encourage. This is something i want to say over and over again. We need to have everyone get their flu shot this fall. Flu isering of covid and going to be really problematic. That is the ceo of boston Childrens Hospital ahead of the boston pops as we can. You can join bloomberg for the broadcast of the fireworks. Its starting at 8 00 p. M. On bloomberg television, radio, bloomberg. Com. This is bloomberg. Guy this is the european close on labor markets. For supers gearing up saturday with the government hoping for a big boost on the economic recovery. People will be able to get their hair cut, they will be able to go to the pub. What is the Economic Significance . Think its the beginning of getting back to normal. They can open now. However, its disappointing to know how much we are going to see. About 42 were going to open. Thats not the entire industry. They are not letting as many people in as they would have. Back inple want to go the same way . Its important to have the progress and its questionable how much of a massive boost we will get. Guy what have we relearned from the opening of shops . Now it seems to have gotten quieter. Think there was a certain excitement. We wont see that this weekend. There has been a lot of business lost. You are going to have to go back and buy the things this spring. Of people question feeling like its a risk with going out. You might want to go to the pub. As . You going to go as much not necessarily. Its a progress. I dont think we can see too much of a huge uptick because of it. Guy thank you very much indeed. Enjoy the weekend. The british Prime Minister will be speaking in the next few minutes. You saw the life shot. Thats where he will be standing. What advice will he give . The british Prime Minister is speaking in the next few minutes. Thank you for joining us today. This has been numbered markets. Happy Independence Day to those in the United States. This is bloomberg. 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