Two or three hours ago. The vix comes in from 44 to 41. There is a whole idea of an expanding pandemic all the throughout multiple geographies. There is optimism with Research Houses reaffirming some form of vshaped recovery. It is the oddest monday i can remember. Francine it is a pretty odd monday, although i have to say i have had other odd mondays. Thats get to first word news with ritika gupta. Economyin china the keeps inching its way out of the coronavirus, less industrial output rose 4. 4 percent in may from a year earlier. At missed estimates, and consumer demand is sluggish. Retail sales declined more than expected. So did fixed asset investments. The white house top economic advisers rejecting a more cautious outlook for the economy. Larry kudlow says the chancellor will be the chance will be for a vshaped recovery. He told cnn the Unemployment Rate will fall and 2021 will be another solid year. Kudlow also said the 600 a week on his payments made some americans will end july 31. A cautionary message about the economy to congress this week. He will be on capitol hill tomorrow and wednesday. He is expected to echo the mostly downbeat assessment gained last week. The white house criticized Jerome Powell for being overly negative. British Prime MinisterBoris Johnson is encouraging consumers to shop with confidence. Stores reopen in england today, and johnson says coronavirus restrictions requiring people to stay roughly six feet apart could be relaxed. Ofllor of the extra the exchequer says there could be a cut in sales tax. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, ritika gupta. This is bloomberg. Francine . Tom . The first thing i did this morning was look at dow futures, down almost 1000 points, and they are doing much at her now. Spx is negative, 56ish. In 500ish, i will call it. Nothing like what we saw over the last two hours. Francine im looking at european stocks. They are sinking to a three week low. Same for u. S. Futures. We are off the days lows. There is evidence of a second virus wave, a continuation of the first wave, whatever you want to call it, and that is hurting hopes that we will see quick economic recovery. It could change quickly, but i am looking at treasuries rallying, pushing the 10year. 68. To sentiment is also souring in havens such as yen, 107. 3 zero. Joining us now is peter dixon. Great to have you on the program. Even the rally we have seen, where we do will be due a correction anyway . Peter i think many people have said, and i agree with them, running of the stocks in the past two or three months probably was getting ahead of itself. Boost think a correction is necessary. Some profit taking appears to be a rational response. The question is, what do we do from here . I maintain my view that there really is not any other option other than to invest in equities for the simple reason that the only asset class is generating given Interest Rates on the floor, across large part of the industrialized world. Francine what does that mean, that your investment basis is dont fight the fed he echo dont fight the fed . Helen yes yes, and the economy looks pretty grim for the foreseeable future, but that does not mean to say necessarily that equities necessarily will have to remain on the floor. The risk offer a rally, primarily i think it is looking a lube it further ahead as you expect to see looking a little bit further ahead as you expect earnings to be week across to be weak across the next quarters. Tom peter dixon, tom keene in new york. I was thunderstruck this weekend after shops were reaffirming some form of a vshaped recovery. If you have optimism on equities, what kind of equities do you buy right now, given a reaffirmation of the better than good recovery he ech . Peter i think the likes of retailers, even the airlines, warren buffett, those kinds took the biggest hit during the downturn. About whend story everyone else is fearful, i would not be quite so positive myself about this vshaped recovery. I think it is going to be a slower hold, and accordingly, i am going to stick with the likes of more defensive opportunities. Some of the tech stocks did particular well during the downturn, primarily because they will remain in demand as the economy gets back on its feet or reaffirms slowly. Tom what do european dividends do . It is a stereotype they have a lesser dividend growth, a growth rate of the dividend, but they also pay a high yield. What does that dynamic to forward . Dividends for the foreseeable future are going to be depressed. I think it is a consequence the earnings yields on european equities are going to remain fairly modest. And i think that equities will probably underperform visavis the united states. But also dont forget, here in europe, longterm Interest Rates are lower than they are in the u. S. Accordingly, that is a logic for continuing to over way europe and equities. Thecine it seems that economic recovery in europe could be harder, certainly in countries other than the u. S. , and a lot of it appears a lot of it depends on the European Commission plan which still has to be voted on. Peter no doubt, the european economy is going to be a tough one. Countries like germany i think there are signs that we are starting to normalize a little bit, shall we say. I am hopeful that the second half of the year, germany would do ok. But italy, which took a real pasting with the consequences of covid19 and also has a measure of weaknesses, certainly will struggle to get back on his feet quickly. You are dead right, the commissions economic plan will be crucial. Fortunately it will take quite some time before that comes to fruition because there is a lot of opposition. Even though i think ultimately this opposition will be on the cuff, nonetheless there will be horsetrading between now and the end of the year before that is brought to fruition. The economies most badly hit in europe will probably not get the support they would like. Francine thank you so much, peter dixon stays with us. Up next, we talk with jim awake with gilles moec. This is bloomberg. Tom good morning, everyone. Bloomberg surveillance. Very interesting monday, Research Reports out on recovery. Interesting news flow, including a reopening with london and the united kingdom. We will have more on that across all of surveillance and also markets that are not doing that well. A decline in futures. They come back a little bit with the vix. The 40 level on the vix is just what it is. Peter dixon with us right now. One of your great charms is the idea of economics linked to equities, and all of that is wrapped around the pernicious feeling of negative Interest Rates across europe. That makes dividends look very attractive as well. Do you suggest that the negative Interest Rate regime will continue, and with that, it just puts a bid under equities out forever . Need tos long as we look ahead, youre right. When it comes to the euro zone, there is no sign that it should go withng or able to the Interest Rate strategy. The lack of earnings opportunities elsewhere, it does support equities. The question i get for other Central Banks is do they want to go down this same path . I would argue they dont because re are lots of negatives negative strategies associated with negative rates. As a consequence, you might find that you open up a pandoras box, which causes more harm than is perhaps for seen at this point. The ecb is committed other Central Banks, i would definitely not go there. Commerzbank the measurement of the urge to merge . It is clearly evident in the united states. Is there in a mentality of roll up right now among european large capitalized corporations . Peter we are seeing that here because first of all the economic environment was slightly different even going into the locked down so, needs were really thinking about crosscutting rather than merging. I think that process has been accelerated as a consequence of the experience in the last few months. Companies i think are in survival mode. Some of the longterm future plans will be put on ice as they figure out how to get through the remainder of this year and perhaps through the first half of 2021. I do not see a wave coming our way of mergers, coming our anytime soon. Francine do you see companies having to go bust either through the administration and because of the economy, or has there been enough support in the u. K. And europe to make sure that this is avoided for Healthy Companies . Has i think that there we will avoid a wave of bankruptcies. That have large cash reserves should just about do ok. There earnings will not look great, but i think they probably survive in a recently wrote in a reasonably robust state. Companies with high debt levels, have no cash, which have excessive cost will struggle. Bear in mind that also the wave of globalization, which has supported Many Companies over the past two decades that is another problem for many of the smaller companies. You soe peter, thank much for your time. Peter dixon, commerzbank level equities. And we will have more exclusive reporting next. This is bloomberg. Francine this is bloomberg surveillance. Carlos ghosn has always said he has always been set up, and there may be evidence that support his claim. Bloomberg has learned there may have been a campaign that hime is a campaign against that started last year. Thank you so much for joining us. There is a great piece, and i know many months of investigation went through into this. Give us a sense of what this actually means. Does it show that there was a methodical campaign to remove the powerful executive from office, or does it actually also say through our reporting that he was not guilty as charged . There are two separate issues. One is, where the motivations of killing off a possible merger an intensive merger romo forissan and moving against carlos ghosn, or where there also allegations of financial impropriety that the tokyo prosecutors came forward with. These emails, documents, and interviews with people who were very close to what happened suggests that there was a campaign to dethrone carlos ghosn that went well before the actual charges were leveled against him in late 2018. So they show some forethought about if they were able to could alter, they the relationship between nissan and renault in a favorable way to nissan. That has always been conjecture, now we seem to have some documentary evidence that shows that it partially backs up Carlos Ghosns claimed that he was set up. Francine carlos ghosn also says he was innocent before charges of financial this financial charges and breach of trust. Do we know anything about that . The financial charges are out there. Ghosn escaped japan last year. He is in lebanon and the japanese are trying to extradite him. Unless carlos ghosn comes back trial,n and there is a it is very difficult to know what the legal conclusion will be to that side of it. So this article is really more internallyolitics that were going on well before those charges came in, and inform kind of our understanding of how this all came into play in 2018. The things that permeates our reporting is the idea that the people of nissan that left this trail of emails and innuendos, etc. , ive all left or have all changed jobs. Present management of nissan want . Brian they are trying to simultaneously fix a very broken alliance with renault. Obviously this whole ghosn melodrama did a lot of damage to the alliance. At the same time, like every other carmaker, they are trying to do with the pandemic and the shock, the demand shock that has hit the auto industry. Tom continue, continue. Ryan i think brian i think they would like to put this behind them. But there are a couple of problems. Trial ofe is still a another man who was arrested with carlos ghosn in 2018. And a lot of this will be coming out in a courtroom, and then you still have the ongoing extradition efforts by the japanese government to get carlos ghosn back to japan. Tom what is the relationship of nissan to the japanese government, the federal government, and this of the of tokyo . I am absolutely fascinated by the behavior and the culture between the Government Entities and the corporate entity. Are they, frankly, one and the same . N if you go brian if you go back to the 1950s and the 1960s when you have the industrial combination, it worked very closely with the government in the postwar decades. Obviously nissan is a National Champion in the auto industry, and went through a very difficult period in the 1990s and came very close to bankruptcy. We have not uncovered any evidence that the government was actively involved working with nissan executives to remove ghosn and realter this relationship with renault. We do not have any evidence that that took place. What i think it is safe to say that there are probably some people in the government that want nissan to be a healthy, strong company, and, you know, support efforts to move it forward. What will be the longerterm implications of bloombergs reporting . Have we had any insight into this being something that has happened before . There are ank couple of things. First of all, if you are a nissan shareholder, i think this raises some concerns and questions. Nissan stock has gone down 50 since carlos ghosn was arrested. So i think there is going to be some consternation among shareholders about what was really going on here. Why all the machiavelli and maneuvering and such . I think there are some very hard questions that will probably be directed at management. During the great kelly trial, which is going to be taking place later this year, it will be interesting to see if this comes up, whether in a courtroom setting i think that will be another opportunity. Tom we have got to leave it there. Brian brammer, thank you so much that brian bremner, take you so much. They are, David Rubenstein on a conversation about vaccine. This is bloomberg. 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. Francine tom, we are looking at life actors of oxford street, one of the biggest we are looking at huge cues this are starting shops to reopen across england for the First Time Since the lockdown yesterday. We had a pretty impassioned Prime Minister, Boris Johnson, encouraging consumers to we had a number of chief executives also come on surveillance early on. If you are shopping in retail, and lot of the stores are open but the changing rooms are not. The social distancing still remains in place, although if you look at some of the cues, maybe they are not adhering to the realistically. The reopening of retail with life pictures out of london. Lets get to first word news in new york city with ritika gupta. Found and moscow court four former u. S. Marine core wetlands guilty of that core wayland of spying. He says he is innocent and was set up by a Russian Security officer who owed him money. Chairman Jerome Powell will deliver a cautionary message about the economy to congress this week. He will be on capitol hill tomorrow and wednesday come expected to echo mostly downbeat assessment he gave last week after policymakers held Interest Rates near zero. He what has criticize him for being overly negative. Questions arose about president Trumps Health over the weekend, theto twitter that the tweeted handrail was very slippery. He turned 74 yesterday. He was the oldest u. S. President to be sworn in for a first term. In atlanta, prosecutors will decide whether to bring charges against the Police Officer who shot and killed a black man. His killing outside a wendys lead to a new wave of protests against police brutality. The official autopsy said he died from two gunshot wounds to his back. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries, im ritika gupta. This is bloomberg. Thecine lets go to reopening of the economy and what kind of recovery we will see. Thank you so much, as always, for joining us. When you look at the probability of the v shape but also the number of infections rising in certain u. S. States and china, are you Still Holding onto the hope that a recovery could come pretty quickly . It is still my baseline. There is all this reluctance in most governments to resume the conditions that we have in march and april. Oruess there is some i would add that in europe at least there is still no sign that things re thaterating, and that things are accelerating. Much opean countries made much further in curbing the virus. So there is more volatility than probably expected a few weeks ago. But key is whether we have a high probability of return, and i dont see this as a potential baseline. As you look forward tom as you look forward into july and the end of this odd year, do you assume that centralbank action, particularly in europe, leads to asset price inflation, and that the money and the effort goes into stocks, bonds, currencies, commodities, that it is asset prices that move and nothing else . On this this i am quite cautious. It is wrong to say that Central Banks are essentially turning into a very nice boost to asset prices without any actual impact on the ground. It is massive and efficient. With what the Central Banks are doing, we could not have the sort of fiscal stimulus