The market in one direction or the other. As of yesterdays close the s p 500 had rallied 865 point off of its lows on march 23. 251 of those have come from five names. That equates to 29 of the gains we have seen in the equity markets and it underscores the fact the market is held hostage by the performance of the make cap companies. It carries us along the upside but also carries a risk on the downside. Tech is nottoday down as much as some others are down. What is going on with bonds and gold . Kailey we are seeing the classic risk off trade, the dollar is stronger and seen as a safe haven asset, and you are seeing a bid into treasuries. The 10 year yield is down four basis points. Coming slightly weaker, off the highest since 2011, a little bit of profit taking. The more interesting commodity is copper. Dr. Copper usually very sensitive to the Economic Growth story. It is higher today as well. That is a mystery. David that is a mystery. Thank you to kailey leinz for that report on the market. Today is also the last day of this term of the Supreme Court of the United States and it saved some of the biggest decisions for last, two involving President Trump, whether people can get access to his private financial representative his private financial records. Our Supreme Court reporter is here to give us what is more or less a split decision. Start with the new york grand jury subpoena for his tax records in possession of his accounting. What did the court say . Was a pretty clear rejection of the president. Trump was arguing for absolute immunity for president while in office from Critical Data from criminal investigations. The subpoenas went to his Accounting Firm and the president was arguing while i am in office that is too distracting for me to deal with. The Supreme Court rejected that. They also rejected the notion the grand jury would have to meet a heightened standard to get the president s records. They did not allow the case to go forward in the lower court. The president may have other arguments to make but it was a complete rejection of the president s position and the Supreme Court. David the president came out with a series of tweets taking this on, claiming it is prosecute tutorial misconduct it was prosecutorial misconduct. He did not make those arguments below, he said you cannot come after what it is, he did not say there was any impropriety in seeking the information from the accountants. Position in this case, a position in this case that was sweeping, saying as long as a president is in subpoena that a goes to a third party and involves the president s personal information, that is out of bounds. That is the argument he was making and that is what the Supreme Court rejected. As i to be further clear, understand there is a grand jury subpoena. If this goes forward and there not other arguments for the president s accountants turn of the record, that does not mean we all get to see them. Greg thats rise. It is the house case where we might have been able to see them. Unless we are talking about there may be an indictment out of the grand jury investigation. Maybe information will come out through that indictment. Just because it goes to the grand jury, unless there is a leak, we will not see it. It seemed to be quite important these records do not go to confidential communication firms. As president these are not things he said or did in the oval office. These are personal records having to do with taxes. Greg and the reason that is important is because when the president is trying to argue all of this would be distracting to distracting in terms of my duties as president , in this case we are talking about conduct the District Attorney in manhattan is looking into things stemming from the hush money payments to Stormy Daniels and karen mcdougall. That has nothing to do with trumps work as president , even though it was a harder claim for him to make that this kind of information david go over to the other decision that came down. That was the house. To getre subpoenaing Certain Records they wanted. The court was not quite as receptive to what the house was doing. There wereat case, three house committees that send out four subpoenas and they said we have legislative things were looking at. We are looking at president ial conflicts of interest, we are thinking about updating the Money Laundering laws. We are exploring for interference in the election. We want these trump financial records because they will help us with those legislative purposes. Both sides took a pretty broad argument in this case, the Court Essentially said both of you have gone too far. If we restricted congress to the extent trump wants, that would hamstring congress its ability to do its constitutional duties, and if we did what congress was asking, there would be no limits on what they could take in terms of president ial records. Essentially the Supreme Court kicked the case back to federal feels court and said look at them more closely and to be more mindful of the potential imposition on the president. This marks the end of this term of the court, a historic term not only because it had the First Virtual oral argument, but they took on big cases. Give me an idea of how important this term was. Greg when we look back, it will be the term where it became John Robertss court. He was in the majority for every case except for one, and that included several big cases where he sided with the courts liberals involving lgbt Job Description nation job discrimination, President Trumps attempt on the daca program and these restrictions on abortion in louisiana. He did side with the conservatives in an awful lot of other cases that have proved to be a notch below, and then he today,he decisions issue trying to balance the needs of the president on one hand and congress and state grand jurys on the other. David thank you so much. Always great to have you on. , our supremestohr Court Reporter in washington. Lopez cameresident from mexico and got a warm reception. We talk to the former u. S. Ambassador to mexico, tony garza. That is next on balance of power on Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. It is time for first word news. For that we go to mark crumpton. Has the mayor of seoul been found dead. Been viewed asad a potential candidate for the 2022 president ial election. Hard by theeing hit coronavirus. The state reported new records of coronavirus deaths and hospitalizations. 100 20 floridians died in the past 24 hours, that is up from 48 the day before. The states Positivity Rate jumped to 18. 4 . Florida has had more than 232,000 confirmed cases. As david and greg stohr were reporting moments ago, the Supreme Court has ruled much of eastern oklahoma is still American Indian territory. Vote sideds in a 54 with a convicted child molester who argued the states lacked authority to prosecute him because his crime was in the boundary of the reservation. The state means prosecutors cannot the court also said in new york grand jury can get President Trumps tax returns and other financial records but for now has blocked house appeals for those documents. That is likely to prevent their public release before the election. Justices ordered lower courts to take another look at the congressional subpoenas. The case has tested President Trumps claim for protection from criminal investigations while in office. The president responded this is all a political prosecution. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Crumpton. This is bloomberg. David . David thank you so much. Even as mark was reporting, another headline crossed the bloomberg. The faa is probing boeings alleged pressure on inspectors. That is in the 737 max situation which continues as they are trying to get that up and running. The faa is probing possible pressure put on faa inspectors. Lets turn to the usmca. The mexican president came to washington, and President Trump took the occasion to say the usmca is our biggest and fairest trade deal ever. We turn to the former ambassador to mexico, tony garza. Take us into the usmca. You know the relationship between mexico and the United States so well. How important is this agreement . Amb. Garza it is a terribly important agreement and yesterdays visit highlighted, that is just the case as anytime two leaders meet, their political objectives, their policy ends you hope will be addressed and background noise. The overarching theme was the importance of usmca at this moment. Both countries have real challenges with the pandemic, the covid19 crisis, the collapse of the economy both in mexico and the United States. In the u. S. We have serious theal issues, and in mexico constant concerns about security and violence. I think this is not only a moment both president s wanted to focus on something positive, but also a moment to reflect on the forwardes we can go addressing together, not the least of which are Economic Growth and security. In terms of the political objectives, i think they accomplished it. They exceeded expectation in terms of the town and the pictures coming out. Policy is less clear. They did issue a communique. There is a commitment to implementation in a timely and forwardlooking fashion. I think that will be good. Areely the critics today recognizing their hyperbole might have been misplaced. David an awful lot of work went into this agreement. It took years. The question is will there have to be more work done . In the future do we seek quietude. The United States is already threading tariffs on aluminum out of canada . Does their bumpy road ahead on the trade front despite usmca . Amb. Garza you are absolutely right. We have spoken in the past. At the conclusion of the negotiation, the disagreement was greeted more with relief than celebration because donald trump and the mexican president are not free traders. The fact that we negotiated the agreement was very good. , younk as we go forward heard ambassador lighthizers comments a couple of weeks ago. But i hope is that rather than litigation, there is negotiation around issues that are important to implementation. I think you see it primarily in the labor area. The rules of manufacturing will cause heartburn. Ironmental concerns despite the fact that an agreement is placed, the threat of tariffs on aluminum in canada , we are in a political cycle. I do not appreciate i do not anticipate it will be all smooth sailing, but it is nice to know agreement is in force. David how is the pandemic affecting u. S. Mexico trade relations as a practical matter . I could see it as hurting because people do not want to have things crossing the border or maybe helping because people would rather have things from mexico than other places. How is it affecting supply chains . Initially it was very helpful supply chains. Is level of integration profound in terms of the number that components will cross those borders before they leave in the final product. What you had was uneven openings in mexico and the United States where you had manufacturing facilities in mexico that remained closed from the pandemic, and those components are finished goods. Things you would like to see his better harmonization around supply chains. There is a Silver Lining because we recognize there is an opportunity for mexico and north america to move some of the production away from more remote , and i think china mexico if they do things internally in terms of making themselves more attractive and domestic, these are the domestic issues. Certainly the pandemic has disrupted everything in terms of the supply china the supply side and because the collapse in our economy. David what about the collapse in the economy. The pandemic is not hit mexico the way it hit the United States. You might have 10 gdp growth. What is the situation with the economy there and does the president embracing president getp help him back home some of the things done he needs to get done . Amb. Garza yes and no. Not so much embracing President Trump but sending a signal on trade and a bit of a pivot on his policies in mexico. Elects to attracting capital, provide more security around , there was Dramatic Energy several years before in the president has tipped away from the commitment to reform and the energy space. I think that is important question to reassess in terms of energy. At how theyt a look are not only going to position themselves visavis china, but further integration into the north america platform. Shown asense lopez has hostility to capital for a lack of understanding of how important it is. I think this is an important moment. It is all in the Going Forward in terms of the implication of on what will the president do to respect the rule of law and make the country more attractive to investment . David in a nutshell, what is the plan for growing the economy. Energy has been important. Oil prices are nowhere. What is the plan . If it is not energy, what is it . Amb. Garza that has been less clear and that has been the biggest criticism of the president. The pandemic only exacerbated underlying realities. That is that there was no growth , there were security concerns, and the president did not have a clear sense of where he wanted to take the economy. That is still not clear. Up usmca as ad magic wand is misplaced. I think president lopez is doing a little but of that. What he has to do is say i am committed to trade, committed to the usmca. Energy has a place in and recognize his nostalgia for a longer the is no reality of Global Energy markets. There is a lot of yes to take he has to take a serious look at how he is approaching. It is not clear if he is willing to do that. Always helpful to get your perspective on these things. That is the former u. S. Ambassador to mexico, tony garland. Tony garza. Tonight we will talk to phil murphy, the governor of new jersey about how he is putting coronavirus, schools, and that is coming up at 5 00 today. This is bloomberg. David this is balance of power on Bloomberg Television and radio. Time for the stock of the hour. Walgreens is falling as it announced it will have to have layoffs and do stock buybacks at the same time. Scarlet fu is here for a full report. Scarlet walgreens is the worst performer in the nasdaq and s p. Net sales were flat. Growth margin declined as well. Outlook came in better worse than expected, disappointing investors. If you were to look at event diagram of where walgreens fits in, is in the middle between health care and retail. It is on the front line of disruption from covid and longerterm changes in how consumers behave. Rivals are focusing on health care. You look at the u. K. In particular. It contributes the bulk of the pretax profit even though it does not come in as much when it comes to revenue. The u. K. Is where things fell apart. The lockdown led to a 2 billion charge c. David what about back in United States. This is a critical part that we could all go to our drugstores the matter what. You would think they wouldve done better here. Amb. Garza they did scarlet they did, but there was a divergent between whether it was in the urban or rural market curate a big slip. No matter where the stores were located, walgreens spent more to clean stores and to pay employees. You can see the cost increase that led to a squeeze in margins. To address that, it will suspend stock buybacks. Walgreens has a juicy dividend yield, up 4. 9 percent, better than cbs. Over the u. K. Where foot traffic dropped so much, it will cut about 4000 jobs. Conditions will remain depressed for the rest of the summer. David thank you so much to scarlet fu for that report on walgreens. Coming up, we will catch up with head of council of economic advisors at the clumpy is at the columbia business school. That is next and this is bloomberg. This is balance of power. Im david westin. Probingport, the faa is possible pressure being put on investigators. It is now set boeing 777 x may miss its debut target. Says that they may miss the delivery target at boeing. That is the boeing news so far today. We also had jobless claim numbers this morning. They were a little better. Nevertheless, they remain elevated. The economy still seems to struggle. We welcome now Glenn Hubbard with the columbia business school. He was the director of the council of economic advisers under george w. Bush. Weve got the jobless numbers. The equity markets have really been pressing up overall. Disconnect between the equity markets and the Economic Data . Are we risking what Alan Greenspan called irrational exuberance . Glenn it may be, but its not clear. The jobless claim numbers are good news, but there are still 32 point 9 Million People on some sort of unemployment benefits. That is 20 of the precovid labor force. Why is the stock get high . Is, the value of stocks versus the whole future of earnings. If you are optimistic about recovery, most of the future is fine. Second, the interventions have pushed down the discount for stocks and spreads. Third, the stock market is not the economy. It is dominated by large firms, some of which have market power. The market may have irrational exuberance, but it is nonobvious. Even if the stock market is high, it doesnt mean the economy is fine. David is it possible we will have a second wave on unemployment . We had United Airlines say they will have to lay off 36,000 people today. We had boots say 34,000 people. The second half of the Year Companies are saying, how can we have this be sustainable over the long term . Glenn it is. Economics, supply and demand. On the supply side it may be there is not enough activity, in other words people have decided not to return to traditional activity. On the demand side we could have is this failures as a result and credit market problems. The policy has to provide some insurance against this kind of outcome. The virus itself may rear its ugly head again, which puts a lot of focus on vaccines. David one of the subjects you have raised is the demand issue, there might even be demand destruction. Is there anything we can do in stimulus or otherwise . What is the best plan to make sure we short the demand side . Glenn its a great question. Ands two things, insurance interconnectedness. Providing insurance that we dont fall out of bed. And by interconnectedness realizing how businesses are interconnect. On insurance, i would continue Unemployment Insurance, but not with the 600 benefit, which may have discouraged some people from going back to work. Triggers ways to use of statelevel unemployment to provide some extra benefit, just not quite 600. We also need to give funds to states to help make up lost revenue to help support immunity colleges that are going to be critical in rebuilding and retraining people. We will need to continue support for small and incised businesses. Things like the federal reserves main Street Lending facility. We need more support for work. What i have called a pandemic earned income tax credit. David take through that. With anwe are familiar earned income tax credit. How is a pandemic earned income tax credit different . Glenn if you want to support work, the earned income tax credit is already a strong mechanism for encouraging lowwage work. During the pandemic we could significantly,e proposed doubling it, it also making it available to childless workers. That is something that would provide a boost to lowwage work when we need it and probably a bridge to future policy, but definitely in the pandemic. We are now in a phase where the economy is for you. Our goal is to connect people back to work and that ought to be our mindset. David you also mentioned the Unemployment Insurance support. We had this 600 payment, some people are saying that might have encouraged some people not to go back to work because they can make more money by unemployed. Proposalcome up with a with jason furman where you would tie it statebystate into unemployment. Glenn yes, in two ways. One would be to make it a replacement for wages. Not going to get figures as high as 600, but you would still get Unemployment Insurance. Second, to key off the Unemployment Rate in the states. It triggers if a state had high Unemployment Rates. These additional funds would be there. They would face out as the Unemployment Rate goes down. That does a couple of things. It enables you to have a program that is robust. You dont know whether it is a vshaped or other shaped recovery. It also prevents congress from having to come back every time we learn something about the crisis. It puts the expansion linked to the economy. David how do you go about putting together an Economic Policy in this world . There is so much going on. Particularly driven by the coronavirus itself. We have Vice President biden coming out with a plan that includes things like buy america programs. Does buy American Work . Glenn one thing we have seen is this concern for buy american, i dont think it is the right longterm solution. There are americans that have been left behind. We need to be doing something about that. We do need to encourage businesses to have more resilience supply chains, which may need mean having more in the United States. Buy america arent as effective as that, even if they might be a good political slogan. David if you are advising Vice President joe biden or President Trump and putting together an economic plan Going Forward, what would you put the top of the list . Glenn because of where we are starting now, we do need this insurance that we dont split much further. One of the problems in the financial crisis a decade ago is that we declared victory too fast. Going forward, we need real emphasis on opportunity. Helping to connect people to work and then reconnect them to work if things go against them. Support for things Like Community college, support for lowwage work. I would love to hear more of this from both sides this fall. Are our Community Colleges structured in a way that will prepare workers for this century as a practical matter . Are they getting the training we really need for the jobs that will be there . Glenn i think they are. Community colleges are the bright spot. People often Pay Attention to very elite universities. Those are great, that they are not the foot soldiers for what im talking about. The problem when people Say Community college or things like that, it ignores the resources needed to stand up highquality Community Colleges. A lot of state governments have cut budgets or chosen to do so. We need something that goes back to president agains land act or the g. I. Bill after the second world war. That says, were going to make a massive investment to rescale americans to prepare them for work. I think that is a winner economically. David thank you so much to Glenn Hubbard. Is also a contributor to wall street week. We will also be hearing from larry summers. In the meantime, it is time for first word news. According to the associated press, the body of the missing mayor of south Koreas Capital has been found. Daughter he had been missing for a time, within seven hours after police launched a massive search for him. The associated risk reports that parks daughter had called police to report him missing, saying he had given her a willl ike message and the body was found near a traditional think woodhall located in the hills. We will follow more information on the story and bring it to you as soon as we get. The United StatesSupreme Court says a new york ranger he can get President Trumps tax returns and other financial records. For now, it has blocked house subpoenas for those documents. That is likely to prevent their public release before the election. Justices ordered lower courts to take a look at the congressional subpoenas. The president responded in a tweet, this is all a political prosecution. You and u. K. Negotiators are far apart in their attempts to reach a compromise. The European Unions chief negotiator said there are serious diversions is between the two sides. They are trying to secure a new trade deal before the end of the year. The sticking points include regulations for businesses and the fishing industry. Is clearing and parts of asia. Hong kong and tokyo are reporting record spikes. Hobbs,urgence is in the weeks after normalized activity has people returned to work in the restaurants. Both cities marked single day highs today. Tokyo had been mostly virusfree for three months. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. David . David thank you so much to mark. Coming up, were going to talk to senator bill cassidy. About the fight against the coronavirus in his state of louisiana. That is coming up on balance of power. David this is balance of power. Im david westin. Fighting against coronavirus. It had made some progress, it seems to be like backsliding. Now we turn to the senator from louisiana, though cassidy, who is also a physician and taught edison as well. Taught medicine as well. Give us a sense of where things are. Your governor said he white out three weeks of progress because it has spiked in louisiana. Sen. Cassidy blame it on College Students in bars. [laughter] imagine that. College kids go to bars, they dont wear a mask and they crowd in. There has been a couple of super spreader events which seem to be related to social events. So far, the icu occupancy has been flat. The death rate has been flat. Ut the cases are going up so, again, young people being that. The problem is young people give it to older people, so we have to be concerned that there will be a lag with deaths. Dont wantppose you to ban College Students, but can you and going to bars . To try to fix the problem . Governor is the absolutely considering closing down bars. He asked the ones that were particularly involved to shut down. Hopefully it raises awareness. Im told that kids are coming back to school and the school is doing everything right, they are going home and playing xbox with their bodies and communicating it among each other from xbox. You can imagine guys on the couch, yelling and screaming, they are in each others faces. We were passing along coronavirus. Young people are not affect. They tend to get, they are asymptomatic. Its going to be harder to get them to realize they need to be careful. David what about the deaths . You mentioned it is not going up. Is that a matter of lack . Inrida was showing a spike cases, not in deaths. Today the numbers are not so encouraging. Sen. Cassidy clearly it could be a lag. One thing we found out in new orleans, most of the deaths were coming out of Nursing Homes. The white house and cdc had put out regulations as regards Nursing Homes. People working in Nursing Homes are now checked weekly. Ideally we are putting a ring around the people were most farmable. Vulnerable. If we do that, if we keep cases from coming in late, im hoping those most honorable will be unaffected and therefore it will keep our death rate them. That said, if you have a population that has obesity, diabetes, they are still at risk. My warning to all folks is, you may not have symptoms, but if you give it to the diabetic go to school with, she is going to be in trouble, no matter her age. Please be careful. David given all that, does it make sense to you as a senator and a dog for the president in his administration to be pressing so hard for schools to go back to actual classroom teaching come september . I am all for safely reopening schools, if we can do it. The people that have paid the highest opportunity costs given their risk of problems from coronavirus is someone who is five years old. You are only five on senior life. Somebody says a word in a foreign language, and context you know what they mean and your brain absorbs that word. Wouldnt it be great if we were all five of whole life . But you are not. You are 5, 6, 7, tickle ages. The more you are out of school the less you are going to be able to learn. My wife is on the board of a Charter School that teaches children. They are at high risk for not learning. When schools shut down, they wifit computers and access to many of these children from lowincome households. They found one third of the kids never opened their computer. Parents are working, childless home by themselves. No one is comfortable with computers in the household. Forkids at highest risk being left behind in our new economy with those less prepared to do remote learning. We can safely reopen, you know how to do it. Implemented to make sure kids are not left behind because not every family is equipped to do remote learning. David its a really powerful point. I want to turn to a different subject here, when you brought to us. Amazon, and maybe some illgotten gains being sold. Sen. Cassidy amazon just put on an announcement. Beginning on september 1, they will begin to display a sellers business name and address on amazon. Com. This is consistent with what they do in the europe, japan, and mexico. Ive been working on something we call the santa act. Where a gang will break into a fertilizer andel put it up on amazon. They sell it on amazon and they shut down their site. Goods, theis out the sales. But weve actually encouraged a Cottage Industry of gangs that go through. By the way, im told that in the looting that followed the George Floyd Protests that they were organized gangs breaking into a cvs or walmart, systematically taking drugs and other out and then it would come back up on these seller platforms on the internet rate that would be shut down. This is happening. To way to get that is display the sellers business name and address. Transparency will begin to give tools against these sorts of gang operations. Youre going to have a conversation with them. In response to our bill and other pressures they are going to begin to display that. That is good for all legitimate is this. Business. David brandeis famously said sunlight is the best disinfectant. Would you apply that to political speech too . Sen. Cassidy i went. The more that you know about local speech, better. Take thise, just to conversation feel a field, ted cruz is having a conversation with the editor of psychology today. Editor, that he voted for hillary but he thinks ash may have moved as many 10 million votes to hillary. This guy is not a fox news contributor. He is the editor of psychology today. He says that all he did was, you knew from their social network page that people were going to vote for hillary and you sent a reminder to vote on that election day, if dont send it to people you know are going to vote for trump. Clip, fromcinating somebody who is a selfproclaimed hillary supporter. David finally, i dont want to let you go without responding to another thing in the news. Usedcampaign funds being for a membership in new york. I understand your campaign is saying nothing went wrong. This 20 give you a chance to respond to that. Sen. Cassidy its a place where i stay in order to have campaign events. Some of that was misclassified by our accountant. It was payment for a room for a campaign event. If we did something wrong, we will take care of it. I dont want mistakes made. If we made a mistake, im glad somebody pointed out. Some of that was a mistake of the accountant. We will figure it out, it is no big deal. Its not a lot of money. Every now and then folks make mistakes. David except for me, of course. Just talk to my wife. Sen. Cassidy yeah, let me talk to your wife. David were going to keep her out of this. Thank you so much to senator bill cassidy, republican of louisiana. We are going to talk about whether we will find out who the president is come election night. This is balance of power. David this is balance of power. Im david westin. We have some big elections coming up, less than four months from now. We all like to gather around the Television Set or our radio and figure out was going to be the next president of the United States. This year it may be more complicated, with a lot of mailin ballots. Im not going to try and call the selection, but what i think is a risk markets will focus on, probably not until september, is the risk of a contested election. I really am fearful that this election is not going to go smoothly. We still will have a health crisis. Questions about mailin ballots. We may find, just like the fourbush election, and while that was florida, we may find this one locked up in the courts into january. Thats not going to be good for the u. S. Markets or global markets. Thed that was chris, he is cio of casters. Ourove over to radio for second hour. Join us there. This is bloomberg. Vonnie it is 1 00 p. M. In new york, 6 00 p. M. In london, and 1 00 a. M. In hong kong. Welcome to bloomberg markets. Im vonnie quinn. Here are the top stories we are following from around the world. Jobless claims fall but there is more pain ahead. Big corporations readying fresh sands to lay out tens of thousands of workers. We discuss the labor picture as some states look at reopening. Former tarpy, the inspector. He will examine with us the cares act and particularly the Paycheck Protection Program which reopened for applications this week. And me will hear from the ceo of one of new york citys hotel owners, and industry struggling in the pandemic, as americans take fewer trips and Corporate Travel dries up. In the meantime, a quick check on the markets. The vix