Chancellors statement . Were they in strong agreement with him . Anna he has a lot of support within the story within the tory party. Good morning to you, tom. Rishi sunak thrown into this incredible task of managing the u. K. Economy through all this. He remains very popular within the party. Interesting to see from the other side of the political spectrum, the criticism that he is not done enough. Maybe he is saving something for the autumn, but it will be crucial to watch what happens with unemployment. That we have an end mechanism for the furlough scheme that has done so much to support employment for this country. How much happen and will employment spike . Thiswere people riveted to , the statement at the beginning that the pandemic is terrible. Were people riveted to his speech yesterday . Anna im not sure that riveted is a way to describe it. Earlier, that dominated the day to day conversation, the conservative party stepping in in a way that you might expect a Labour Government to do, to bailout peoples jobs and pay peoples paychecks. Not necessarily riveted, but the fact that he encouraged people gavet out to help out, he people money to do that, and that caused a few eyebrows to raise. July, and issues of interview with lawrence to cats. With first word news, heres ritika gupta. Ritika joe biden will call for a moderate approach toward rick toward reviving the u. S. Economy today. The democratic president ial nominee in pennsylvania will stay away from more ambitious proposals pushed by aggressive pride pushed by progressives. The u. S. Is that has set another record for coronavirus cases. According to the new york times, more than 59,000 cases were reported yesterday. Accounted and texas for almost 20,000 of them. The positive rate of testing in california jumped to 7 , and gavin newsom warned that it could quickly spike into double digits. Sealedican president has an Unlikely Partnership with President Trump. In a visit to the white house he called for more north american trade integration. He held President Trump for his kindness and respect. Mr. Trump remains unpopular south of the border after calling mexicans criminals and racists during the 2016 president ial campaign. Phonedng to the firm had research, the worst performance, losing almost 10 . Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im ritikauntries, gupta. This is bloomberg. Anna . Tom . Tom thank you. Equities, bonds, currencies, commodities. It is really interesting this morning because there is the same old story in equities with fragile red on the screen, but green on the nasdaq. Indicating highflying tech stocks like amazon and apple. I would notice the 30 year bond that comes in two basis points to a 1. 38. Bonds just pressured down, worried about the economy and what we will see in q3 as well. News items are gold, out really record hi, 1820. That is not near the record high of 2011, what we are getting up there rather quickly. And the bellwether news this morning, to seize the test to see the chinese to see the Chinese Renminbi strengthen. Oft is a huge, huge signal the stimulus to come that i mentioned in china. Anna edwards, an important day for Chinese Renminbi strength. Anna absolutely. Ive got chinese stocks in my data check. We see some resilience there for eight days of gains. The ftse weighed down by rollsroyce, the dax boosted by Cloud Computing and s. A. P. Guest to go to our next on the u. K. Conversation. We talked about what the chancellor had to say yesterday. Shah, Principal Global Investors chief strategist. I want to ask you for your response to the u. K. Chancellor. Was he saving something for autumn . Seema i think we have to hope he is. He announced just enough to offset the furlough scheme, and if we think about fiscal policy as something to bridge financing, from point a to point b, point b being returns, were just not there yet. He told us how he is going to get out of the furlough scheme, putting in place incentives for businesses to rehire those people that are on that scheme. What are your fears about u. K. Unemployment and how high it goes . Seema i think it can rise pretty significantly. What we have seen is in european countries, they havent seen the kind of increase in unemployment that we have seen in the u. S. Companies just have not had to let go of their employees. Away, it ise that not enough for Many Companies to p their employees tom tom keene in new york. Good morning. Heareally interested to how these worries about the labor economy extend out the economic recovery everyone is talking about in q4, even to q1 of next year. This principle just assume it will be a slower recovery echo seema . Seema we do. We think it will be very protracted. It is down to a lot of the pentup demand. That can be dissociated. There is a limit. We have to start thinking about the scarring. We have to think about the labor market. We have seen what happened in the u. S. And the u. K. Is pretty likely to come. Alongside unemployment comes rising bankruptcies. This will take a long time to return to normal, and it is important for governments, and extremely important for governments to step in to maintain the role they have been providing. Tom this goes to what anna edwards said moments ago. Do you just imply in terms of stimulus what we are seeing in terms of the chancellor as just another tranche and there is a certain assumption of a set of eight in september or november of this year . Seema i think so. What is interesting is when we think back to march, when a lot of governments first announce their policies, what they have assumed is that this will be over with in about three months and things return to normal, activity would be progressing. The truth is that this is not happening very quickly, so stopping it here or even in three months is probably not enough and it is going to be a struggle for governments to withdraw their help. It is starting to creep in everywhere, about extending these schemes. Anna from a Monetary Policy perspective, do you expect to see in the u. K. The negative Interest Rates or yield curve control . Are they just so low that right now none of that would make much difference . Seema i think it makes a difference. For the u. S. ,nd negative Interest Rates are proving disastrous. It is the one thing they dont want to do. Explicit yieldy curve control. If we did see a lot of the issuance needs that governments ,re going to be putting through putting treasury yields higher, think Central Banks will step in at that point. I think the hope is that what they have done is enough, but the onus is on governments to maintain what is important. U. K. Banks have been keen to be part of the solution rather than the problem, as they were 12 years or so ago. If we saw negative interest would u. K. Banking the u. K. Banking sector be ready for that . Seema i think so. We just have to look for evidence on the struggles that banks have had. It eats have not into their margins. In the u. K. , over the years negative Interest Rates have come up over and over again. A significant part of u. K. Savings and the economy. Low, the rates are so Building Society issue is less important. We dont want to produce monetary stimulus which is counterproductive, and the marginal than if it is probably too small at this stage to justify going down that road. Tom seema shah, thank you so much. Really interesting conversation, setting up the economics and the mystery of labor. Joblessmerican weekly claims. We will see that at 8 30 this morning. And what follows, Michael Wilson will join us from morgan stanley. This is a timely conversation. Wilson has been dead on about the advance of the stock market. Stay with us. From london, from new york, this is bloomberg. Tom bloomberg surveillance, from new york, from london. Anna edwards in for francine bit more thison a morning. Seema shah, we are thrilled that she could be with us because of the coordinated tensions in the market, looking at the economy, the pandemic, and trying to reach that bridge in the road, whatever you want to call it come out to 2021. It is a great metaphor, the bridge out to 2021. How are the foundations of the bridge right now . Can we get there in one piece . Seema i think it is going to be difficult. There are encouraging signs around the world. Europe dealt with is really well. What has been interesting is that European Data has improved but it has not moved really quickly. I think that is a good thing. Economy movinghe very fast because that means people are losing a lot of what they need during the advisor during the virus. Go all fx on you. What does it signal that we see dollar resiliency, maybe a little bit weaker here recently. I will call it dollar resiliency. What does it signal that we see is chinese yuan through seven with new renminbi strength . Interestings been with china. When we look at the emerging the emergingonfirm asia region study, and china within that. First in, first out, they have done very well controlling the virus. And also getting activity back to at least some semblance of normal. In that sense they are doing very well. Maybe we have some event that is going too far, too fast, but if any country is doing particular well, it makes sense that it is china. Anna do you go to asia then, to get exposure to cyclicals . Or is it too early for that evening asia . Seema i think it is a little bit early everywhere. Selective. Be very from a sectoral perspective, we Like Technology. Like south korea, we like china, we like singapore. We would like latin america and india a lot less because it seems they are struggling more with the virus. But i think there are spaces for the cyclical space. It just needs to be very selective. When we look at the geopolitical tensions, it seems to be plentiful between china and the u. S. , china and the u. K. , china and australia. Is there something to the chinese growth story in the geopolitical story, or will china remain immune . Seema there is risk and we should not ignore that, but i think this is something it is a pot which is going to be boiling for a very long time. This is not just going to happen overnight where china feels the pain. Over that time, the Chinese Government would be very astute to work out different ways to get around and maintain various areas within domestic growth that dont happen to be so dependent on the foreign platform. Tom pulled us into my confidence to own equities now. We can talk about economics all we want. We had the mother of all realities off the bottom, very few people have really participated in it. To does principal retaliate have confidence to own stocks . Seema it is a great question, one of the things that we get asked so much by investors. We increase our equity exposure we increased our equity exposure in the middle of march. At the same time over the last with a little extra exposure, we are underweight. The reason is the central bank. There is so much liquidity flowing around, inevitably it finds its way back to equities. In a worstcase scenario, they are a backstop. A dont see much gains, with repeat of we dont see a retesting of the bottom. Be a periodre will of consolidation for a couple of months. Tom it can be a period of consolidation, but youve got the uniqueness of the tech stocks going up. Does that signal that everybody is grabbing revenue there . Everybody is grabbing revenue growth, rather . Seema really key here, when we look under the covers, we are seeing that the stress of the equity market has been focused on the tech sector. That is telling us two things. There is still a lot of caution. Investors are not throwing out going into cyclical space, they are really focused on the technology side. Technology is very expensive, but there is a secular story that has accelerated a lot of the trends already in play. As long as regulation isnt something that is looming large over technology rates right now, we still Like Technology even though valuations are quite expensive. Tom what about health care. What about health care . I am hearing a lot of people talking about, it is not just the pandemic. Hospitals running out of supplies because of the seriousness of the pandemic. Whatgeneral statement, does principal groupthink of the outperformance of Health Stocks after they have done so well . I dont think we feel as strongly for health care as we do for technology. If anything, what we have to think about in the environment, how do we live with the virus Going Forward . Technology is one of them. Just the increased urgency need for health care worldwide, health care stocks, should at least help that support mechanism even if we dont feel ast they can ask for just much as they have done. Thank you very much. Seema shah, thank you for joining us and giving us your view. See her on bloomberg surveillance later today. With sive interview this is bloomberg. Ritika this is bloomberg surveillance. May musk predicts tesla crack the autonomy puzzle. Elon musk told a conference in shanghai the electric car maker is very close to developing self driving vehicles. Tesla is in a race with alphabet, general motors, and others to deliver the first 100 driverless car. Sales set to recover at germanys largest tech company, sap. The cloud revenue jumped 21 . Sap was also boosted by a resumption of Software Deals in asia. U. S. Companies slashed dividends in the Second Quarter at the fastest pace since 2009, according to S P Dow Jones indices. Cuts as the u. S. Slow down. That is your Bloomberg Business flash. Tom . Anna . Thank you very much. The europe, we are s p seems to be doing a lot of the heavy lifting, up 1 elsewhere in europe sluggish. Tom very good. As i said at the top of the hour, we are watching some most interesting dynamics. Gold moving up again, up to new recent highs. Buttressed up against the 2011 hi, which i believe was 1880, maybe 1885. Without question, the number one data item of the day is the Chinese Renminbi strengthening to 7, coming through to 6. 98. Thenger, huge signaling to equity markets not only with china, as anna edwards mentioned, but worldwide as well. You can see the continued green on the screen with the nasdaq, and the early futures in america. Please stay with us. On economic, finance, investment, this is bloomberg. Jonathan fenby next. Tom good morning, everyone. Bloomberg surveillance from new york and london. One of the things true about china is you have to read up, read in. Or are all sorts of good books. You need to focus on is someone like lord patton. Someone who will read more recently. Has beenfamily prodigious about writing about the chinese experiment and the revolution on how hong kong has changed. We are thrilled jonathan can join us. Thank you for being with us. This beat of change in hong kong has shocked everyone. Where will hong kong be in six months . Jonathan hong kong in six months, even more politically under the control of beijing, the mainland. Clearly an assimilation rosettes going on politically process going on politically. Question is how will that affect hong kong position as a Financial Sector and business. Beijing has been getting ready for this are some years now, over the last 4 to 5 years, and they make sure the one country dominates the hong kong system. Tom you are a giant of studying the microchasm of china, and your excellence on france as well. How do you presume these new political constraints will fold kong,o education in hong medicine in hong kong, and for that matter, general society . Jonathan education, we have seen signs of that in the school with textbooks being affected, and there will be a promotion of certain education, to be in line with the mainland. Beijing believes education is will be atant, and it further contributor producing reducing it in hong kong itself. I think society will become that much more cautious, and the big question is how much that will affect the hong kong spirit, which has been behind hong as such aition business and Financial Center. Anne when we look at how we got to this place, between hong kong and china and the rest of the world, do you see it as inevitable . Do you look back and say this is always going to happen . Or was this room or was there room for this to turn out differently . Jonathan if you take the period in 1997 after the handover, the high degree of autonomy promised be hong kong seems to applying. Its really in the last four years or so where you have had a much stronger lead issue in beijing, which has put the emphasis on centralization, on harmonization as it is called across china. Moving think was inevitably in this direction. Then, the protests switch roque out a long summer which the Hong Kong Government was unable to deal with, i think really pushed beijing into saying we are the masters now. We are going to decide what one country two systems means. And aggregated the authority from that. Legislature to the hong kong Peoples Congress in beijing. Kongs happening in hong ofls part of a broader story how concentration and accumulation by the calmness communist party and xi jinping in beijing. Anne well western protests fall on their fears . We hear the response from china is people should other countries should not meddle in chinese affairs. But with the u. K. And australia offering path to should addition ship, does any of that to citizenship, does any of that matter . Jonathan no. I dont think it will affect beijing at all. Its a plan and they are moving ahead with that. Weve seen a couple days moves on the internet. All of that will steadily move forward. There was a speech this week from the Chinese Foreign minister which basically said we can get on perfectly well with , but thisf the world is the important but, so long as the other countries respect what ,hina does, chinas action particularly in its own borders, and that applies to hong kong. Tom one final question and we will come back on europe and france as well. That is simply, how do you gauge the future prosperity of financial hong kong . To all of us, there was a religion to us, a path, a philosophy to finance and banking in hong kong. Is it forever gone . Jonathan no. I dont think it is necessary. I think beijing we are still in the political phase if you like of the National Security law and change in the relationship fan status of hong kong. Think medium and longerterm, beijing is going to want to go on maintaining hong kong as an important Financial Center, a conduit for funding and financing in and out of china. As a Financial Center has a future, but it will the on different terms. Tom jonathan will continue with us and we will look to his expertise on france and europe. We have much more coming up. Right now, in new york city, here is ritika gupta. The number of Coronavirus Infections worldwide has gone over 12 million and those have been some of those have been in the u. K. U. S. Texas and california accounted for 40 of cases. The Supreme Court is expected to rule on President Trumps tax record. The issue if the attorney can see tax returns and other financial documents the president has fought to keep private. The president has lost so far at every step but they have not been turned over pending a final port ruling. The foreign minister has blasted policy Benjamin Netanyahu is consolidating powers. As he tries to rein in a second coronavirus outbreak. Parliament has given his cabinet the power to take any decision needed to curb the disease, and domestic security has been given the authority to review contact tracing. Netanyahu says this acquires extraordinary steps. His critics say he is undermining democracy. Global news, 24 hours a day, on air and on quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im ritika gupta, this is bloomberg. Anna and tom . Tom greatly appreciated. That is it for anna edwards. She needs to get ready for an exclusive interview on the summer statement by the chancellor. Anna, thank you so much. Francine will step in here in a moment with our coverage in london. We will have much more, particularly on the pandemic. David westin in conversation later today. Stay with us. This is bloomberg. Good morning. Tom good morning, everyone. Bloomberg surveillance with a movable cast of characters. Ranting, i have no idea what she was doing this morning. It was a football match late last night. Probably tutoring her children. Francine [inaudible] what else . Tom tell us about it, francine. Francine its the only time embassies are open in many is betweenuntries 9 00 a. M. And 12 00 p. M. , which is perfect when you are an anchor on bloomberg your bossce because is super happy that you have to go take half of your shift talk to get your passport. Tom it speaks to so many of the tensions our viewers and listeners are feeling about moving kids and moving themselves around. Every company is dealing with the visas and ring cards, and all of that. Why dont you continue with mr. Fenby. Francine we can talk about french bureaucracy as well. Tom has a beautiful new shot. I leave for an hour and he comebacks with beautiful shots of central park. Lets talk with france, with jonathan fenby. Jonathan, tom and i were having a little fun with some of these embassies that arent open all day, but it goes back to something deeply european, which could be french, could be italian, could be spanish. We also had a reshuffling of the mccrone government on monday Emmanuel Macron government. Process for a new this government who wants to stay ahead for the next couple years . Asathan the reappointment Prime Minister teens president macron means president macron could seenink this is generally is taking an even higher profile himself. All of this is in view of the runup of the next president ial election. Francine what does a nupathe look like under this new Prime Minister . The party was delta quite a blow last month. What are people the party was delta quite a blow last month. What are people unhappy about . Part of unhappiness is the national way of life, and there has been criticism of the andling of the coronavirus, Emmanuel Macron is seen by ,eople as being out of touch having gone to the right. Thehas lost the ground, local elections, the green protest policies did well out of this. He has to rebuild for the next president ial election. Throughout the case his session. There is no strong opponent, no strong contender for his position. He has to refashion the message going ahead for the next president ial election and reelection. What does the shocking pandemic to to the huge desire of the french, to paris, to be a new part of modern 21stcentury capitalism . Does a pandemic help paris compete with london, or does it hinder them . Jonathan i think it put paris a bit on the back foot here. As for london, im not sure london will come out of that. The growth of paris, the Financial Center and business center, depends largely on the development of the european project. And of course they are working together to strengthen the euro partly through the release for the pandemic. And i think from this future is macrons future is pretty bound up with europe. Tom i have no idea what the answer is to this question. Jonathan fenby, what does the Party Structure look like in france in 2, 3, 5 years . Does the right have a voice like they had . Jonathan no. If le pen fails to unseat marcon, i think she will fail to do so, and mccrone is reelected macron is reelected. His party has not established itself as a deeply rooted increasingrty, fragmentation and president ial politics. Francine thank you for joining us this morning, jonathan fenby, chairman of china research. ,ater today, Glenn Hubbard former chairman of the u. S. Economic a counsel economic council. That is 5 30 p. M. In london and 12 30 p. M. New york. This is bloomberg. Francine this is bloombergs ritika this is bloomberg surveillance. Bed, bath beyond plans to close 20 of its stores over the next two years. They operate more than 950 locations in the u. S. And canada. Like many retailers, they try to scale down ecommerce business and negotiate with landlords. The pandemic locked down sent sales plummeting 49 in the latest quarter. The sales drop has gotten worse as airbus failed to get any orders last week. Jobsannounced a cut 50,000 at his jetline unit. Warren buffett is dropping it down the ranks. Fortune putsichest him in eighth place on the billionaires list, the lowest he has been since the index started in 2012. You can blame his generosity in part. He gave almost 3 billion in Archer Hathaway stock this week. That is your Bloomberg Business flash. Tom and francine . Francine yesterday, we had a conversation with the italian finance minister. Tores a lot of pressure politicians for italy to accept the esm credit lines. People say there could be some stigma attached. I asked that question and they say no, they are giving the possibility to tap into the esm. Here he is. We are the first to take a number of lockdown measures and other countries followed them, which have been essential for containing the virus and for us to reopen gradually the economy. Response, we are revise ourwe might forecast, but out of the data so far, the indicators tell us [inaudible] so we expect so far closer to our forecast. We are working on phase two, at the european level and national level. The role of states in the economy is increasing all over the globe because of the pandemic. In italys case, how do you reinsure investors that think state control leads to inefficiency . They take a stronger role to protect the economy, to inject guarantees or sometimes even capital. Only when ito this is necessary. As it is necessary. Italy do anything to measure success, to have a commitment . Is there anything you can negotiate with . Common sense doesnt always prevail. The problem of making good use of this is [inaudible] we all have to make the best use of these resources. Based onources will be a model very similar to the , which makes the resources dependent on the concrete limitation approaches. A positive ownership of Member States defining the plans, but the plan has to be coherent with common goals. Proposedthe commission has struck the right balance between grants loans they mention. We will oppose any [inaudible] we will support the proposal as it is. As far as the timing, i think everybody is aware timing is essential. Conclude a position by july, and im confident a decision will be made by july. Francine that was the italian finance minister speaking to us yesterday. European stocks are snapping a two day losing streak. Investors are trying to keep faith that the economy wont be as bad as we thought two months ago. This has been helped by reassuring earning news. Dollar fluctuating and i wanted rising, andthe yuan gold holding above 1800 an ounce. Tom those are the two data items today. Gold is not at the 2011 highs, new recent highs. I cant say enough about the symbolism of chinese yuan, going from a seven to a 698. This really underpins the belief in china, in the united dumb, and in the u. S. Of stimulus to come to support the markets. We are clearly seeing that within the equity markets over the last number of days. Maybe today is the day the nasdaq 100 will go down. We have much more coming up. Have a good Market Briefing as well. This is bloomberg. Tom this morning, millions of americans are furloughed, and they may become laid off or fired. It is a grim actor. The jobless report is at 830. Vice President Biden will travel to his scranton, pennsylvania. He pictures a path to victory. He says no to the hard left and will offer an incremental path, to economic prosperity. You know the story and drill. Tocks surge, gold surges 1800 and ounce. 1820 an ounce. China will provide united k will abide stimulus. Trump and biden will provide stimulus. Good morning, everyone. Tom keene in new york, Francine Lacqua in london. Thrilled you are with us. Everyone is really talking, and this goes back to the chan