let's 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. let's get a look at what this means for the u.s. economy. giving us that assessment is that she's shot -- is ashish shah. from goldman sachs. let's 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 v-shaped 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 forward-looking. 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 near-term 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 v-shaped recovery, but the equity market forward-looking 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 longer-term 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: let's 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 they've 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. medium-sized 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? investment-grade and high-yield 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. let's 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. that's 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 presidential 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 tit-for-tat is a way of exploiting weaknesses in one another's 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 won't. 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. we've 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 pmi's 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. that's 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. let's talk data. only xfinity mobile lets you switch up your wireless data whenever. i accept! 5g - everybody's talking about it. how do i get it? everyone gets 5g with our new data options at no extra cost. that's 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 that's 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 don't 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. let's 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 from across the country who took similar action. the protests at times over the weekend grew incredibly intense with clashes between protesters and secret service agents and graffiti markings and fires burning in the lafayette square park, very close to the white house. many historical monuments on the national mall including the lincoln memorial, the steps of the famous address from the i have a dream speech by martin luther king, graffiti marks there this morning. alix: thank you. what is happening with the pandemic and people losing their jobs, mckenzie had a report that said the american -- african-american community has been hit hard. mike, we can say it has to do with race but at the end of the day, this is an income inequality issue. a income inequality is starkly defined by race especially in this country. this all comes at a bad time for the overall u.s. economy. 40 million are unemployed or bored just and employed. a lot of incomes have disappeared at this point and it comes at a point when city and states -- cities and states are in financial straits. now you have a whole list of major chains that have closed down because they are afraid of what is going on. that has to impacts. when you look at stores like apple, target, walmart, not only doesn't mean that spending will be lower and we will have a slower economic benefit from the reopening, but people work at those places and they will not be on the job as long as they are closed or damaged and broken . they will be struggling. you mentioned the black-white divide. it is stark when you look at unemployment rates. we had in february the lowest african-american unemployment rate that we have ever had since they started measuring it and with the white unemployment rate was low as well. both shot up but the black unemployment rate is higher by three percentage points than the white rate. bore --ople to have this happen on top of that increases the income inequality that we have seen in the country, measured by the standard around the world. it has been going up for decades. it does not show any signs of going down. we had hoped the economy we saw in february would start to make a difference. jay powell talked about that a lot, suggesting we are finally seeing benefits reach the poorest pockets of the country. the coefficient has some may -- problems with it. it does not tell us much about the real wealth gap between the top and the bottom. hign the fed will think about. the fed has done a lot to stabilize the markets. it has done a lot that will make the rich people richer. by simply saving the financial markets they have helped out the portion of richer the population while the poorest populations are getting poorer. do think the fed is thinking about this thing -- sort of thing? >> absolutely. the problem for the fed is the same problem the ecb has. they have one tool -- interest rates. when they do qe, it is to move interest rates. interest rates being lowered does not do any help if you do not have money to spend. hot,tting the economy run more people get jobs. money to spend. there are a little helpless in this regard. they help everybody by keeping financial markets open. you don't want to the atm not to dispense cash, but beyond that this is not something they can really affect. guy: we will leave it there. mike mckee, thank you very much. what will we talk about next? it is a huge day for the u.k. at least for parents and children. the u.k. easing its lockdown rule and some primary schools are reopening today. parents are asking, is it safe to send your child back into the classroom? we will speak to dr. john bradley, the rady children's hospital director of infectious diseases. a specialist in pediatrics. he will give us his take on whether the u.k. is moving too quickly. this is bloomberg. ♪ ♪ from london i am guy johnson alix steel over in new york. is bloomberg markets. some english schoolchildren have returned it to classrooms today for the first time in more than two months. only three age groups have been allowed back in what is a crucial element of boris johnson's plan to ease the countries restrictions. many parents will be anxious about the decision. some experts warn the process is moving into quickly. it joining us now, dr. john bradley, medical director of infectious to bees is -- diseases at rady children's hospital. bradley, thank you for taking the time to join us here. i am a parent that has just sent one of my children back to school today. one question many are asking in the u.k., certainly parents and move?rs, is this a good is this a safe move? is the u.k. moving too quickly in your mind? dr. bradley: those are several good questions. i think things will not be safe until the vaccine is out, but there is not a huge risk to sending children back at this tested, a child can be if they become symptomatic after going back to school and there is contact tracing to and out all of the children that child has been in contact with so they can be isolated. so the rate of infection in , forren, as you know whatever reason, is lower than in adults. we do not understand this. it could be that children have such a mild disease that they are never tested. the rates that are published is suggested that there is not widespread infection in children, so that if schools open, the risk of an infected child, even one who has virtually no symptoms is in a classroom is fairly small. not going to have a meaningful impact on the are number. number. that this be followed up with more children going back? r? would this impacts the the rate of infection needs to stay below one. it needs to stay below one to go back. is this something that could be onled out to more widely or a wider age group asis? -- basis? dr. bradley: we have virtually no information on children especially in a classroom asis, so it is an unknown. basis so it is an unknown. i have wonderful colleagues in england. any child who goes back to a classroom and becomes infected should be identified because pcr testing for an active infection is widely available. determined in this grand experiment in england that we are all watching carefully from the u.s. to see if spread through the classroom with restrictions that i know some of your schools will be having, whether the spread will be significant or whether there will be no spread. they are all in bubbles. if one child comes down with symptoms, the bubble bursts. all of those children are then isolated while that child is tested. the longer-term question i think a lot of people are trying to figure out is what is the impact --longer-term health that outcomes as a result of what is happening here? isit better to focus on what happening here in the short-term and make sure the r stays low? what do we need to worry about with longer term health outcomes? this could impact our children's ability to make money. that could impact long-term health. dr. bradley: a great question. i want to differentiate the issues, the social issues and developmental issues from acute infection and what we call morbidity and mortality, how many people get sick. children get -- do very well with this infection. if there is infection in the classroom, it will probably be mild. it will probably be picked up early, but those children who pick it up in the classroom will ring up back to their parents it grandparents -- bring back to their parents and grandparents. the children are sort of the tip of the iceberg. i am not so worried about the children. i am much more worried about their parents and grandparents and others with serious underlying diseases that they come in contact with. for parents whose kids are going to school now today, any symptoms, any respiratory symptoms -- sore throat, headache, fever -- they need to take their children to get tested immediately, even with mild symptoms because children tend not to have serious disease and kids will be playing as though nothing is wrong but they will have symptoms. parents need to be vigilant and take their kids in for testing. course iselopment of important and we all in the world at this point believe that saving lives of grandparents is worth holding off on the social development of kids who we believe will catch up once the restrictions are lifted and children can get back to normal environments for learning, promotion of health. the equation is the risk to the elderly. me, idr. bradley, for have a five-year-old daughter at home. u.s. schools have not reopened. as we look to the u.k., what is the lag time? when will we know if what they are doing is working for us and we should try it? dr. bradley: i am looking exactly like you are, alix. the incubation. it depends on how close you are to someone and how much virus you get on you. with children, assuming you turn your head, they will be playing with each other and hugging each other, and sharing food, which they should not be doing, that kind of behavior will lead to increased spread of virus and that is what we are looking for. for your five-year-old, who is going toschool, we are look at the situations and they u.k. where virus has a spread, u.k. where-- in the virus has spread into learn from that. we are putting together policies for our schools, which should september. august, the experiment is happening in england right now. alix: i wish my daughter was at school. anecdotally, i was hearing about private schools considering reopening where they have 12 kids in a classroom, to teachers. they are basically in a pod -- two teachers. they are basically in a pod. private schools -- public schools want to be able to do that. as that trickles down into how kids learn, how much money everyone has -- dr. bradley: you have identified social issues that i as an infectious disease doctor have very little control over. the better the social distancing, the farther the distance between desks, the more partitions you can place, the less contact, the less sharing of food that kids usually do, the less the virus will have a chance to spread. we expect that in school situations where there is less put into distancing, there is a greater risk of spread. and i wish that were not so, but you are absolutely right. again, for the kids, they will do ok. in the united states, we do have the ability to test, if a child is symptomatic and -- in virtually every corner of the country right now. early testing with tracing by public health officials is going to be the key whether your child goes to a community school or a private school. to be vigilant and it take their kids to a health care practitioner for any symptoms. they are in these bubbles. if one of them get sick, the bubble bursts, they get tested, they find out what is happening. i went through my son's timetable this morning. every other line was "wash your hands." is that still the best thing we can do to protect our children? what can be done in schools to ensure we limit the spread of the virus at the schools? they will be put into pods, it will be socially distanced. what can be done in your mind that tele--- parents can do to help protect them? dr. bradley: washing hands is certainly good. etiquette,"" cough and "sneeze etiquette" where you contain your excretions, that cannot be done for children. you can tell the children to do anything, but you are fooling yourself that the children will actually follow social distancing guidelines that we have in place for adults. that is why we worry. children are children. we can ask for them to do all of the measures we have the adults do and they just -- their minds or somewhere else. they just won't follow through. they're not being bad, they just forget. the distance between the desks and the farther you can get -- six feetet -- three to and plexiglas partitions -- if kids get infectious secretions on their hands and touch surfaces, both washing their hands and having school personnel wipe down services so if there are infectious secretions on a toy or a pencil that is shared or pen or downter, if it is wipes with wipes that will kill the virus, then that will also limit transmission. great to catch up with you. i don't feel like that is an optimistic view for us as parents but thanks a lot. this is blumberg. ♪ ♪ bloomberg business, there could be a change in perceptions in severe cases of the coronavirus. remdesivir showed only limited benefits and a large trial last month. was authorized for emergency use. about 700 workers will start returning to offices in the u.k., u.s., and india next month. most are traitors and those who cannot work from home. and those who cannot work from home. is gettinghe trader outsourced. outsourcing companies are getting tapped to buy and sell financial assets. big names include state street. some are using them as backup in case their own traders get sick with coronavirus. alix: thanks. coming up in the next hour, i am interested in how these riots play out across the u.s.. living in brooklyn, have a reopening recovery worsened by these riots. i think it is a fascinating story. the kind of then diagram, the overlaps between what is happening with the racial riots and what is happening with covid-19 will be a huge story that will ultimately be written about. marketsgo through the angle as well. this is bloomberg. >> we bring you special coverage of all the implications here on bloomberg. ♪ ♪ >> live from new york i am alix steel joined by guy johnson in london. this is bloomberg markets the european close. i am excited for the new schedule change. guy: it's fantastic. we are resetting the show. we will do a lot of new things. what we will see now is what is happening with the financial markets because what we are seeing is markets -- i think they are basically determined to ignore basically all the bad news out there. the s&p is up by 3/10 of 1%. it was better and it is an improvement, but it is still a negative number. we have horrible unemployment numbers coming out. , as the u.k. economy reopens anti-lockdown restrictions get easier, up high 1.13 percent and the bull market -- germany

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