morning, it is without modern precedent. 25%man sachs adjusted unemployment rate for america. we will bounce back in a v-shaped form. another 2 million to 3 million jobless claims expected. without modern precedent, the disinflation of europe, the outright inflation of your -- switzerland. what is a european central bank or to do? ebrahim rahbari with us and moments. president trump finds dr. "unacceptable on children and the virus." the good doctor is hopefully humble. "surveillance," we are seeing glimmers of life in our cities but still difficult

pandemic data. primea recovering minister johnson. give us an update of the tension of the prime minister and his government with the people of london. francine: a couple of things broadly. he is recovering but does seem to be in better form. there are conspiracy theories that he did not get the virus, that are not verified. , a lot ofr you see conspiracy theories have come to the forefront which gives you a sense of the mood of the and finally the u.k. government say they trust one test two test antibodies. to test antibodies.

at least 5% of the population would have gotten covid so far. tom: this is so important, and featuring an article of a little bit evening forward in the medicine and moving -- a little bit forward in the medicine and therapy of this pandemic. ritika: president trump is publicly disagreeing with the infectious diseases chief, accusing him of wanting to play sides -- play all sides of the equation. he said that reopening the country too soon could lead to a coronavirus flareup and warned on the impact on students. president trump called that comment unacceptable. has seized the cell phone of richard byrd according ." hise los angeles times

office has denied any wrongdoing. boris johnson is facing more pressure of his handling of the coronavirus crisis. the chancellor of the exchequer warns the country faces a recession. johnson was criticized over the spread of the disease and care homes where over 800,000 people have died the international energy agency sees the oil , saying demandg is stronger than expected and demand rained and by a griddle n by atal -- reined i brutal price crash. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. gupta.tika this is bloomberg. tom: equities, bonds,

currencies, commodities, a little bit of a lift today. it gave way with a vengeance off the chairman's comments. green on the screen, a little bit of a move. yields come in and there has been curve flattening. gold up $10. francine: i would also note what gold is doing. pound, a bit of movement. european stocks are dropping and , em futures fluctuating gaining. tom: there have been a number of voices at the institutional level and one of those institutions is the united states government. >> you are going to see, this is going to be a pretty bad quarter but then we will recovery and have a sequence of better quarters.

our expectation is we will kill this virus and next year be back to having a great economy. >> the economic response has been timely and appropriately large. it may not be the final chapter given the path ahead is subject to significant downside risks. uncertainorecasts are in the best of times and the virus raises a new set of questions. mostcall him my mip, improved player. i think he has done a very good job. i disagree with him on one thing, negative rates. >> the committee's view on negative rates has not changed. this is not something we are looking at. tom: and there we are, the president managing the different voices that are out there. joining us now, ebrahim rahbari of citigroup.

really quite good on european dynamics. we will get to that in a moment. let me take the work of dana onerson and catherine mann the u.s. economy. we are seeing other shops make bold adjustments, mostly boulder -- mostly grim or in there u.s. call --er in there u.s. their u.s. call. ebrahim: we have incorporated forecast that the recession, unheard of for many decades, and the price to the u.s. as well, well they are less affected than other parts of the world including the eurozone, so the recession we forecast is very 10% declinear the we have for the eurozone this

year. tom: it is interesting to see. we are working on getting this banner up for you. this is an important statement from fox business news that president trump is looking at the chinese companies listed on the new york stock exchange and the nasdaq that is a -- nasdaq. that is a real change in the goingic of the president, after chinese investment within portfolios versus outside -- outright listings. we will have to follow that through the morning. that comes up to the tensions which you and catherine mann our expert on and let me fold that into global trade and what it means for the u.s. economy. do you still see a dampening of dampenings/imports, a

of world trade? ebrahim: absolutely. one of the implications of this past few years of globalization on the back foot, that will be reinforced. these u.s.-china tensions are one of the factors, but many economies learned from this crisis that having the capacity to produce onshore can be quite valuable, and that applies obviously to the health care actor but more broadly to range of strategic industries. we think global trade will for cyclical reasons. contractto significantly in inflation, but it will take a hit in these issues linked to supply chains tightening and re-shoring. francine: what kind of recovery

are you expecting? ofahim: we see signs activity is bottoming right around now. maybe mobility metrics, high-frequency metrics bottomed in countries outside of asia right in the first two weeks of april. that means with a broad brush, if you have a one third decline in gdp in q2, we should be expecting a significant rebound from these extreme low levels of activity as low as q3. let's call it with a broad brush around 25% or so. we think from then onward, the recovery will be slow and uneven for the next six to 12 months so even though we will see drops in the record levels of high unemployment, we will not be back to full employment in the ,.s. until maybe late next year certainly possibly beyond there.

we do think even though these are unusual circumstances, in the end it will look like a relatively conventional recession that is quite persistent in a few months from now. francine: do you think the fed will have to go into negative rates? ebrahim: no, i don't think so. we have done lots of work on negative rates over the years and two things that are clear is that locally, the view on negative rates has shifted and for all practical purposes, most central banks are lower bound. some are still a little more ambivalent like new zealand, but in the u.s. specifically, the view on negative rates has always been much more negative, partly for operational regions -- reasons, the state of the money market funds, etc., but also the concern of negative

sentiment is widespread. i was not surprised by chair powell pushing back strongly. that being said, from a market perspective it does not put this issue to bed entirely, partly because it does not rule out the option overall, but because long-term negative -- long-term market rates can be negative even if the fed policy rate isn't. for the shape of the curve, the argument is still very important. tom: this is very good, ebrahim rahbari. the president is speaking to his favorite television network, which is fine. we have ebrahim rahbari, one of the world's experts on dollar dynamics so we will come back and speak of a strong u.s. dollar that the president sees. in the 8:00 hour, an important update from michael wilson with morgan stanley.

this is bloomberg. ♪

♪ bloomberg "surveillance," good morning. what i want to do is what "surveillance" does best the president -- does best. the president with his favorite network, fox news. good morning to ebrahim rahbari, reacting to the president's statement of a strong dollar.

down the road from me 40 blocks at the plaza hotel there was a point where the dollar was too strong. are we anywhere near close to the distortions of a strong dollar that we saw in that 1980's decade? ,brahim: tom, i don't think so but you point to an interesting development. president trump has meaningfully shifted his tone on dollar strength over the last couple of weeks, and we think it is for a reason. we think in the past, he was able to point to record low unemployment and the record high stock market as projecting the performance of the u.s. economy and no longer has these, so now dollar strength is coming in useful for him, for the purposes of the upcoming campaign. that also changes investors' views of the u.s. dollar and

takes away the asymmetry and fear of u.s. policy intervention to weaken the dollar. that has allowed for some up side -- some upside in the trajectory of the u.s. dollar. tom: i will look at the work of m.i.t. and onto vice chairman fisher with a shout out to ken rogoff as well because things are different. back then when we had strong dollar it was within a fixed regime with more stickiness in the system. now it is everyone for themselves. are we better off now, are our viewers better off now with foreign currency exchange payers? brush, theth a broad answer is yes. exchange rates can be potentially shock absorbers and

at present, we are going there -- for a fundal mental fundamental shift on the emerging market. many economies and currencies that were managed quite carefully are being given a lot of room to adjust, partly ,ecause there are few levers which has meant sharp depreciation in emerging-market currencies. in london, people pay more attention to brazil, but the policy universe has discovered that the exchange rate can be very useful as a shock absorber. i don't expect any return to discovering that stability will be of higher value. within the g10, universe, the idea of competitive depreciation is still a concern.

we touched on deglobalization and u.s.-china trade tensions and there is a point it could enter into those issues. we used to talk about currency wars and in a tense climate, these issues are never far from the surface. francine: what do you do with euro? there is a lot of talk of lack of solidarity or euro bonds, or some countries may need a bailout at the end of this and want to break out from euro. ebrahim: intense interest in prospects for the eurozone and eurobonds among investors. downsideiew is the pressure on the exchange rate will persist but the disintegration risks remain contained despite the fact that we had the shock ruling from the germinal constitutional court -- german constitutional court. the perspective on the euro is

negative for three reasons. the combined monetary fiscal stimulus is significantly smaller than elsewhere, particularly on the fiscal side, somewhere around one third lower than the u.s. --wth is less likely to grow bounceback soon. we have political disintegration concerns in the north as well as in the south. mentioned theady new normal may be less open in that of mobilization and may hold back open economies like the eurozone. we do have concerns, but that being said we have a backstop, the ecb and that will prevent some of the worst fears on the eurozone. we think even though it won't be elegant, the german court ruling can be navigated. it is more in the direction of

the downside drift in the euro exchange rate rather than a sharp incline. -- decline. francine: ebrahim rahbari of citi. later on, we speak to narayana kocherlakota. he will have a thing or two to say about the dollar, at 2:30 p.m. new york, 7:30 p.m. london. this is bloomberg. ♪

ritika: this is bloomberg "surveillance." france says it is unacceptable that sanofi would give the u.s. priority if it develops a coronavirus vaccine, telling bloomberg the u.s. will likely be first in line because they financed the research. they are partnering with gsk. -- has filed for bankruptcy as part of a plan to raise cash for a u-verse -- u.s. government auction. almostbe able to collect $5 billion for giving up control of airways to be used for the new 5g mobile services. airbus is preparing for permanent job cut, warning labor unions in germany, france, and spain that it needs to rein in

production. the number of jobs to be cut has not been decided. the coronavirus has scaled -- killed demand for planes. this is what markets are doing right now, a bit of fluctuation on european stocks and u.s. futures. european stocks are still in the red. the focus will be on the jobless data in the u.s. treasuries are gaining with the up acrude oil ticking little bit from the drop yesterday. we were just speaking to ebrahim rahbari of citi, the dollar edging higher than most currencies. tom: about fluctuation, almost slighty, that is what it feels like in the equity market. but may be green

on the screen in 20 minutes, all based off the information flow out there now that is extraordinary. it is important that you stay with us to get a snapshot of how we are going to consume out of this pandemic. no one is better qualified than stephen sadove, always affiliated with saks fifth avenue. we will talk about this thing right now, let me cut to the chase, the death of the department store. , coming up.ve this is bloomberg. ♪

these days staying connected is more important than ever. so we're working 24/7 to maintain a reliable network, to meet your growing internet needs. we're helping customers who are experiencing financial difficulties stay connected. we're increasing internet speeds for low income families in our internet essentials program. and delivering self-install kits to your door. nos comprometemos a mantenerte conectado.

we're committed to keeping you connected. for more information on how you can stay connected, visit xfinity.com/prepare. everyone,morning, bloomberg "surveillance." in london and new york, we are looking at the economy, the

jobless claims number we will see here in two hours. the claims numbers will be extremely important. -- to lookress to do at what we do with 70% of our money in the economy, we consume. one of the landmarks for luxury goods is the department store and culturally, a huge deal, you harrodse elevators in and you have the statues and the egyptian motive, or maybe the escalators going down at bergdorf which are narrow and claustrophobic, or the wooden escalators at macy's. then there is the danger of saks fifth avenue. did withhen sadove saks fifth avenue as you would go down there wide, glorious escalators and there would be a

turning to the next escalator where steve sadove would get you to buy more stuff when you see what is on the floor. for many, he has invented modern saks fifthling at avenue and for the retail federation as well. the romance was great, saks fifth avenue, and all of your competitors. is it done? it isn: i don't know if done but it is certainly changing, and a different world for luxury and all retail. occurring that were before the pandemic are acceleration -- accelerating, and you will see more consolidations and bankruptcy, but you will see some survive. there is still the opportunity to thrive in this environment. tom: how will retail amend, given the new rules? stephen: they will have to look

at what they offer, the experience they offered to the consumer. the consumer has clearly moved to an omni-channel world and may not want to go into the store at the same time as other people so you are doing curbside a cup, hourur -- pick up, off shopping. they want to be catered to and want that chanel or louis vuitton product but they want it on their own terms, and the retailers have to understand how to meet those terms. francine: how much of luxury items are bought online, and will that trend accelerate significantly? stephen: it is clearly accelerating. you are seeing the marketplaces, brands going online. brands are creating their own stores.

gucci, they are probably 80% their own stores at this point and online role become a great part of the experience. , 50 --market and saks neiman marcus and saks, 50% of their business is online. francine: we are not impartial to luxury but we are oversaturated with companies. will some have to go bust? stephen: i say that about all retail. in the u.s., you have three to four times per capita the retail you have in europe and there will have to be collaboration. you see the bankruptcy at neiman marcus, j. crew, jcpenney is on the verge. leverage is not the friend of anybody in a pandemic like this. path of every the

purchase, and you are world-famous, how we actually go about doing a purchase. we see an item in a magazine and decide to buy it, and there is a whole emotional process. can jeff bezos expert at that process? can amazon learn the way that we acquire the acquisition items we want to acquire? stephen: i think they already are. amazon is doing a remarkable job of tracking the consumer and understanding them, looking at their marketplace, what is selling and not selling, and creating the amazon basics. how you track that consumer behavior and appeal to them is changing. it used to be national television advertising or media print and now it is social media, analytics, artificial

intelligence. media has changed -- retail has changed, not just in the luxury sector. you will see people marketplaces . you will see marketplaces emerge at luxury, they are may not be amazon, but others at play. those competing beneath the surface, is there enough wiggle room in the workout process of leases, what they pay for rent, to allow them to survive? stephen: it is a great question. bankruptcy will allow renegotiation of leases and closing of stores. the real question is do you have a business model, a reason for being that is different enough that will allow you to survive

in the future? companies come out of bankruptcy and go into bankruptcy again because they have not fundamentally changed the model. the jury is out as to whether or not there model will be serve -- their model will be surviving. they might be better served consolidating or liquidating going away, but i'm not convinced all of these will be, let's close a few stores, renegotiate rents, and it will be business as usual. tom: let us continue with stephen sadove, the chairman of saks fifth avenue. our first word news in new york city. ritika: a remarkable split between president trump and the infectious diseases chief. says reopening too soon could cause a run a virus

outbreak and warrants on -- coronavirus outbreak and warns on reopening the schools. the economys warns will be gloomier than once thought, raising the unemployment rate from 15% to 25%. by the end of the year, they say the jobless rate still be around 10%. coronavirus may have led to a a virus in children. similar cases have been reported in new york and the u.k. coronavirus,n the reporting the fewest cases in weeks. graduallykel has been

lifting restrictions. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. francine: coming up on "the open," the cisco chief executive chuck robbins. he will be asked about the brave new world we live in. this is bloomberg. ♪

♪ this is bloomberg "surveillance." we are having a great conversation about luxury retail in general was steve

officerchief executive and former national retail federation chair. when you look at the changing behavior of consumer, be it will chinese, european, they be affected if there luxury mid-level?ers at the stephen: the high-end luxury consumer will be there whether it is in china or the u.s.. they have been beaten down, slowed down during the pandemic. in china, you are seeing them come back, not at the same levels as before, but you are seeing growth and recovery. you have not seen the travel and retail part of the market. that part of the business still has not recovered, but you are

seeing more online behavior in china. you are seeing the stores come back, in the 25% to 50% decline range but accelerating back, and i think that is a precursor to what you will see in the u.s. francine: is the u.s. usually the leading indicator to what happens elsewhere or do you have to look at the chinese market? stephen: right now you have to look at the chinese market, largely because the pandemic hit china before the u.s. in general, the u.s. and china are important markets, the two largest luxury consumer markets in the world. , is thee issue is aspirational luxury consumer has been hit harder than the high-end luxury consumer, so i would watch that in both market, but i do see recovery. the problem is you are tracking

at substantially lower levels. the companies that have good balance sheets are able to withstand this. where you have an issue is the highly leveraged companies and that goes back to the vendors. you are seeing stress on the supply chains as well. whati am fascinated by lvmh or any other american party would do with a retail member, talking about tiffany's folks. what would be your advice to lvmh to enhance but not screwup thisert -- consolidation? stephen: i have no doubt they will do a great job with tiffany. presence,s great u.s. strength in china, but lvmh has a strong distribution network

and they are good at the good, better, best of retail. priceg the entry-level and taking it all the way to the high-end, and what they can do in the chinese market with tiffany, and improve the luxury credentials of tiffany beyond silver, into the higher level of luxury. i think they can bring back to the tiffany brand. stored america over right now, and in the next 12 months what would you predict? stephen: it is massively over stored and you will see a massive amount of change. brick-and-mortar retail, restaurants, across the spectrum of retail. if you look at regular apparel type retail which is tracking

down 50% or so, you will see lots of store closures, rents coming down, pop-up stores, think about the amount of inventory sitting in the system. in the great recession we had 25% decline in volume, you had a pop up in the gilt. we now have 50% decline and you formatve new luxury where they have pop-ups, new clearance stores, more pop-ups of the world,jx's more product going to be used season. closures is going to happen because you do not have the volume to support the fixed cost base. ,rancine: thank you so much steve sadove, joining us this

morning. up next, jason farley, johns hopkins professor of nursing. coming up next. this is bloomberg. ♪

♪ ritika: this is bloomberg "surveillance." police wanted to assess whether tesla is healthng with local regulations. musk said he would reopen the factory. cisco came out with a better-than-expected forecast. demand has increased for the network equipment, yet the fourth-quarter revenue is likely to fall for percent from a year ago. ago. from a year has fallenrlines before pre-covid lows.

that is your bloomberg business flash. tom: thank you so much. perchance on a glorious spring day walk down madison avenue in new york city, you will walk by the guggenheim pavilion of the mount sinai hospital, and always in every case outside in the street is a staff in green war fatigues relaxing for just a moment while they fight this pandemic. it is no different in baltimore at the johns hopkins university and professor of nursing, jason farley joins us now from jhu. i want to ask a delicate question about how we carry this virus. i find it stunning how the nurses and staff of mount sinai are so relaxed after being in

that mill you. ieu.ill should we be that relaxed walking around? jason: you are seeing professionals who like a soldier who can relax between battles, health care worker can relax between battles. cann't think the public take a sense of lack of urgency in our response, and by that urgency i mean continuing to be safer at home, continuing to social distance. by no means are we out of this war. tom: beautifully said, so with that there is this huge pension between the lock down, stay at home. the wisconsin legislation we hours,en in the last 24 how do you perceive the gray area between a strict lockdown stay-at-home, and getting back

to normal? jason: you characterized it infectly, this sense of gray which everyone is opening up in slightly different ways across the country, across the world, and we need to pay close attention and be vigilant to how that opening up and our change in behavior, quite frankly our --rease in social and fiscal physical distancing will impact new cases. we anticipate it will impact new cases and yet there are some painful decisions that have to be made, the recession comment preventing -- the recession, preventing depression. saving businesses. it is a delicate balance being able to open up and expand the economic environment while being vigilant to prevent ongoing transmission.

francine: can we guesstimate how many people so far have had covid and how many are immune? jason: the immune question is a very hard one at this point. investigators across the world are really struggling, coming to grips with whether immunity will occur as a result of infection. for some people, we believe it will but we are seeing cases of relapse, reinfection if you will. what is important to understand in these patients if they have a suppose it relapse, where they tested negative and repeatedly negative for the virus and became convalescent, which means they recovered, and we can find antibodies, and we follow them over time to see if reinfection occurs.

we are launching a study in june to do that, to follow people at least 12 months, a cohort of patients to see what the prevalence of the virus is in the 12 month period, particularly if we were to or godnce a second forbid third wave of this. we are trying to understand the potential for infection, what immunity occurs, and the potential to understand about this growing concern of a second wave. francine: are countries working together to figure this out, or is it everyone for themselves? jason: i think much of the global community is working together. unfortunately, i believe from a u.s. perspective, we have opted out of that local community in many ways, not only the letter

from the white house about multiple responses from other countries, specifically china, but also the global vaccine initiative that the u.s. has decided we will go it alone and not participate in several of the global vaccine initiatives, which is very nearsighted on our part. we have our first trial starting in the u.s. very soon, johns hopkins specifically in june. in a few weeks we will have our first vaccine trials going. in addition, multiple vaccine candidates, so not just one vaccine. while the rest of the world is moving ahead, and we know oxford , we have seen the initiatives take off, so i think we are being nearsighted in the u.s. response in not participating in global efforts. francine: thank you so much,

jason farley of johns hopkins. go --e to check out vr s ,go. -- david rubenstein is speaking with eric schmidt to see what he is doing to limit economic fallout in new york. your markets looking forward to understanding a little bit better the unemployment figures in the u.s. this is bloomberg. ♪

♪ alix: oil production collapses.

the iea says output outside of opec is cratering. and major players warned of overvaluation's, and fed chair jay powell gives a gloomy assessment of the future, warming a solvency crisis could emerge without more help. and what comes next for venture capital? we will sit down with greg croft -- with greycroft's cofounder and chairman emeritus. welcome to "bloomberg daybreak" on this thursday, may 14. u.s. equity futures tried to take on risk early in the session. now they are slipping into negative territory. we had the worst two day selloff for u.s. equities since the end of april. you are seeing yields move lower here in the u.s. by about four basis points. the dollar outperforming the g10 space. the