credible to believe that a long-term solution to the problems we are facing can be achieved by moving interest rates. >> economic forecasts are hazardous at best, even more so now. >> the uncertainty associated with the pandemic is not likely to go away. >> this is "bloomberg keene,lance," with tom jonathan ferro, and lisa abramowicz. jonathan: good morning. this is "bloomberg surveillance ." we are live on bloomberg tv and radio. what a morning to start this simulcast, with equity futures higher this tuesday. tom: no question about it. dow 25,000. that is something so many have doubted. a significant bull just republished and reaffirmed

equity prices higher, and the linkage to this economy and how bad it is has never been wider apart. futures higher this morning. interest rates are up as well. lower at thelds front end, and a big bid for what is happening in germany. we will talk about that a little bit later in the program. lisa, it is a rally across the continent and europe, too. lisa: particularly in italy, where you see yields come in further than in germany. tomorrow, the european commission will officially propose that 500 alien euro plan of a rescue financing. very interesting to see what type of back and concessions have been put in there. also, thursday, the national people's congress of china will be voting on that controversial national security law for hong kong. also on thursday, the initial u.s. jobless claims. i am watching how much we see

that number come down, how much these jobs become permanent losses at a time of reopening we are seeing right now. jonathan: more ugly data expected through the week, and a ton of feds because well. withn start this program torsten slok, chief economist over it deutsche bank. we've just had a tough weekend in the united states. many pictures of many states getting back to normal quite quickly. does the fate of the global economy still depend on getting a vaccine? torsten: absolutely. if we do get a vaccine, it would change everything. it would change the health outlook, the outlook for markets, the outlook for the global economy. unfortunately, it still looks like that is not the case, so for now, we are back to watching the reopening, watching the fundamentals. it is definitely getting better, a slow crawl out. we are at the bottom of the canyon, looking up, but it looks

quickly like the news of dataning and the economic getting better is something the market should be paying attention to. jonathan: many countries already have gone through the reopening experience, several weeks or several months ahead of what we are seeing in the united states. what have you learned so far about that experience? countries number of in europe have already reopened. we had a lot of the data, including some daily data on credit cards and bank data, that has shown that the consumers are probably a little more willing to go out and consume that i would've expected. so this health consideration we whatebating all the time, does that mean for the generations that are going to stay home for longer? what does it mean for younger generations who might lose out

on lot of jobs? we should also see that in some of the data coming out this week , most importantly, perhaps, and the confidence data showing some signs of rebounding. tom: deutsche bank has really greatness -- with grayness on gdp. are you willing to start nudging the gdp back from the precipice? torsten: no, we are still very gloomy. there are many comparisons when you think about the outlook. we are definitely more gloomy than the consensus. looking bettery than just a few weeks ago, but there's a lot of reasons to be worried why this is going to be a weak recovery, and we do not

expect by any means a v-shaped recovery. we do expect it will take some time because of all of the health issues and associated things that come along with buying things, so we are still in the gloomy camp, but that is not an argument for saying that markets should be trading differently from where they are. going to take quite some time before we get back to where we were. lisa: perhaps one reason why markets are trading where they are is because of the fiscal response we have seen around the world. you tabulated it $9 trillion. what has been the most effective fiscal rescue so far? torsten: this is a really good question. when you think about the design of the fiscal passages -- the fiscal packages, they have differed quite dramatically. the u.s. has overseen things that would go directly to gdp,

most important income of the $1200 checks sent directly to households. that has a different effect on gdp relative to loan guarantees. i may guarantee a loan for someone, but if they default, that will have zero impact on gdp. u.s. has the package that has the biggest impact on haslar gdp, whereas europe loan guarantee and wage compensation schemes that basically, consumers, households, or companies may never jump into. from that perspective, from a gdp forecasting angle, it is quite important with the physical design is -- what the fiscal package design is. jonathan: one approach helps gdp

in the short term. does the other allow for a more durable, sustainable recovery once we start to reopen? torsten: exactly. i completely agree with that. sending a check of $1200 to everyone will be very helpful here and now, and certainly help fill up some of the holes we have in terms of lost revenue and income. but further out, if the unemployment rate has gone up a lot more in the u.s. than in europe, you would expect begin to to eventually look better in europe than they u.s., because the unemployment rate did not go up as much. some parts of the fiscal solution in the u.s. basically gave a huge jolt immediately, whereas the european solution may be more helpful in the medium-term, more like three, four, five quarters out.

we welcome all of our bloomberg radio and television worldwide -- [indiscernible] i have really been sequestered. my observation on the upper west side -- [indiscernible] -- open. do you wonder -- [indiscernible] -- what's going to happen next? jonathan: i think the big issue for me was seeing how quickly things reopened and how quickly people got to normal. i was surprised by that. you've reopened certain places in certain states, and they were packed. i wonder if that is the conversation we start this week, whether we have underestimated just how people will respond to reopening. that outside these places we live in like new york city, that a lot of people will get back to

normal pretty quickly. tom: we will have to see about that. the markets are just extraordinary here. dowt 25,000 this quickly -- 25,000 this quickly? remarkable. jonathan: absolutely remarkable. let's talk about what this market is looking for. over the weekend, we saw so many places absolutely packed. underpinning any forecast, it is a pretty firm assumption about how people respond to the reopening and months to come. what is your base case, torsten? torsten: absolutely. one important factor is to look at the high-frequency data. you are seeing more people doing restaurant bookings around the country. this is also happening globally, not only u.s. the opentable data has certainly shown that we are lifting.

we are roughly 60% down from where we were in february, and that may sound like a lot, but there is still quite an improvement to where we were just a few weeks ago. similarly, we have seen daily data from people flying around the country that has also been going up. you also see in some of the drug prescriptions data, you've also seen a rebound and improvement, that people are beginning to go more to their local pharmacies to pick up their prescription drugs rather than getting it through the mail or online. -- we are trying to figure out the speed and whether u-shaped or a l-shaped like we have been talking about. we all agree this will probably be weak, but some of the data is improving a little bit faster than we would've expected. the high-frequency data is really the only way to assess

knowing forward whether the speed will be slow or fast. quick, there are estimates that of the 21 million jobs lost in march and april, about half are not coming back. does that equation change if the reopening is successful? torsten: that becomes really important because the argument, and what a number of academics impressivelywith quickly, is this is not only an issue of us not going as much to restaurants and flying and doing the things we might do for health reasons. there's also an underlying reallocation of labor going on, where you see some industries suffer more job losses because if there is more social distancing, you might have simply less of a need for employment in a number of sectors in the economy. that reallocation might be

playing a very important role here that is just going to take time to reallocate those workers that may not come back to restaurants, to social distancing occupations. we could see growth rates elsewhere in the economy to him but seat for significant job loss. this reallocation is a bit of an unknown, but at this point, we do worry that the global newlocation because of health implications might have an effect over coming quarters, and might imply that job growth is going to be somewhat weaker for quite some time. jonathan: torsten slok of deutsche bank, always fantastic to catch up with you. send our best to the team. this market, up 56 points on the s&p 500, higher by one point 9%. a little later this morning, nelson griggs of the nasdaq, the president, joins us.

good morning to you all. this is "bloomberg surveillance ," live on bloomberg tv and bloomberg radio. ♪ ritika: i'm ritika gupta. in hong kong, chief carrie lam newdefended beijing's sweeping national security laws. she promised that hong kong's freedoms would be preserved. details of the deal remain unclear. ban subversion. a british government minister has quit in protest over the controversy involving prime minister boris johnson's top advisor. dominic cummings has refused to resign over accusations that he broke the government's lockdown rules. global news 24 hours a day, on air and on quicktake by

bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

♪ >> the tools to punish beijing

are very limited. my concern is that by withdrawing special statuses, all you do is punish hong kong and drive the hong kong economy more into the hands of the mainland. medeiros there. in the equity market, higher by 55 points on the f tempe 500 -- on the s&p 500. risk price action as appetite improves, the bond market pricing and higher yields. treasury yields up three basis year. to 0.68% on the 10 a weaker dollar against em and g10, against the bulk of the majors this morning. cable up by around 1%. in the commodity market, wti with a $34 handle this morning, up 2.6%.

$34.10. tom:tom: brent crude out over $36. posen modeling out a new, stronger euro perhaps. we see the idea of hong kong really not playing big in the pages of "the washington post closed and "the new york times post" and washington "the new york times." with decades of experience in hong kong, our rishaad salamat joins us now. how big were protests over the weekend? come -- they were big they were small compared to what we saw last year, but certainly ones we have seen in months. we got pro-democracy groups calling for general strike.

nationalis on the security law coming out of beijing. tomorrow is carrie lam's birthday, and there are calls from her democracy people to celebrate that, so protests are planned near the legislative on a bill thatg would criminalize any disrespect of the chinese national anthem. police have been set out in anticipation of protests. there have been barricades near the legislature and government offices, and right next door to them, the people's liberation army garrison building. it is relatively calm right now, the calm before the storm, you could say. jonathan: what would it take to

change the behavior of beijing? does beijing chair if washington resends -- does beijing care if washington rescinds the special status of hong kong? rishaad: it depends how the u.s. deals with it, ultimately. hurt not just beijing, but also hong kong. hurt hong kong, so how do they navigate this? how do you actually, at the same time, not hurt u.s. and not hurt the interest of hong kong, and at the same time maintain that special treatment? the debate in washington appears to be about the approach to individual businesses involved in containing hong kong's autonomy.

[indiscernible] requires the secretary of state to say whether hong kong continues to warrant special treatment. they could say it is just the same as any other chinese city. lisa: let's talk about that. how much economically it would hurt china if hong kong were to lose its special trading status. are we already seen businesses move out of hong kong to other regions, reducing the economic importance of hong kong to china? rishaad: there has certainly been some evidence of that. desks of people who have that have already set up in covid-19, dot with you want to go to singapore

right now? we are waiting for more details on all this has well because this legislation may have poured fire on the american relationship, but we don't know very much about it. the details are very vague at the moment. we don't have any flesh to put on the bones, but it is just the sheer principle be brutal -- principle people are worried about. so-calledxpanded his entities list. it is not about the people they are targeting. for the chinese, it is -- perhaps trying to maintain jurisdiction. height ofunced at the

the trade war last year a similar bid, but never what was on it. they say that apple and qualcomm could be targeted here. jonathan: you know how this works for a dictator. whenever there is economic pain, they start to hide behind nationalism. we heard this this morning. what does he mean when he says that the military should strengthen troop training and war preparations? rishaad: he's never going to say it is anything to do with the relationship with china. it could have more to do with what has been happening in taiwan. look at it from the prism of the taiwanese president, who was inaugurated last week. mike pompeo congratulated her. that is something that really

fired the ire of beijing because they never recognized taiwan as an independent state. to taiwane a message rather than to washington. herehas made many pundits actually looking at it. tom: thank you so much. greatly appreciate it. i was amazed how it really didn't make the play this historic news for hong kong, but i thought it was really underplayed over the memorial day by the american press. jonathan: let's be clear, i think it is underplayed this morning. it is just not shaking the market. as always, the price action on mornings like this morning shapes the narrative area i think the tension in hong kong israel tension that we need to pay attention to, even if the market is not. tom: no question about it. i am watching renminbi, a little weaker as well, but it is more

about the politics. 1.8%han: we are higher by on the s&p 500. up, james athey of aberdeen on this tuesday market rally. this is bloomberg. ♪

♪ from new york city, this is "bloomberg surveillance ." we are live on bloomberg tv and radio. -- with tomne keene, i'm jonathan ferro, along with lisa abramowicz. nicelyon the s&p 500, through 3000, up by 1.8%. the correlation is pretty much in line with what you would expect to see as risk appetite improves. a weaker dollar, stronger euro. lower, higher yield. weaker, whichnc is one of those indicators, and gold ebbing away, still above $7,900. $1700.-- above

what do they call this three day weekend in england? england is off today, right? jonathan: we had a nice long weekend into monday. we don't get the tuesday off as well. traditionally, the first monday of may and the final monday of may, everyone gets a bank holiday. tom: we should do that in america, no question about it. recalibrate, folks, with our investment. james athey is with us right now from aberdeen standard as he recalibrate's as well. what have you adjusted within your view, given this past two to doubt0 -- this path dow he 5000 -- this path to 25,000? james: i am constantly adjusting

to how thetion equity market can be in the face of negative economic information, which is ultimately going to be negative earnings information for the equity market. thatnk it is fair to say the sentiment boost from central-bank action in general at the fed specifically was way bigger than anything i expected could happen at a time where we were seeing such traumatic socks globally to economies. equitygot the u.s. market 10% off its all-time highs. i new central banks could be powerful, but i didn't really think they could be as powerful in the face of truly negative economic outcomes, so i guess that is certainly something which has taken me by surprise. from this point forward, i think it is going to be quite difficult for there to be meaningful negative information for the market because it seems

to be looking beyond this traumatic decline in whatever kind of recovery we get, looking beyond that into a more normal looking future. that really can't be disproven for quite some time, so it could well be the case that this sort of market, which looks a little more risk favorable, could be with us for a bit more. jonathan: it is classic tom keene that your first answer has to be to name the second long weekend in may in the united kingdom. i will do my best to keep it focused on the markets. was market objective functioning. quite clearly, they have gone way beyond just market functioning. what is it now? what is the objective of this federal reserve? james: that is a good question. the really cynical answer is keep markets afloat at all costs. i think that has increasingly been the case for cycle after cycle. and in a way which none of us have seen before, that has been

the case at the moment. market function is how they describe their intentions previously, the implication being that an equity market which re-prices lower is dysfunctional, regardless of the reasons for it to do so. my understanding was the capital markets were supposed to reflect all incoming information and price accordingly. and if it had economy -- and if an economy essentially has a heart attack, you would expect markets to decline in response to that, but that was deemed un-acceptable. now it will be a case of keeping financial markets on life-support long enough that the economy can recover, but then balancing between economic recovery and withdrawal of stimulus. it is likely to see the fed overcompensate and allow markets to be overstimulated rather than under stimulated. but the notion that it is traditional monetary policy or operating through financial markets into the real economy, i just don't see that at all.

i think the goal is to keep asset prices elevated regardless of what is happening underneath the hood. keep asset prices elevated, that doesn't keep companies from declaring trixie -- declaring bankruptcy. how much are credit markets ignoring the solvency risk? a lot of people are predicting increasing bankruptcies in the future? james: that is 100% the right question to ask. what the fed can do is distort asset prices and support asset prices, but what it can't do currently is give companies revenue that they have lost because of a loss of economic activity. i would describe the system as being somewhat overburdened by debt. home worldly -- horridly overburdened by debt, if i was being critical. i think the lasting damage to the economy will be greater than

markets are even considering, but near term, they initial crisisf the liquidity has already morphed into a solvency crisis, and that is just a bit more difficult for the fed to do with, certainly to prevent. we seen a number of cases in the u.k. defaulting. managed to enter the club. just last year it was priced above par. it has gone all the way down to default in record time. that shows the signs of the shock we are dealing with. bear argument is the central banks have distorted the market. have they? dow and s&p rally one big central-bank lift? james: i think it is a

combination of things. i would be interested to really understand who have been buers and who have been -- who have been buyers and who have been sellers. what we saw leading up to this buyersin february is the where they companies themselves, buying back their own shares for various reasons, not many of them productive. that is a very concerning sign. sinceta has shown that march, when things got dramatically volatile, it has been retail investors who have been purchasers, systematic and discretionary into should know -- discretionary institutional investors. to me, that is also critical because with retail buying at an all-time high in the equity a good that tends to be signal, but their reasons for doing so are not just fed

actions, but i think because investors have become conditioned. we have lived through a period where it was right to buy dips inequities. -- if youback where periods ofu can find 10 to 15 years where you did not want to buy equities. we are seeing economies come out of lockdown and seeing the data improve on a sequential basis. lisa: on one hand, we have the end limit data and the, data -- and the economic data that has been horrific. on the other hand, we have a real increase in tensions between the u.s. and china. i am struggling to understand why markets aren't taking this more seriously. it seems like this is something that could have serious negative effect on markets, no? james: absolutely.

i think it is another step in a journey which was already ongoing, but i have to say, the information with respect to how china is likely to be treating hong kong going forward, essentially bludgeoning through with this legislation that has been around since 2003, but has a germanic change with hong kong -- a dramatic change with hong kong if it goes through, i think that is really new information, and definitely not positive. the spat between china and the u.s., and between china and a few other countries as well, is not new information so much, but certainly a re-escalation of tensions which we knew existed under the hood. i'm not sure there's a massive near-term negative in terms of economic activity, but again, it is just showing the ability of the markets to really put aside

negative sentiment and embrace any positivity, and just power through. secularity is this is a issue for markets to deal with. calculating that and pressing it is always going to be very difficult, but it is difficult to believe it is a positive. i think the medium-term trajectory is negative in aggregate for global trade. jonathan: i think you've nailed it. going into covid-19 and the fallout around that, this was viewed as a cyclical issue. that was the character of the selloff. trade war on, trade war off. you could see it pickup in the more cyclical areas of the market. decoupling, deglobalization, all of these things, what is the character of ?he market action

james: looking under the hood in terms of sectors and individual companies, the impact is not going to be the same. youied ifainly look at those -- certainly varied if you look at globalized supply chains. consumers have almost certainly had access to cheaper products because of this outsourcing to the lowest cost marginal producer. inflation is not great for consumers, not at all in spite of central-bank pronouncements targeting higher inflation. it is beneficial to say that is not always the case. somee going to see individual companies and sector second benefits, that are already further advanced in this

sense. the market has already left upon as being part of the new world created by the aftermath of the virus. but looking at markets in is difficult to believe that, given the market for the economy as a whole, it is difficult to believe that dismantling supply chains and the cost associated, and the end result being a less trading global economy, it is difficult to believe that would be a boost to equity prices in aggregate. jonathan: james, got to leave it there. james athey of aberdeen asset management weighing in on the markets. futures up 52 on the s&p 500. from new york, this is "bloomberg surveillance," live

on bloomberg radio and bloomberg tv. ♪ ritika: with the first word news, i'm ritika gupta. the center of china's coronavirus outbreak is afraid there could be a second wave. released by the health commission, two hundred six cases were reported in wuhan -- 276 cases were reported in wuhan. a chinese tech executive fighting extradition to the u.s. has a chance of being released this week. in --'s cfo was detained

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jonathan: from new york city, this is "bloomberg surveillance ." we are live on bloomberg tv and radio. one hour and about 42 minutes

away from the opening bell. we add some weight to the s&p and positive3000, 1.8% on the session. treasuries lower, yields higher. 10 year yield, 0.68%. dollar of that, a weaker against the bulk of em and the whole of g10. euro-dollar advances 0.6%. tom: we like to do it here on television and radio, and that is cross asset data checks. for so much of america, so much of the world, it is still about the stock market. platform of the new york stock exchange or a seven-story video extravaganza of the nasdaq, going ipo and going public is a good and beautiful thing. nelson griggs joins us, the

president of the nasdaq. let me ask the money question right now for new york, wall street. how will this pandemic change year nasdaq? nelson: it is changing quite a bit. we went from having 4% working from home to 95% in the matter of a week, and that was pretty remarkable. i think we have seen the markets work very efficiently and effectively. we've been working pretty well. jonathan: let's talk about physical trading floors. just touch on that topic, and we can move on pretty quickly. do you think the pandemic is underlined that we don't need them anymore? nelson: if you look at the equities that have pretty simple price action up or down, we have a long view that the best outcome for investors is to do that in electronic format. the last few months, the data we see now on how stocks opened, the efficiency of trade

throughout the day, and in particular, the close, we have seen better performance in the electronic markets. thate of the strong belief investors want an open and transparent marketplace. jonathan: people like to come down to the trading floor for the big ipo's, the dog and pony show. ipo's in the pipeline, can you give us some insight into what you're seeing? can we expect anything anytime soon? nelson: we have performed 15 ipo's since the middle of march, and a lot of that has been in the health care space. i think the bigger challenge for an ipo is can they go out on a road show and talk confidently about the upcoming quarters. that is not as important for a health care or biotech ipo. we have seen those go out and do very well. we are starting to see other companies, though. you saw warner music filed for a very large ipo, going on the

road today. you will see more this week file . so we are seeing the nonhealth starting to launch their roadshows. many of them were very close to going in the march timeframe, and then put their plans on hold. these are deals that were in the works for a period of time. we are starting to see new deals pop up, and i think what we have here is a november election performance. who are the investors here, especially as we talk about increase in retail investors coming into stocks right now? seeing it bere more broad-based. we have not seen a lot of long investors coming to the marketplace, but as you have watched the indices continue to go up, where the nasdaq is up

8% for the year, the composite up 3%, we are starting to see investors come into the marketplace as we see the ability to get a bit more productive ability in terms of what companies say. a pretty challenging earnings quarter where a lot of companies have pulled guidance, we are now seeing more productive ability and what may happen over the coming quarters and years. tom: one more question, if we could. one day, you're going to get back to work, the pandemic is going to be over, and we are going to reinstitute ipo's. how are you going to compete with the new york stock exchange? what is the key distinction you have in 2021? nelson: we obviously do very well. 70% ofear, we won ipo's. our big story is wide cycle

support. we get the right investors, position their stories. there's obviously a lot of different media around that. we have been on quite around the last handful of years. it was in eighth very well with companies. before we round things out, looking at the rhetoric out of washington on the policy, there's going to be far more scrutiny of companies listed on u.s. exchanges. what is the role of foreign companies? and those are we going to have the same quality standards that u.s. has to abide by? all things that make a whole. what is the stance of the nasdaq on that situation at the moment? nelson: i think you hit on the one in the middle there, the auditing standards. we would like the u.s., the global focal point for growth companies to come in list. that said, there does need to be

transparency. the ftc has gotten together a group around the table for discussion of the system on july 9. i think that was a very prudent lot moree are seeing a , tooric out of washington have a meeting to make sure of contentionng when companies come to invest in the u.s. jonathan: are you looking to tighten your own rules before the government does it for you? nelson: we consistently look at our own rules, and we have tightened them to some degree. we did it last week. in concert with feedback from other participants. , when are prepared to do we have discussions on the broad-based ecosystem, it is not just the exchanges, the bankers, or the accountants. it is really everybody coming

together and saying what they expect. but we will have rules that we think are appropriate. jonathan: look forward to having you back soon. elson griggs, president of the -- nelson griggs, president of the nasdaq. i think what is remarkable about this morning, it is very clear that tension has not died down this tuesday morning, and yet, this market is ripping higher. tom: the market is ripping higher, definitely fascinating. you are dead on about china. this is not going to go away. it will depend on the actions of the week and into next week, whether we see protests or not. to me, what is extraordinary is all we are going to do is wait tuesday, wednesday, thursday to claims. 10 you imagine what this market will do if we get claims to push ?n well under $2.5 million

jonathan: i think everyone is looking on that sequential month-to-month improvement. up 56 points on the s&p 500. good morning. this is bloomberg. ♪

>> i just don't think it's credible to believe that a long-term solution to the problems we are facing can be achieved by moving interest rates. areconomic forecasts hazardous at best, even more so now. >> the uncertainty associated with the pandemic is unlikely to go away. >> this is "bloomberg tom keene,e" with jonathan ferro, and lisa abramowicz. tom: good morning, everyone. this is "bloomberg surveillance" on radio, on television