Different tone. The tone to me this morning, jon, is fascinating. The crosscurrents in the market, i can honestly say, in a zillion years, i have never seen how odd it is right now with the pandemic news, and of course some of that, china and beijing, wrapped around the reaffirmation of wall street, for some form of vshaped recovery. I was thunderstruck over the weekend, some of the optimism coming out of wall street houses. Jon we will talk about that later in the program. A fresh outbreak in beijing very much the focus this morning, the disappointing data as well. The data does not validate the exuberance we saw in the market as we saw in the month of june. Lisa that is the problem, that demand is not picking up. Even though we are seeing manufacturing pickup and production online, we will see perhaps production the consumer is not buying it. Junell be getting the u. S. Manufacturing press and we will take a look at what else in the day ahead we are also going to be hearing with from dallas fed president Robert Kaplan. This date is fastening. Investmentef invasiv officer is going to be proposing a new strategy to increase risk, to invest more in private debt, private credit, and increase leverage to as much as 20 of assets because it is so difficult to meet a bogey of 7 in a no yield world. This is an example of what all pensions across the world are going to be facing as Government Bond yields head to zero in an era of financial repression. Jon and lisa, not just a problem for the fund managers, but tom, a problem for the broadly, you are forced to take on more risk to get returns. This is a raging debate. We brought it up with gilles moec about an hour ago, actually assumption actuarial assumption that is supposed to be out there. What Lisa Abramowicz just said, it is striking folks as a 20 average overlay on pension assets. That is not in the textbooks, that is all there is to it. Jon we need to rewrite those textbooks. Good morning to you all. Equity futures down hard, off by 65 points on the s p 500, off by 2. 2 . I am pleased we can start this morning with al ruskin of deutsche bank. Youvshaped hedge fake focused on that. Talk to us about it. Al it is going to be in good shape in terms of a v in june. I think the data could be extraordinary. Just in the same way as when you twoin reverse from an open lockdowns. I think initially in june, the data will look good, or the data for june will look good. In august, that factor will be normalized as such and will be back into a year that is unfortunately where living in a world somewhere between lockdown and open. Some sort of halfway story. And the new normal is nothing like the old normal. Tom if that is the case, how do you express it across assets . You are an international strategist, and we can look at equities, bonds, currencies, commodities. What is the Productive Play given your ambivalence about a strong vshaped recovery . Get i think you cannot ahead of yourself. People say we could trade this may be on a three, sixmonth view. It is difficult to do. You have to focus maybe on one week ahead, two weeks ahead, which is tough for longerterm asset managers. It is easier for the Leverage Fund guys. In general you have to say it felt like a week ago it was really gone, right now it does not look great. And you effectively have got to play in a much more defensive mode. Not only are you thinking in terms of ok, because of the v shape in june, it is going to be risk on for the next six months, for example. I think that v will be help for for risk in the next month or two, but it will not terribly be helpful for risk three to six months out. Lisa looking across wall street houses, you are getting some pretty bullish calls. He comes on the heels of expectations for some fiscal stimulus. Yet over the weekend we heard from larry kudlow, chief Economic Advisor to president trump, that he expects Unemployment Benefits to expire next month as planned. Do you buy that . Do you think it will have a material negative impact on the potential recovery in the u. S. . Alan the answer to the last part of the question is absolutely. I think what you are seeing is that when you look at the breakdown of gdp, the big plus is really on the government minus taxation side. The physical piece of it, which is building the bridge effectively from lockdown to open and Everything Else is looking extremely weak. Consumption not too bad. Income from the government side is very helpful, but employment is so bad, and precautionary savings are kicking in, so consumption is not looking good. On the investment side, commercial real estate will get walloped. On the export side, you have a global sacred iced depressed that global synchronized depressed a global synchronized depressed i wouldnt say recovery. The government will have to keep kicking in with i would not say i think it is in both parties interests to do that. Whether you can get republicans and democrats to come together with a Bigger Program is going to be tough because they do seem to be quite far apart. Jon at the moment what we hear again and again is the following phrase policy fatigue. I do not see that, i just see the composition of the policy effort changing, and i wonder if they just get it wrong. Is that what you are focused on . Alan not so much, jon. I think it is less fatigued than they have done a remarkable job in front loading policy easing both on the fiscal side you cannot keep up that level of momentum and you have to look and hope that actually you are, as i mentioned earlier, building this bridge. When this all started, i felt that if the virus was going to depressing growth longer than three months, the fiscal policy and of things would not be sufficient to build that bridge. They have done so much effectively that i think now we can cope with a virus extending three to six months, and maybe even toward year end, really. But it does need some of those elements. It does need the rollover benefits. That is going to be crucial. There are certain elementary pieces that are going to be brought. Your dollar call. You have to put up with George Saravelos my deepest sympathies on that what is the rush right now . Needed. Sympathies over time i think the dollar will weaken. It is subject to three main forces in the shortterm, all about risk on, risk off really. The dollar does better on risko. Thean term, it is whether the dollar does better on risk on. The big one will be the current account, where the dollar really goes down hard or not. Thank you so much. Tom keene, why are you trying to cause trouble in each and every central bank in the Research Department . Tom i am just trying to spread the hate around everywhere i can. My chart of the year two years ago come on between deficits lets be clear, those vectors pandemic, before the before the economic shock that we have seen. It will be fascinating to see where the summation of the fiscal deficit as a percentage of gdp and the trade deficit as a percentage of gdp. It is a mystery. Jon i agree with you and that is the phone that is the focus of the research over the past three weeks led by alan ruskin. The alphabet soup at the moment is driving me insane, and i will tell you why. The vshaped recovery being pushed by some governments feels like a Marketing Tool. Ask for the forecast. When you get the forecast on things like unemployment, they are not out of sync with the federal reserve. The administration is looking for something around 9, 10 at the end of the year. That by definition is not a vshaped recovery in any way, shape, or form. When people start to use that term, it becomes a Marketing Tool, and a Marketing Tool for policymakers right now that i dont really like. A marketingot only tool. I think it was led more with the bank of england with the shocked call that we had on vshaped when mr. Bailey stepped out. Over the weekend, i was flabbergasted by the number of wall street houses reaffirming optimism. It is going to be one of the great calls of the year if they get that right. As mr. Ruskin said, if june is better than good, and maybe it carries forward into fourth of july and the early fall. That would be something. It was the tone over the weekend from many shops. Shops isof those morgan stanley. We will be checking up with the chief economist over there on that vshaped hope. In this market, hope rose a little bit. Equity futures down 62 on the s p 500. Down 6 on the s p 500. Later this hour on china, the pandemic of the Economic Data, George Magness of the university of oxford china center. The Research Associate joining us later. From new york this morning, good morning. Alongside tom keene and Lisa Abramowicz, this is bloomberg surveillance. Moscow called for paul whalen, called guilty and sentenced him to 16 years in prison. He said he was set up by a Russian Security officer who owed him money. Moscow says he was caught redhanded with a flash drive with secret information. And a more cautious outlook for the economy, larry kudlow says there will be a chance for a vshaped economy. 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 to some unemployed americans would end as scheduled july 31. He said that would event a disaffected or the a disincentive for the unemployed to return to work. China industrial output rose 4. 4 in may but that missed estimates. Retail sales declined more than expected, and so did fixed asset investment. British Prime MinisterBoris Johnson is encouraging consumers to shop with confidence. Shops reopen in england today. And johnson says the requirement to stay roughly six feet apart could be relaxed. Chancellor of the exchequer said it could be a cut in sales taxes. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in im than 120 countries, rich. This is bloomberg. I thought the chairman was a little morose when he give those statements because actually the forecasts were pretty good for 2021. In fact, they wanted unemployment probably dropping 24 by year end. Reassuret should people in business. Kudlow, National Economic council director, speaking to fox news from new york this morning. Alongside tom keene, i am Jonathan Ferro. This is bloomberg surveillance. With equity futures rolling over, down 68 points on the s p 500, we are down but down 2. 26 . The biggest weekly loss going on the way back to march 20. As we start to get to some downside risk, a little bit more of a move lower in the equity market. It sharpens the focus again on the next policy move down in washington. Tom it really does. We can see a real shift, backtoback weeks of challenges. We spoke to fred keller of the pennsylvania 12 district here. He made clear they are watching the opening of the rural pennsylvania down to state college. There is a Small College there in state as well. The tensions that we see on this monday, jon, i think are extraordinary. Joining us now, our chief washington correspondent, Kevin Cirilli. There are moments when all the politics and all the discussion is pushed aside by the president s health. That came up yesterday after observations as he spoke at west point to the graduating class. Kevin, for me it hearkened back to the second term of Ronald Reagan, where there were repeated bouts what i found fascinating is they are pretty much the same age, and i thought Ronald Reagan was extremely open cancers andrious noncancers that he had. Is the president being open about the quality of his health . Kevin the president would say yes. The president and his doctors have released public forms and whatnot saying that he has not had the coronavirus. But i think it could speak to a broader issue over the weekend with the president speaking at west point, just another illustration of how the administration is trying to turn the corner from the conversation of last week and the week before relating to some of the divides between secretary esper and president trump. Jon how on earth has this become the topic of the moment . A gentleman in his mid70s going down a ramp without a handrail. I challenge anyone in their mid70s to go down a ramp without a handrail. Are there bigger issues in the then puttingow that video on repeat again and again . Kevin i think it is a good point, in the sense that this is now, with the president hitting back on the campaign trail, going to essentially two sets of conventions in the next couple of weeks. All of this is something that i think republicans, quite frankly, they want to have this debate because they want to say that they are on the inside of reopening the economy. That said, there are those concerns about there being a second wave of the virus. The president is about to head out on the campaign trail. He wants to get back by his reelection campaign, back to some type of normal schedule. I will just say that i hope there was a sidebyside of tom keene and Jonathan Ferro talking about the walking down the ramp, and jons face as he received that information and how to go with it. The other burning issue of the weekend other than walking down the ramp, which is what we heard out of larry kudlow, the chief Economic Advisor to president trump, that they were not going to ria the enhanced Unemployment Benefits. I really think this is pivotal for markets. Extension oft of these benefits. The argument being that it disincentivizes people to go back to work. What is on the table in terms of continuing some of the Unemployment Benefits that have been enhanced with that in mind . Kevin three things. First and foremost, im not entirely sure that every republican in congress is going to get on board with Larry Kudlows comments from over the weekend. I think there is a large appetite for there to be another round of stimulus, project early in suburban districts and more moderate districts, swing districts. Republicans even representing those. Think back to the salt debate of the state and local tax deduction. That coalition of republicans, even new york republicans, i think will be very wary of not passing some sort of Unemployment Benefits. It is a broader conversation about how the reality of the virus is different at different parts of the country. Where states have reopened and where covid19 fortunately has not been that detrimental from a health perspective, that is where you are seeing that conversation. Again, the third point i would make your, i still think we are going to get another round of stimulus, late july, early august. The im interested in second week of june, or the first week of june. Time is flying. What is Kevin Cirilli going to look for this week in washington . I mean, it is sort of into the summer. Summer starts may 30. Is this about the tragedy of atlanta and the followthrough of that . Is it about fiscal stimulus . What will you focus on most, kevin . It is economic stimulus. More geopolitically speaking, as conversations from an International Trade per step give trade perspective start will see more conversations about how the administration is going to work with u. K. , for example. I will that trade deal come to fruition, from a more international perspective, everyone with the reopening, trying to get to some type of normalcy amid this, and the economic pressure is palpable. Cirilli in washington. Always great to get your thoughts on the program. Here are the issues i have right now in saying that these enhanced Unemployment Benefits disincentivize work. How on earth can you take the huge upside to price for the payrolls report, do a victory lap, and then say there was a disincentive to return to work when quite clearly, if you believe those numbers, they are inaccurate reflection of the recovery and this economy, then you have no evidence to back that up . I put that to larry kudlow two fridays ago and he accepted that. So i want to understand why that has changed in the last week or so. No question about that. I think the roll of these benefits, and france and and francine mentioned the same issue in the united kingdom. There are three tranches of benefits that go away. My basic take is people want to get back to work, period, and i know in new york it is palpable in new york to look for a reopening much like what they are having in london this morning. Jon i would agree with you. Lisa, this is the issue for me. It is not fatigue, the lack of willingness to do more, is what do you do next, the composition the effort we should be focused on the next few weeks. Lisa i agree. I also think this speaks to the election cycle, and that is going to be an increasing focus, with the voters are looking for. Come, equity futures down 58 on the s p 500, down 1. 9 . We take the focus to china next come on a fresh outbreak in beijing. Economic data overnight. That is next from new york. Good morning. This is bloomberg surveillance. Jon from new york city, this is bloomberg surveillance. We are live on bloomberg tv and radio. I am Jonathan Ferro with tom keene lisa abramovitz. Two hours away from the opening 61 onequity futures down the s p 500. We are up by 2 . We take more weight off the s p 500 after a loss. The s p getting battered. Small caps underperforming by even more than that. We touch on that later in the program. Foreignexchange, Risk Appetite, roads away dementias once again this morning. The swissie on top. A stronger swiss franc on the bottom, underperforming. The aussie dollar reflecting that diminished Risk Appe