And across this nation, particularly those of home, alling at different home, all different shades. My major message today is the crosscurrents that we the of where welysis are this middle of june. Of where we are this middle of june. The bar for the good news gets higher. That has been the big debate the big debate we cant choose one or the other. We know a lot more than we did when this first hit. I think the spikes we are going to deal with down the road here, we are going to be better prepared for them. Weve got the population operating in a much more safe fashion than when this first hit. I believe weve got a lot of companies putting a lot of energy into how to operate a business with a pandemic, and i wouldnt underestimate capitalists figuring that out. Weve got scientists working for treatments that can reduce the death rate before a vaccine is discovered. Theall, we kind of nowhere primary death rate is among older and compromised individuals that we can put a big ring around. Weve got greater hospital and medical supply capacity. I think we are better equipped to handle additional spikes, which tells me that the restart going toic activity is continue, and i think its going to continue to provide comforting information when we see unemployment continue to come down, when we see job creation come back, when we see i think if it is headed in that direction, we are in a new expansion and a new bull market. Question to johns point earlier, how much have this has already been baked in, and now we are just waiting for confirmation to come in. Point to the filing this morning that said they are looking to raise 500 million in new equity, even of a file for bankruptcy, based on the enthusiasm of what we are hearing. There does seem to be in optimism that already is priced in. How much more upside can there possibly be . That is what this correction is a little bit about, too. Not checking sentiment the , we are giving them a taste of the other side of the market. I think that builds buying power again, and it rebuilds some valuation. On the s p 500 right now, the price to the average earnings, the future expected earnings, thats probably under 22 times earnings. That is high, but what is interesting to me is it is not much different than it was after the recession of in the early 90s, or after the recession in the early 2000s, like 2002, or in late 2009 after the recession in 2008. When weve had recessions and we start a new expansion, it has popped up every time to about where we are today and even though it is very high, each of those high points in the past have been excellent buying opportunities. I think this one will become a too. I think a year from now, the market will be higher and earnings will also come back in probably go up faster than the stock market. I dont think we are going to keep going up at the same pace we have been, i think its going to be more choppy and not as fast, but i still think we started a new expansion and if we have, i think we are early yet in this bull market. Youve got to believe, as you pointed out, that we get positive earnings revisions in the months and quarters to come. Were you expecting to see them broad based on a particular sector versus another . I think its going to be broadbased. Part of the positive earning a business is just how low we taken them overall. You combine how low weve taken them with the amount of policy push we now have behind things, i think the next big item coming up for the stock market will be, you are going to see the wall street starting to revise upwards the oneyear forward earnings estimates. There is a lot of good signals of that. If you look at the economic surprise index which has gone from almost record lows to record highs, thats a pretty good indicator of better earning estimates coming. You look at the industrial Commodity Prices which have finally picked up, that has typically been a good indicator. You look at junk credit spreads tighten, that has been a good indicator of better Profit Growth coming in overall. Ad then you just imagine what 20 plus money supply growth , what a Mortgage Rates this low is going to do. I think we are Going Forward the rest of this year wall street revising up what earnings might do. They will start going higher and i think that will help the stock market. Forgive me because we are pushed for time, but some People Struggle with the idea that you can still use highyield spreads as an indicator of anything. The Federal Reserve has got involved in the market. Why is that still useful for anything . Why is that a decent measure of the fundamentals in any way at all in the united dates . Think every recession weve had, there has been involvement of government officials into the economy and into the markets. Weve had greater deficit spending, faster money supply, a drop in the fed funds rate in every recession weve had. As we progress forward since the 80s on, those interventions have become greater and greater. I agree, today is greater than ever. But the action of intervening is no different in past recessions. We might not have bought junk bonds directly, but we were buying other bonds that affected junk credits. Im not sure the signals are all that different from the past. On the other side is that big debate that is raging right now. Then tactic to catch up with you. I can sell you that she would have been sitting there going yes, yes, and raring to get in on that highyield question. The value of the traditional signals that you get from some of these Asset Classes and the degree to which they have eroded because of the feds involvement now. Thespecially because Federal Reserve is propping up prices but not necessarily preventing bankruptcies. Another bankruptcy from a gym chain, another from a u. S. Shale producer. There is a question about what point that affects the cost of borrowing when the fed is not willing to step in. We will talk fixed income next. That is coming up next on this program. From new york this morning, this is bloomberg surveillance. A moscow court found former u. S. Marine corps guilty of spying and sentenced him to 16 years in prison. He says he is innocent and was set up by a Russian Security officer who owed him money. Moscow says he was caught redhanded with a computer flash drive complaining containing classified information. Top economicses adviser is rejecting a more cautious outlook for the economy. They kudlow says Unemployment Rate will fall in 2021 will be another solid year. He also says 600 per week Business Payments will end as scheduled on july 31. He said that was the incentive for the unemployed to return to work. British Prime MinisterBoris Johnson is encouraging consumers to shop with confidence. Stores reopened in england today and johnson says that coronavirus restrictions requiring people to stay six feet can be relaxed. Be a cut, there could in sales taxes. Singapore will is coronavirus restrictions this week. Most activities will be allowed to resume subject to safe distance and protocols and more social gatherings can take place. Global news 24 hours per day on air and on quick take by bloomberg powered by more than 2500 journalists in more than 125 countries. This is bloomberg. Unemployment, the numbers arent particularly reliable because they dont include Migrant Workers who basically are approximately about a fit of Migrant Workers still have not come back to work yet, which means that even though the Unemployment Rate drops from 6 to 5. 9 in may, the actual rate of unemployment is probably closer to 15 to 20 . Thehe challenge against Economic Data and the bigger challenge, reading the data in china. With that Unemployment Rate which he says could be close to 15 to 20 . Good morning to all. Getting you in shape for the market open this monday morning. One hour away with equity futures still heading lower, down by 63 points. That diminished Risk Appetite are flatter. Ies your 10 year yield down four basis points, to 0. 66 . Yields copping out and rolling over ever since. Rolling over, and you got to watch every takedown as well. Played George Magnus there. Things to the team forgetting that up and running quickly because it leads perfectly into her conversation from hong kong, mixing the economy with the culture of china as well. , theeijing news this week virus, it is one story. The Economic Data in china, lets go roughly halfway between beijing and hong kong, and that can be what does the economy of nanjing look like right now . The economy looks still quite and the concern for the Global Economy is that china was meant to be the one to lead us out of this but even though the has advanced, the consumer is still pretty wary, Consumer Spending is recovering but it is not back to where it was or where some think it should be. Positives, andme the dow is all pointing in the right direction, but the big takeaway from china whether it is there is a recovery happening, but it is not necessarily a vshaped recovery. Widely held at the moment that the Barbara Boxer downs is much higher than it was and the ability to deal with increased infections is much better than several months ago. How is that belief playing out in china right now . We are going to find out over the coming days, because weve had a big scare in beijing. Last i checked they were talking about 100 new cases originating in wholesale food markets, a lot of the press are saying it seems important seven, they will have to see how that plays out. System, china has already enforced the lockdown the run beijing city, and it will be critical to see now whether these numbers do continue to increase at a fairly hefty rate or if the authorities turn it down and say they have a grip on it. Author of the past few months, the big concern with china and globally was that china was first in, first out, but will it have a second wave . Thats why Global Investors and everybody else will be watching beijing like hawks over the coming days. And there is a question of what the political appetite is for a full lockdown, and then there is the question of Consumer Behavior and how much consumers will just avoid going out to eat or public spaces as a result of getting worried about getting sick or possibly being hospitalized and nine. Im just wondering what were seeing in terms of people going out and existing in a similar manner as they have in the past in china right now. Again, very fair question. We are seeing an improvement across the board on the retail section. Restaurants and hotels have seen a big uptick in business, we are seeing Consumer Staples rebound. The munication equipment had a good month of growth in may. We also saw car sales pick up the first year on year increase since last july, and that was mostly housed by government subsidies and cosmetic sales was another standard that jumped 13 . Curvek it cost the retail , they are starting to spend more, but companies are still fragile in the big takeaway is, when you get news like that out of beijing with another scare on the virus, thats only going to give consumers more wary, keep them at home more, and push shopping to online. I think the retail part of the story still needs a few more months of a better story before it can fully recover. And while we have you on the line, i think what is so important is the protest agenda for hong kong. Could there be a protest agenda or a protest schedule forward . Things remain quite tense here in hong kong, on the political front we are waiting for this national law to see what specific details of that are. Of course, we have to see how the u. S. Will respond and if they retaliate. Building toward a couple of key anniversaries, and as we head into the local elections in september, all the indications are that protesters are still there, it is just being disrupted by a mixture of the virus, the big hole in the economy at the moment, and of course, the police have become much more proactive and aggressive in terms of their arrest of those gatherings. We the tension remains, dont know how its going to play out but it is probably much too soon to say it has completely dissipated. And the to hong kong mainland and china, fantastic to catch up with you as always. Thanks for staying on. Futures down at 62, up by a little more than 2 . That increase in infections in beijing. More importantly, how the authorities handled it. If we get an increase in infections, it will lead to another shutdown, they will handle it differently and it will hurt Economic Growth in quite the same way. That is the reader across that will be tested in the weeks to come. Is no question about it. With china, it is an observable thing. Morning, as the latin america and the caribbean at 47 of global death. Its not just in china, on a global basis, there is some tangible stresses this morning with pandemic. Guy couldnt agree more. Not as full as where things were just a couple of weeks ago. And im wondering how this is going to affect consumer sentiment, especially in places like arizona or florida or texas that are seeing these resurgences now and might not have had until now the political will to take a more serious crackdown. Ay the market open around few minutes away. Down around about 60 points. Downork city, counting it for the opening bell with equities lower, the bond market bid ahead of chairman powell tomorrow in front of the senate and wednesday in front of the house. A stacked week ahead with the fed in focus, several Central Bank Decisions in the mix, too. This is bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Jonathan jonathan from new york city for audience worldwide, this is bloomberg surveillance. , imside tom keene Jonathan Ferro together with Lisa Abramowicz. One hour away from the opening bell in new york. U. S. Retail sales coming up tomorrow. Empire manufacturing numbers the previous read outside of 500, in equity markets, s p futures 60 points and down 1. 9 . Treasury yields lower. Certainly u. S. Retail sales update focus 24 hours out. Tom i agree totally. This is a huge report. It is great talking with you. You always have great insights. Now are finding right if you look at the Mastercard Spending data in the recovery retail online has doubled during the pandemic. It has gone from 11 of sales to 21 of sales. Amazon is one of eight beneficiaries. Look at target. Look at walmart. The consumer has gravitated towards almost all of the Major Players that have invested in the technology to be able to provide a great experience online, with not just online delivered to the home, it is also the by online, pick up curbside, and things like that. Tom ok. Steve, this is so important. Let me take one example. Let me take one example. If Lisa Abramowicz is working the ootd from saks fifth avenue and looking in address usually 1500, now 1800. Why did she go back to dropping on fifth avenue . Why didshe get it 24 she go back to shopping on fifth avenue. Probably go back to the relationship. If you buy a Louis Vuitton handbag, it will probably be the same price online or in store. The price will not be the issue on that item. On the discounted end of season merchandise, youll be able to figure out where you want to buy it. Some people, even with the mastercard data saying 21 is data saying 21 is online, that mean 70 is still in the store. People still like to experience products. They still like that interaction with the associate. Clearly they have to feel safe. Right now we are in an environment where the consumer be to feel safe enough to able to go into the store. That is evolving as stores open. As you open up, there is a pentup demand to get out into the store and you are seeing improvement in the trends. The outdoor malls are picking up faster. People are more comfortable in an outdoor environment than they are inside a big shopping mall. Like a coalsstores like a coalsr or a target or walmart, like a kohls or a target or walmart, people feel more comfortable. Lisa if i were going to try on address, i would want to go to a at a physical location. There is a question of how much of the existing store space would have to close to meet the fact that i will probably buy online at some point, but i may go to the store. Store. How much more do you expect in terms of store closures . Stephen it is a lot. We are in a reset period. There 1200 malls in the united states, i think a third of the mako way. May go away. In so a lotll kick of these malls will go away. If you look at madison avenue soho in new york, you have huge vacancies, you will see a reset system. Jonathan we have been saying that for years. Sorry to jump in. We have been saying that forever. Avenue avenue, lexington , all of these storefronts that have been shut down forever waiting for the rents to come down, why hasnt it happened and why will it happen now . Have notthe landlords lowered the rents because they have obligations to their lenders relative to the valuations. I think that what is going to happen is a lot of these guys will go under. You will see restaurants going under, you will see new players coming in. There will be restaurants, but there may be a new ownership structure. In some of these stores, if you have 20 of the business or 30 of the business going online, you do not have the volume per not have the volume per square fo