Lets break down the data. The ism manufacturing number has come in at 43. 1. That is shy on the consensus, which was 43. 8, but ahead of where we thought things would be at bloomberg economics. The headline number is a bit of ordersaly because of the and the duration of orders component, which messes things up a bit. That number is coming in as expected. The employment numbers picked up as well, and the prices paid number picked up strongly. Lets get a look at what this means for the u. S. Economy. Giving us that assessment is that shes shot is ashish shah. From Goldman Sachs. Lets talk about the data we are getting from the u. S. Economy. We have got the big payroll number coming up friday. My sense is these numbers are getting better, but not consistent with a vshaped recovery at this point. They still look pretty bad and still indicate that while things are improving, the u. S. Economy is still in a tough spot right now. Give us your thoughts. Ashish i think that is exactly right. In the near term, you have real challenges as states are just at the beginning of reopening. While some states are highlighting that they are reopening, the reality is that reopening is the very first step. Having said all that, you have to look at all this data with a grain of salt. it is changing rapidly as things change with regard to the ability to provide safety to workers and to customers. I think we are going to see meaningful change week over week and month over month. Back. First of all, i am guy, super pumped to be with you. To pivot off of that for a second. In the equity market, it is about the rotation into safe value, the deeply cyclical sectors. The Economic Data not backing that up. What do you make of that disconnect . Ashish the equity market is forwardlooking. The equity market right now is trying to discount where the u. S. Economy is going to be six months from now. It is not looking at nearterm data. We saw how quickly going into this that the u. S. Economy stopped. That hit markets really, really hard, and the recovery has been equally fast. As we get more information and as the range of outcomes narrows, equities are supposed to be pricing in the significant liquidity being put into the system by the fed. Alix is that what this is . When you have the Economic Data at not indicating that vshaped recovery, but the equity market forwardlooking end seeing that. Is it purely the fed . It seems like everyone using that as an excuse. Ashish it is both the fed as well as the fact that we are thinking about where are we going to be six or 12 months from now, not where we have been or where we will be in two weeks. I think we all recognize that the world is going to look very different six months from now. It will look different 12 months from now. That is really the value of these companies. It resides on a longerterm basis. We will look at the economy and it is going to look bad because the reality is things on the ground today are bad, but i think as an investor you have to end for and look forward of the forward outlook is going to be strong because between Monetary Policy and fiscal policy you will have a lot of support. Guy lets talk about six months down the road or 12 months down the road. To my mind, the most important number coming out of the ism data we have just had is the employment component. 32. 1. That is an incredibly weak number, and that is with support from the fed and the government. Some of that will disappear. I wonder whether or not we are spending enough time thinking about the implications of what is going on in the jobs market, which looks week now, but potentially could look super week in six months when some of these programs start to roll off. How do i judge what we are seeing in unemployment . That, in theory, is a lagging indicator. How do i extrapolate where we are now for the down the road . Because that is going to set the tone for consumption, a whole bunch of stuff. Ashish i think it is a fantastic question. What we have been trying to do is look at economies that have gone through this crisis earlier and looking at the pace of recovery theyve gone through. I think that that provides the best indicator as to what is going to come back quickly and what is going to come back slowly. You can reapply that back to the mix of employment we see here in the u. S. I think that when we look at places like china that were hit by covid early, you end up seeing that items like travel and particularly International Travel and up coming back very, very slowly, not a surprise. But people quickly want to start going out to eat. They get sick and tired of being stuck in their homes. I think right now the economy is still suffering from this idea that people are stuck in their homes and not consuming at the rate they want to, trying to protect their health. I think looking at those other economies is going to give the best indication of how quickly our economy can recover. Companies, Corporate Leaders are going to be cautious. Mediumsized enterprises are going to be cautious. Look at what is happening in the u. K. There could be upwards of a Million People who are actually unemployed but simply do not know it yet because there are furlough schemes and government incentives to start to support their jobs, but the reality is those jobs will not exist in six months. What happens when these Government Schemes start to roll off . What happens what impact will that have on the data . I think that is absolutely right, but you are missing a critical factor, which is at the same time you have that potential for further job losses as companies lay off folks and start to assess where they are at, at the same time you will have a lot of people that have been forced to save because they have not been allowed to spend. There are a lot of people out or 75 of people that have not lost their jobs, have not been spending at the pace that they wanted to. You see the kind of savings numbers for consumers go up. It will really come down to those consumers coming back and saying, look, it has been a long time. I have been stuck in my house. I want to take a vacation. They are not going to go to a faraway location. They will go close to home and spend those dollars close to home. Alix that is literally what happened to me last week. What is your top three in the fixed income market . Investmentgrade and highyield bonds. We see a tremendous amount of returns is Still Available within fixed income markets. The fed will not go will not let rates go higher. So it will provide you an outsize return. So stay invested and get invested. Thank you for spending some time with us today. We appreciate you joining us here today on bloomberg television. Ashish shah of Goldman Sachs asset management. Updates on what we need to know about. Lets hear the first word news. Another night of chaos on american streets. It was the sixth day of protests since a black man, george floyd, was killed while in the custody of minneapolis police. About 200 people were arrested there last night. In santa monica california, looting. States have called in the National Guard to help police. In louisville, kentucky, police shot and killed a man, they say he was in a group that shot at them. The Chinese Government has halted purchases of some American Farm goods, including soybeans. Some pork orders have also been canceled. The chinese are evaluating the tensions escalating with the u. S. Over hong kong. Early signs of recovery. Goldman point Goldman Sachs point to a drop in the number of jobless claims, especially in states that opened earlier than others. Goldman sachs says it it expected it expected unemployment to hit its peak this month at about 25 . Coronavirus shattered the demand for passenger jets. Welltives at a company discussed production. They have already slashed output. 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. T i to could group am a riddick cook goop to between u. S. And china heat up over farm inputs. We will break it down. Thats next. This is bloomberg. Alix the latest between china and the u. S. Is that china will not import all of its farm goods. Run Companies Purchase u. S. Soybeans. What does this mean between the escalation between the u. S. And china . Joining us now is george magnus. Good to catch up with you. Where are we right now . What is the next step to be taken by either the chinese or the u. S. . Last fridayk to when the president actually made his press announcement about beginning the process of scrutinizing the privileges that have been accorded to hong kong under 1992 act of congress. I think people were surprised he did not say anything about the trade deal on that occasion. To up thely wanted ante in terms of going for china over the passage of this National Security law that is going to be in hong kong, then actually abrogating or walking away from the trade deal might have been something he could have said. There is a political calculation going on. He did not want to do it at the time. I would not rule it out altogether given the proximity for where we are now and the president ial election at the end of the year. The chinese is just a recognition of the obvious. During the first months of 2020, they barely imported more Agricultural Produce than they did in the same period last year. 30 billion away from what they were planning to do under phase one trade deal for this year. So it is just the impact of the epidemic and the crushing of import demand in china across the board. Alix over the weekend, when we saw chinese news outlets trolling trump in terms of the protests and riots here in the u. S. Versus those and in hong kong and how trump condemned those, what do you make of all of that . Is that just noise . And at what point would it become Something Real . It is noise. In and of itself, this titfortat is a way of exploiting weaknesses in one anothers country. This happens all the time. And it is indicative of the very low state of trust and respect, i think, in the bilateral relationship. Having said that, neither trump nor president xi jinping look like they want to basically take this to what i would say is an extreme level of hostility, because otherwise other things that could have happened in terms of disrupting what is left of the bilateral relationship would have happened by now. It is not that they wont. For a lot of people it would be encouraging to know that hostile as the relationship is, it is not a complete breakdown. Yet. Guy good afternoon. The chinese perceive the phase one trade deal as something that trump could use positively or did they see it as something that of a as something of a millstone around his neck . I am wondering how they attacked the phase one deal. They is a positive, then may take a different approach than if mr. Trump i probably should not sign that. What is the perception in beijing of how that deal is seen in washington . That the motivating, the main motivation for the chinese agreeing to this deal with trump, which they signed back in january, i think was little more than a time buying exercise, really. I think it was to defuse what had become quite an aggressive and disruptive trade relationship, which was costing the chinese economy, to be fair, as it was costing the united states, but in my calculus the chinese economy was coming off workers. I think it was basically to calm things for a little while, by some time, see what happens during the course of 2020, and revisit this whenever the phase two, such as it might have been, trade deal was due to come into effect. When the negotiations would start, which would have been much more fractious. As chinese see it i think way to buy time. I am just guessing here. They see the americans or the white house as basically wanting to do a deal to basically shore up the Domestic Support for the president. Washe knowledge that he kind of acting tough and talking tough and coming away with something that might have electoral advantage in 2020. Of course, this all predates that pandemic and Everything Else that has happened more recently, so it is a little bit academic now i think. Guy how do you see it developing are the chinese prepared to blow up the phase one deal . What would that actually look like . If they do not by the agricultural products, what happens . What happens if phase one disappears . I do not think they want to blow it up. They certainly do not want to be seen to be the spoilers of this, necessarily. Trumpthey want to give the kind of toy, as it were, to throw himself out of the pram with this decision they have announced today about imports. To keepthey would like on in the kind of unrealistic acceptance that there is an agreement in principle, but neither side are going to fulfill the terms. Of in a way, what kind i would assume they would keep on going with that unrealistic acceptance. The point is they do not want to be seen as the spoilers of this. They would much rather that if he wereuld say, to walk away from it, and it is not sure that he would, but if he did they would rather it were that way around, because then he would obviously, presumably, get the blame for walking away from that agreement. George, how should investors be pricing that in . If l like we finally got comfortable pricing in covid and reopening and that Economic Data. Now i do not know how we are where we are. Risk i thinkic iinly looks as though mean, i do not want to call this economic funkhe the chinese and the west have been in is in the process of bottoming out. Weve had export numbers from south korea, which is sometimes seen as a bit of a canary in the coal mine of world trade. We have seen export orders in the chinese pmis for may, which came out today, or over the weekend, which were not great, but a little bit more encouraging, which might suggest the export demand is bottoming out. Numbers the economic that anecdotally we seem to be seeing with the gradual, incremental relaxation of lockdowns does suggest that the summer it is not going to be we will have terrible we will have terrible gdp quarters numbers for this quarter, but the month by number numbers seem to be on the turn. There is a glimmer of Economic Optimism from an economic point of view. When markets greeted the announcement last friday with a little bit of relief, it is because perhaps they because it was not as bad as it could have been. They have not announced anything as awful as far as Financial Capital is concerned. Caused is is paused. Guy i have not figured out the venn diagram of hong kong, covid, how much overlap there is between all of that. Thank you for taking the time to join us. Oxford university finance center. Thank you. Coming up later, we will take you into orbit. Spacex making history as it successfully sends to asset two nasa astronauts into orbit. More on that new era of spaceflight. Thats next. This is bloomberg. Guy a huge weekend for the u. S. Space program. Space for the the First Time Since the u. S. Space shuttle. A huge moment and made even more special by the fact that the whole program was led by a woman, lynn shotwell. The bloomberg tech report is brought to you by comcast business. Learn how to take your business beyond fast. You say that customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. I am alix steel with guy johnson in london. This is Bloomberg Markets. I am excited to be here with you. I woke up at 5 00 today. I have been waking up in the middle of the night for years, so this is a very cool night morning for me. I dont miss it. I kind of did in the dark. No one is paying attention to you. It was nice to be a human again. I am looking forward to the journey. Lets check what is making headlines outside of the business world. The opec coalition is said to extension. The oil cartel will cut back for three months. The existing deal called the nigeria and the uae said that they will increase production month. Barrel prices are below what most countries need for government spending. Wuhan may have eradicated the coronavirus. Officials found no asymptomatic cases for the first time in nearly two months. Wuhan is a testing its entire population for the virus. Those who show no signs of being sick can still infect others. New york city will not recover from they coronavirus for six years according to a new study that ranks new york implement markets. New york has lost 8 of its finance jobs so far. There were more violent protests across the u. S. Thousands took to the streets in Peaceful Demonstrations against the killing of george floyd by police in minneapolis. That was overshadowed by violence from new york to los angeles. Several thousand National Guard troops have been deployed to help local police. Powered byrs a day, journalists and analysts in more than 100 countries, this is bloomberg. Alix thanks. Ways i had ae front row seat to those protests. We wanted to get into more about how the white house is responding. Kevin cirilli joins us now. What is the latest from the white house . President trump is set to have an a meeting with william barr around this hour ended to hold a teleconference call with governors and National Security officials and state representatives to discuss how to rein in this rash of violent protests that have engulfed the country. The president will later meet with Vice President mike pence this afternoon. Here in washington dc, the mayor enacted a curfew, joining mayors f