Transcripts For BLOOMBERG Bloomberg Surveillance 20240712

Statistics. Trust me, i got a lecture this morning on my way into work about these risks of age and weight, and the number one message i have worldwide is not what you or i think or what all the good people of journalism it is what the medical people think, and they are one week out. They are one week out, and then they are in search of pneumonia. The linkage of bacterial illness with this virus is what the pros are worried about. Wish everyone a speedy recovery, but that is a timely reminder. We will have plenty more on that. Lets get to bloomberg first word news with three to ritika more on the stunning news from the white house. President trump has tweeted that he and his wife milani a he and his wife, bonnie a trump, have tested positive for coronavirus. They plan to remain at the white house. President trump will continue to carry out his duties without disruption. In london, a warning that the city is at a Tipping Point when it comes to the coronavirus. Residents are taking immediate avoid catching the disease. That virus hasat taken off again because britons were not following the rules about social distancing. The numbers are expected to show a sharp deceleration in labor market gains. According to analysts, employers added 875 thousand workers in september, down from almost 1. 4 million in august. The jobs report is out at 8 30 new york time. The house has passed a 2. 2 trillion democrat only stimulus package. Talks betweent nancy pelosi and Steven Mnuchin failed to yield a bipartisan agreement. Democrats have been demanding more spending than republicans will accept. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im rich. Ountries, this is bloomberg. I am ritika gupta. This is bloomberg. Francine tom i dont want to oversell the shock of the data. Fromlasticity of yield 0. 68, and on the shock of the announcement earlier this morning in the United States, down to 0. 6 5, 3 basis points, but we have come back a little over halfway from the initial shock. There is a market reaction, there is no question we are off the bid, but not like you would think. Dow futures 3. 11. Markets, dollar churning. Sterling on a bid, which i guess would be expected. Francine i guess the brexit news out there, we understand that Boris Johnson will intervene to try and break the impasse between the u. K. And the e. U. That will be put to one side because the focus is firmly on the u. S. And President Trump. We saw ruble, for example, russia internalizing the virus results, oil slumping, gold holding up. We could do a data check all day, but the various mood is we are off the day flows, but still off the risk aversion as the market tries to figure out there are so many questions and so little answers at the moment. I think that is what the market is trying to grapple with. 31 days left to go until the election. President trump tweeted that he and the first lady had tested positive for covid after one of his closest aides contracted the virus. Trump tweeted that he and milani elania will be quarantining immediately. Peter trubowitz, how should we look at this . We dont know the symptoms he has, the viral load he has been exposed to. If the president is ok, if he recovers without anything to worry about, will that affect the polls and the campaigning . look, im happy to talk about the election come up with the central issue here this morning is continuity of government. Obviously the first concern is 74,president s health at and overweight, he is any highrisk category by the cdcs yardstick. We should keep in mind that after people in this age group, only about half show symptoms, and only 20 in this age group and up in the hospital. While i know the markets are going wild this money, we should take a deep breath and keep that in mind. Having said that, the president s vulnerability does put the issue of continuity of government immediately before us. The 25th amendment grants the administration the power to temporarily transfer authority to the Vice President. If the president is medically incapacitated. ,ow, if trump has been exposed one has to worry that Vice President pence may have been exposed, too. Next in line would be speaker nancy pelosi. So im assuming as of this morning that both mike pence and net to pelosi are in selfisolation. Pelosi are in selfisolation. I think thats extreme important. If you want me to turn to election implications, i will do that. You just laid it out and we knew this ourselves, that there is a list of people that will take up residence place if he is incapacitated. What we dont have a rulebook if he cannot be on the ballot, already millions have voted by mail. What happens then . Peter that gets very messy and very complicated. You can think in terms of donald trump being asymptomatic and a scenario where he recovers and so forth, and then maybe we can turn to the scenario which is a pretty dire scenario. I think the immediate electoral implications, they really depend on how trump fares medically, and also i should point out here, i think, on whether biden contracted this from trump on the debate stage tuesday night. Donald trump was shouting a lot toing the debate, and just g go back to toms point at the top of the hour of what the experts say, we know that raises the risk of a carrier spreading the virus. The immediate effect is that trump will not be campaigning for 14 days, and that if he is going to complain to the extent that he campaigns, it will be virtually. This is clearly a problem for the president , who trails badly in the polls, and all but self imploded on national tv on tuesday by failing to reject White Supremacy groups. And i noticed this morning, trump took a hit in the president ial betting pockets right after that debate, but he is in freefall this morning when you look at it. I dont see how this helps trump, to tell you the truth. I think some people will feel sorry for him, but i think this was an accident waiting to happen. Expertsauded his own that she has flouted his own he has flouted his own experts guidance. This was a known known. Americans watched the president tuesday night mocking joe biden for wearing a mask. Tom, do you want to jump in . Tom we are showing images of secretary of state of the United States mr. Pompeo will be visible. We are a little unsure whether that was taped or a live image of mr. Pompeo. Trubowitz, the 25th the moment, section four of that amendment, which really shows a process with the Vice President and other officials basically we areress will all distant from that right now, but there has to be a process, with dr. Connolly in the coming hours, to begin, as they say, his convalescence. How will the people around him adapt and adjust on a friday morning, to the good doctor and the president s convalescence . Peter you ask a great question, and one really with this white simply does not know. What youre raising is, a larger question about the 25th amendment and the constitution, and the truth is, it doesnt really offer a clear procedure for determining whether a sident the possibility of a legal fight if it came to a transfer of power. Again, though, it is very easy to rush down this path, and we are very early days here. The president so far is asymptomatic, as you pointed out at the top of the hour. The first week is the easy week. The second week is the complicated one. But i think we need to be careful that we dont rush in too quickly. Tom a constitutional lesson from mr. Trueblubowitz. Things that the nation has never considered. We showed dr. Connollys comments earlier. The president s personal physician from notre dame. Highly esteemed, particularly in emergency room medicine. No doubt we will hear from dr. Connolly today. Have so many voices coming up now that it will be extraordinary to see, and of course all of this over a jobs day. We will have, of course, our usual guests here as we move in and out of this developing story with the president of the United States and misses trump. Kudlow in the 9 00 hour. Stay with us. Francine this is bloomberg surveillance. Town,here is one story in President Trump and his wife, melania trump, have tested positive for covid19. It rippled through the markets. Some of the markets recouping the losses, but so many questions and it is only 5 00 a. M. In new york and washington. Us, j. P. Morganns chair of global research. I guess what we can only do at the moment, and thank you for waking up early for us. Is to try to figure out what the questions are that we need to know. We dont know if the present is safe and will be and what that means for the election. Ce first of all, we know we hope that the president and the first lady do stay healthy. We need to know what the full extent of the outbreak is. There have been so many meetings between the debates and the fiscal package, reports that hope hicks had been with nancy pelosi. This willredid be disruptive to both the president and they have to do the Contact Tracing and see how how disruptive this could be and whether things will continue given the new developments. The second thing i would say to watch is really how this could impact some of the senate races, because that is really where it looks like there was a tossup. Is this a potential in some of the senate races . We have looked at the democratic candidate in North Carolina raised a record amount of money very recently. This has changed the odds for the senate, and that is where the markets will focus because a lot of the questions that are about tax cuts, fiscal numbers, that requires senate approval. The current phase for fiscal package right now. But ultimately i think for a lot of foreigners and people in the u. S. Watching all of this, they see this as a referendum on how well the institutions are working, in the u. S. How well the processors the processes are going to work. That is what they will be focused on in the next few weeks. Francine does this delay the opening of the u. S. Economy . Are certain governors in states going to decide to either close down shop because they are afraid, because they have seen the president sick, and what does that mean for the economy . You are seeing in europe we are seeing the resurgence of covid19, but in part of the u. S. That had been happening as well. That debate was already underway before this. We have had the view that your output is going to remain below full recovery until there is more of a Health Solution to covid19, so i think what you are already starting to see after all of this stimulus was more divergence. More divergence and asymmetry. That is really what is in store as we head into the end of the year and looking to 2021 as far as how we could see economic performance, corporate performance, at even at the household level. More divergence after this record fast selloff and fast stimulus. Tom joyce chang, thank you for joining us. We welcome all of you worldwide as the head of research at j. P. Morgan is with us at this most interesting time for the nation. Joyce chang, what this comes down to in the coming days with the great unknowns we have is what the shifts will be if the president sustains his strength, or if the Vice President takes over, or if we have a biden victory. No one knows that great uncertainty. For the markets and for our Financial System and our banking system, does this politics uncertainty actually matter . Is the outcome over the bridge into 2021 pretty much the same given trump, or given pence or given biden . Joyce we had just put out a report recommending investors should be heading volatility risk around the elections, but ultimately we think that you stay long risk here and you put on these hedges. That is irrespective of what the outcome is. So this is one more thing that is going to make the noise pickup, but we dont see something that even if you see more questions about the reopening, we dont see Something Like a nationwide lockdown in place. We do think that the Central Banks are going to stay very accommodative. We do see that the numbers that are printing now, the jobs numbers that we are looking for would continue to show some improvement. But that is sort of the global story. But then there is the divergence within that. You will have some asymmetry and divergence at the regional level , which companies are performing well, and north asia has stood out well in its outperformance. That is going to continue. Small businesses have been left behind, but earnings have been strong in other places. Some of these big macro trends i dont think are going to change with the election outcome. It is a test of the institutions. Tom i think within the shock of what we have seen in the last four hours of after jfk and into lbj when there was a time of great, great action, can we have an equivalent shock here and somehow find a stimulus package, some form of compromise here come out of the shock of our leader so ill . Joyce i think the two sides are just too far apart. On the democratic side, and 500 billion on the republican side. I think that is too hard a gap to close and there are too many other things going on right now. Vote,ve the Supreme Court obamacare is supposed to be before the Supreme Court, around november 10, november 11. And what happens with that . We have phased out phase 4 come and that is meaningful to the economic numbers. Quarter 2021 growth from 2 to 2 to 2. 5 . Tom we are going to have to come back to that. That is a new topic. Joyce chang, we will continue with the thoughts from one of americas major banks. This historic moment for the nation, a president is ill. Coming up on bloomberg surveillance, we are thrilled to bring you the World Bank President , david malpass. Many more guests here from the world of virology and medicine, and also of course this job stay, we will speak to our usual wonderful guests. Stay with us worldwide. Stay with us. This is bloomberg. Ritika this is bloomberg surveillance. Im ritika gupta with your Bloomberg Business flash. Today walmart rib reportedly announced the sale of a majority stake of a Consortium Led by tdr capital full to the price come about 8. 4 billion. All of that according to sky news. One of the losing bidders is that walmart has been looking to a for at least two years. A digital version of the euro the ecb will hold a Public Consultation in a major step toward introducing the technology. Cryptocurrency such as bitcoin is looking at how Payment Technologies are developing full time General Motors may revise its deal with electric truck ola. T up nicho the Company Shares are down more than half since the deal was announced september 8. That is the latest Bloomberg Business flash. Tom a deterioration in the tape. We had a sharp deterioration at the 1 00 hour off the president s tweet that the president has the onus along with the first lady. Has theegative illness along with the first lady. The dow negative. The vix, 28 point 85. Dollar, fractional strength with a safe haven sense. I would note the real yield, it has come back to a more negative statistic, a. 98. On the 10 year yield. Francine . Francine i am looking at gold ticking higher, stocks selling off on the u. S. Geopolitical risk, selling less than they were about an hour and a half ago. The other thing with the market is euro area cpi readings for september, giving the markets another reason to feel gloomy, but frankly the data will necessarily take a backseat compared to u. S. Politics today. Coming on the open with jonathan ferro, mohamed elerian, bloombergs opinion columnist, that great interview coming up at 9 00 a. M. In new york, 2 00 p. M. In london, and this is bloomberg. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Tom good morning, all. Bloomberg surveillance from london and new york on a historic day. The president of the United States is ill, as well the first lady, in the last number of hours, sick as well. We go into a study further of this virus and the medicine 46, deteriorated in the last hour. I would suggest many safe havens are contained euroswissie one of those indicators. Quite quite yes and. I would note that american oil was texas intermediate, finding a new low, 37 point 32, down 1. 30 on oil. We are most fortunate she was up early. Who knows why . Joyce chang is with us from j. P. Morgan, along with all of her research ability. We are all getting up to speed here on frankly good healing for the president but also the idea that it may turn and go the other way. What would you presume to be the economic reactions if the president s condition deteriorates in the next seven to 10 days . Joyce i think it is going to put more focus on where are we with respect to finding a vaccine and how quickly that can go. We have nine leading drug manufacturers that are in phase three of testing, but testing for biotech analysts who i strongly recommend you speak with, cory chasm of that he says he says late 2020 one. Even though you are going to continue to see positive ,eadlines on the vaccine rolling this out widescale is still something that is a process. Tom one of the highlights of our week, just a wonderful conversation with john normand about the correlations within the market. They all seem to spin around this american difference with europe, which is we are struggling to find stimulus, we are struggling to find aid to aggregate demand with all the layoffs. It is jobs day, and yet europe seems to be fairly comfortable with income substitution or income replacement. Could that be a change in the United States off of the president s stock . Joyce weve already seen the see changes from both the ecb and the fed, which was talked about. Markets are always going to want more and ask for more, but what we havent seen is if any of this has brought inflation back. Where allstability is of this comes to, just to assure stability. I think there is that debate right now. The Recovery Fund does that mean more of the fiscal union in the u. S. . We are looking at, if a Biden Administration comes in, that that he would add another 2. 5 trillion over the next decade. I think you will have this discussion, like we have blurred the lines really between the monetary and fiscal, and also you have this unusual coordination, which we havent seen before in crises between the central bank and the treasuries as well. Are we looking at something that rc changes from the way we have looked that are see changes, with the comments, that this ordinary is no normal, we have seen the strategic framework that are changing. I think we are seeing more discussion on the fiscal measures that will need to be forthcoming and the aftermath in the aftermath of this crisis. We still have output about four Percentage Points below where it was prepandemic at the end of 22 anyone was so this discussion will stay with us. If President Trumps health deteriorates, we do have a template for how you move power to the Vice President. What we dont know is possible constitutional chaos. What exactly is the Market Pricing in . Are they discounting worst case scenario, or is that something that the market will wait today to find out exactly the severity of what we are moving toward . Joyce i think ultimately this ref this election is going to be a referendum on how well the american institutions are working. As well as who are they working for. Before this 300 different lawsuits that had come up, the absentee ballots, the early mailin ballots this is one more test. The marketsthat will be looking very much at the yield processes, yield play out thehey should play out, and timing on the election, the congress changing, you dont have a period of bipartisan copper ration bipartisan cooperation. Not just the things that we are watching at the president ial level, but what plays out at the congressional levels. That is in many ways more meaningful for markets as far as the type of market moving events that will be passed later related to tax reform, increased infrastructure spending, and these kinds of measures. We also saw a tweet from the global times of china, where a lot of support came in for President Trump, wishing him a speedy recovery from leaders around the world. I dont know if we have the trump but if president has covid, it was because he wasnt careful enough. Is there a danger that President Trump retaliates, and that within 30 days of the election, with more tension with china on trade . Joyce the u. S. China tension is here to stay. That is one of the dynamics that will not go away, in part because china was first in, first out, and looks like one of the truly vshaped recoveries. They have the democracy and human rights issues along with trade issues. Now sixate this right weeks before the Elections Come i think this changes the focus. It change the focus to making sure that the american processes are functioning the way that they should function. They are going to raise a lot of questions. Tom raised the question that will the debates continue as planned. It is a different election as well because everybody is saying it all happens election night, but having early voting means that you will have these early voting counts in the news about that, and who has requested the ballots, which side, democrats or republicans earlier . A couple weeks earlier than just watching election night. Francine lets bring up the tom joyce chang, thank you so much. Lets bring up that tweet again. This is a timely tweet from china in the global times, considered to be a path for the government to speak to the world. The president and first lady have paid the price for his gamble to play down the covid19. The news shows the severity of the west pandemic situation. It will impose a negative impact on the image of the president and the United States and may also negatively affect his reelection the opinion of half a world away. Opinionsl be many more through the day and we will monitor that for you on this horrifically busy day. We will speak with many medical experts about the path forward for the president and the first lady. The first word news in new york is ritika gupta. Ritika more on the stunning tweet from President Trump. Earlier today he tweeted that he , haves wife, melania tested positive for coronavirus. That happened not long after hope hicks, a president ial aide, tested positive. President trump is expected to carry out his duties without disruption, according to the white house doctor. The winner ofthat the election will inherit an increasingly shaky economic rebound. Atwill get the jobs report 8 30 a. M. New york time. And the Trump Campaign says the commission that runs the debate is biased against the president. It is criticizing proposed changes for the next event to limit interruptions including a mute button. Republicans are not threatening to boycott the debate. The proud boys are being condemned by the president , two hefter he did not condemns the proud boys, the ku klux klan, and other white supremacists. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im richieuntries, caputo. This is bloomberg. Ritika goofed up. This is bloomberg. I am ritika grouupta. This is bloomberg. Francine this is bloomberg surveillance. Tom and francine from london and new york. We look at the markets and traders are pondering the trump shock and what this means for their markets and their positions, and i have to say the markets are calmer than they were two or three hours ago when we found out the president tested positive for covid19. For some much needed perspective, we are joined by Wolfgang Munchau. There are many questions, many questions about who the president could have potentially infected, many questions on whether this plays out in the polls and what happens so close to the election. What is the one thing that you will be watching out for today that you think the market is missing . All, the first of question is has he infected anyone else . He had a debate with his opponent, joe biden. They were standing apart, but he has met with many people, so that is clearly they would be a different scenario if both candidates were infected. I think the question is how the public reacts to that. It is not clear at all. The presumption that this is bad for him and that would also be my first thought, that this is bad for him. It on the other hand we have seen in the u. K. , when boris got infected, that initially boosted his popularity. His popularity later when he mishandled the crisis that his popularity stumbled his popularity stumbled later when he mishandled the crisis. It maye an element not be enough to win an election, but there is an element that would be on any market it is not a clearcut thing. This is why the markets are not pushing this in one extreme direction. As one might have expected listening to this for the first time. This is one of the events that could go both ways. Francine are you more worried about the leadership in the u. S. , or arein the you worried about the implications of on the election . If there is constitutional chaos, it is unclear what would happen. There areindeed, extremely concerning scenarios, a constitutional crisis. I believe the u. S. Has provisions for this, even for a worstcase scenario, so there would not be a constitutional crisis but a severe political crisis, a political vacuum. The Vice President would have to , anduld be in charge nominally the government would it would add further to global instability, no question. But i dont think this is the kind of big blowup for the global economy. Tom Wolfgang Munchau alluding to the 25th amendment, and we will get onto that on surveillance through the day. This is an extra neri document thisactured in about 65 is an extraordinary document manufactured with the transition between jfk and lbj. Wolfgang munchau, we have always got to digress to this odd thing called brexit. Jon ferro put me in the timeout chair, wolfgang, for bringing up exit, but it seems to be pretty germane right now. What is the interpretation you have on the challenges across the channel . Negotiations are ending today. There is no progress. There has been a bit of optimism expressed. I did not believe any of that, because it is basically the political advisors briefing journalists. Nothing on the ground has changed. This will be decided. I still believe that this will not be decided by advisors, but this will be decided by Boris Johnson himself and the leaders of the e. U. Both will have to move beyond what they said they would accept for there to be a deal. That is possible, but it could well be the u. S. Telling itself for a very long time that these red lines are for real, that it doesnt want a trade deal with such a large country on its doorstep with a level Playing Field and all these other commitments, with the u. K. , everyone selling themselves about being completely independent, cut off from you regulation but yet doing a lot of cut off from e. U. Regulations but yet doing a lot of business with them. Both will have to climb down, and it is really open what they would say to each other. This could go either way. It is not 50 50, it is really that we dont know. But we know that a deal requires both sides to have to admit to their own cheerleaders that they did not get everything they wanted. Tom what is your timeline on this . American, francine keeps me up to speed on this wonderfully. What is your timeline after these important dates . How far does the can move down the road . Wolfgang first of all, never believe a european deadline. The bigwill meet again, summit on brexit. That is where they will hopefully change or adjust the negotiating mandate and have maybe even talk to Boris Johnson somevance so they can have high level breakthrough at the political level, not at the detail level. Hope is ifo the that happens, if there is a political breakthrough, that both the teams, the negotiating teams, go into what is known as a tunnel or a submarine activity, but it is basically where they dont talk to the press, where they lock themselves away in a separate room. That usually takes two to three weeks. If everything goes to plan, we could have a deal by the end of october. If there isnt this political breakthrough, things will continue. I dont think they will give up, everyone will step up their preparations, but there will be continuous diplomatic activities, and i think it is possible for them to still strike a deal in december. Things will be the implementation of the deal, the ratification in the European Parliament would have to be done in record time, but this is nothing compared to nobody will let this fail because we are running out of days to actually having discussions. December is pretty much the deadline. Thank you so much for joining us with euro intelligence, from the financial times. The markets deteriorate. We were 30 something, now 53. Really of note is brent crude, getting down near 36 print here. Waslow in Early September 36. 13. We are not there yet, but with 37. 13. That is brent crude. West texas intermediate is 37. 13, down 1. 59, which really gets my attention. On this jobs day, we are thrilled to bring you Ellen Zentner of morgan stanley. I believe Kevin Cirilli is scheduled to be with us as well, on the illness of the first lady and the president. Stay with us. Worldwide, this is bloomberg. Rep. Pelosi we are still talking, and i hope we can reach an agreement. We think the administration is coming in far too low for our. Eroes i think we are close in terms of money, close on that except we have to see the language. Tom speaker of the house from a different time, speaking with david westin, nancy pelosi, 80 years old. And there is Charles Grassley of iowa, who enjoys his 87th year. They are the focus this morning as the first lady and the president of the United States have the virus. Us, constitutional expert Emily Wilkins from capitol hill. We are all voting up on the 25th amendment may be coming out of the hidden illness of woodrow wilson, the tragedy of the jfk assassination, but as Greg Valliere mentions this morning, with much more, the assassination attempt on Ronald Reagan in 1981, what would you respect to see on capitol hill today from the speaker of the house . Emily both of them, im sure they would probably want the president to get well soon. This is coming at such a critical time in the campaign for trump to get this diagnosis. He is trailing in national polls, he is trailing in the number of swing state polls. This could keep him off the campaign trail for 10 days. The white house is canceling all public events. At this point the first lady tweeted out that she and the president do feel ok, so this might be the case where both of them have it but show no symptoms. This now remains to be seen. This is going to be a huge new story for the next week. Does this mean for a stemless conversation and stimulus negotiations . House passed that 2. 2 trillion bill. It was a very partisan vote. All republicans voted against it, including some democrats who were upset that it was not a bipartisan bill. We are not expecting this bill to be taken up i the senate, but pelosi and Steven Mnuchin have continued negotiations. They were talking last night, exchanging language, so they are still desperately trying to get something done here. You saw the white house come up a little bit on its offer yesterday, and they are struggling with the language for state and local funding as well as various Health Care Provisions in small businesses. Tom i look at the shock here and the tumult as well, and it is mindnumbing to know that a debate is in 13 days. You are kneedeep in this on the beltway. How will Vice President eitan react . Do you have i will Vice President biden react . Do you have any gauge if he suspends campaigning . Emily i think that is a great question, how biden does respond. Because you have seen this Campaign Recently scale up, get biden out there on the campaign trail. It has been a very cautious campaign that joe biden has run, where he has tried to keep healthy, done a lot of Virtual Events from home. Now he is getting out there, and just as he is, trump it will be interesting to see that. Congressy wilkins from and capitol hill. We will hear much more from there today. Up,his jobs day, coming professor Randall Kroszner of the booth school. Bloomberg. Good morning. Tom this morning, now the president is ill with the covid19 virus. He is in convalescence at the white house, his medical team vigilant. What does it mean for campaigning . What does it mean for the debate in 13 days . What does it mean for the nation . It is jobs day. There have been many firings, and into the Fourth Quarter we slide, this historic, exhausting 2020. Good morning, everyone. This is bloomberg surveillance, from our World Headquarters in new york. I am tom keene. Francine in london as well. We have heard from Prime Minister johnson, who has tragically a little too much experience with this terrible virus. Francine as we try and figure out what the market is trying to also look at, which is, does the president s day fine . Does he recover . If you