controls on transactions and freezing assets of officials, the u.s. is considering this to punish china for its crackdown on hong kong. hundreds rather to protest -- gather to protest. jamie dimon sees a good opportunity to rebound. the ecb is committed to fighting market fragmentation. twitter adds a fact check label to donald trump's tweets for the first time who accuses the media giant of stifling free speech. surveillance," taylor and francine. debt issuance from countries and and wemission, the plan still need a vote. we heard from steven major saying this is a step in the right direction, and the gradual

easing of lockdowns. taylor: i got him steven major you have thes -- massive helicopter money and stimulus but if the demand does not come back, he is more worried about disinflation, that made my ears perk up. francine: let's get straight to the bloomberg first word news. the european union's executive arm is coming out with its own stimulus package to deal with the region's worst economic emergency since world war ii and calls for spending $823 billion. two thirds will be in the form of grants and the rest will be loans and funded by joint debt issuance. in hong kong, hundreds of protesters returned to the streets demonstrating against china's plan to take more control of the city with national security measures. projectiles.ired

the u.s. is thinking of ways to punish china for the hong kong crackdown and is weighing whether to declare the colony has lost autonomy from beijing. there could be visa restrictions for chinese communist party authorities. for the first time, twitter has added a fact check label to president trump's tweets. claims unsubstantiated about mail-in voting. the president saying twitter is stifling free speech and i as president will not allow it to happen. 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. this is bloomberg. francine: thank you so much.

, headlinese markets crossing the bloomberg terminal on the commission's proposal in terms of 500 billion in grants and 250 billion in loans, as something that is sending european stocks and italian bonds to session highs. the focus is on the tensions between the u.s. and china, but they decided to chewed -- choose on the better-than-expected news on reopening's. i am looking at renminbi. hope and lot of that optimism filtering into the u.s. , up almost 400 points on the s&p to above 3000. above on the dow to 20,000 and some of that tension can be seen elsewhere. earlier you saw a lift in yields. they are now steady.

you had a strengthening of the dollar index that is now weakening. the run to safe haven -- francine: the trump is looking into sanctions to punish china for its crackdown on hong kong, protesters gearing up for what could be its biggest day of unrest in months. quicklyame ugly pretty and we have hundreds of andesters on the street police trying to stop it with various means. and the protest go bigger bigger until something happens? iain: it is hard to say. there was a lot of expectations that today we would see huge crowds in the streets like we did on the weekend when thousands of people clashed with riot cops firing tear gas.

a lot of protesters woke up to a heavy police presence across central hong kong, hundreds of riot cops surrounding the legislative council which was stormed last summer. it looks like that has largely dissuaded people from coming out. there were scuffles in several different districts and hong kong, more than 300 arrests, police firing pepper balls into the crowds. protest the enormous people predicted for today did not materialize so it is not clear whether the rhetoric coming out of beijing and the imposed security law and how people feel here could prevent broader protest against this new law. francine: what does china do next? the pressure coming from the

u.s. including sanctions, does it make them double down on their resolve or does it make them more friendly? iain: that is the question everyone is waiting for. the law has been kicked into a sort of legal approach that will likely be approved by the national people's congress on thursday in asia. that will kickstart a process of them figuring out the finer details of the law. it does not really look like there is anything the opposition can do to stop the law from coming in hong kong. as he mentioned earlier, there dutch as you mentioned earlier, there are growing calls -- as you mentioned earlier, there are growing calls in the u.s.

we have seen tit-for-tat andures with the trade war the rest of it. strongly,. intervenes we might see china relent or push forward, but at the moment we are in a wait and see approach for what the finer details in the law include. taylor: what does hong kong want from the international community? iain: a lot of people here, we had martin lee, the so-called father of hong kong democracy, he told hong kong it is not strong enough to fight against the communist party. they need international support. they are looking for threats from international communities, the u.s. and the u.k. that would move the needle on beijing's consideration. it is hard to say whether sanctions or some things being

discussed publicly would do that or prompt a response from beijing, but probably would not prompt them to leave the law alone. if the u.s. were to revoke hong kong's special trading status chinaallows trading to without tariffs and the rest of it, that is something protesters would be calling for. today there were calls for hong dependents, a phrase that was avoided because it is a sovereignty issue. it is almost as if the protesters are attempting china to do something or make this final appeal to the international community. taylor: thank you so much -- francine: thank you so much for joining us. coming up, we will have a lot more on the markets to see what

the markets are doing, and whether this divergence between financial markets and the real economy will continue. coming up, we speak with nouriel roubini. this is bloomberg. ♪

♪ francine: this is "bloomberg surveillance," taylor ran francine from london and new york. we have been looking forward to speaking with nouriel roubini. thank you for joining us. if you look at our question of the day, basically a question on timing, we are trying to figure

out why are real and financial world verging, -- diverging, and what needs to happen for them to stop? it is definitely to verging. -- diverging. fed arekers from the realizing there will be massive deleveraging of the corporate sectors which are highly leveraged they have been firing millions of people. the corporate sector and the housing sector have to spend less and save more. they will do less capital sector -- capital spending in the corporate sector and less spending in the auto sector. look at the market expectations in terms of [rnings-per-share,

indiscernible] go back to the same level of earnings as we were at the beginning of the year, something like a v-shaped recovery. , there will not be a v-shaped recovery and things will be mispriced. some people say, i don't care about earnings, i care about the policy rate of zero and yields are only around 60 or 70 basis points so p/e ratios should be higher because of the liquidity. low for anyare very given p/e ratio, the ratio should be low. if we are looking at the differential for the premium on the s&p 500 in 10 year treasuries, it is 300 basis points. in the global financial crisis it was about 700 basis points.

you are having a volatile risky time so there is a risk of mispricing. wall street is dominated by big firms and big banks. so how much of a correction do equities need to match up what we are seeing in the real economy? nouriel: in my view, by the end be in bear we should market territory. the trends of the last few days, it looks like we are going back to the level of the beginning of the year. that is inconsistent with a u-shaped recovery so that is right in the value u.s. equities. you are looking at bond yields jgb,he u.s., treasuries,

they are essentially in an l. they are looking at emerging-market and have had l-shaped movement on the local currency, the foreign currency debt of their stock market. you are looking at non-us developed markets. stock markets are following a u-shaped recovery, not a v-shaped recovery, so the batcave year of the u.s. -- behavior of the u.s. stock market is very unusual. back, if we to push are buying what the fed is buying, shouldn't you be buying etf's, equities, investment-grade fallen angels? nouriel: you should buy them. the question is how much. it is true the fed is buying more bonds, even risky ones like fallen angels so the stoxx should be lower than -- stocks

should be lower than otherwise. we are seeing retail and department stores and others defaulting, going into chapter seven or chapter 11, so the fact that the fed will buy some fallen agents -- fallen angels will not prevent a significant surge in default and liquidation, and recovery rates and losses will be bigger than otherwise in economic recovery. taylor: with the fed as the buyer and lender of last resort, i am wondering if they can get out as quickly as they got in. nouriel: this time around, i think the fed has done overall well but they have done one mistake. the fed is not supposed to take significant amounts of credit risk by buying fallen angels and

etf's not of a high-grade it is taking a significant amount. from the corporate sector, that means losses for the fed. the massive amounts of leverage in the corporate sector in the last decade, the fed even worried about plo's, leveraged loans, fallen angels, high yield investment grade. those high levels of leverage are risky and preventing that from happening by artificially reducing the spreads on the high yields, you are eliminating the fundamental driver of the need for having a deleveraging of a high leveraged corporate cycle in the united states. taylor: nouriel roubini will be staying with us. we will get into the top 10 that will determine a

depression. an exclusive conversation with john williams at 9:30 a.m. new york, 2:30 p.m. in london. this is bloomberg. ♪

♪ this is "bloomberg surveillance," taylor and francine from london and new york. we are having a great conversation with nouriel roubini.

host of a twice-weekly broadcast service. we have the commission announcement of 100 -- 250 billion in grants, the rest and loans, what does it tell you about the resolve of europe to stick together and show solidarity with countries hit more by the virus? nouriel: it is a positive step in the right direction because in addition to a monetary backstop of the eurozone, the eurozone needs a fiscal backstop some people say it is a moment effectivelyhich they can advance the union and more sharing. in whichall it a model we are trying to provide support for countries in trouble. there is not yet joint liability so these are not yet corona

bonds and so on and so on. i think the germans have realized the constraints of the ecb, given the german position forward, on how much to do qe and provide a monetary backstop then you need a partial fiscal backstop without either one, the eurozone does not survive is -- does not survive. it is a positive step. francine: how does the european union convince these four small countries that are against to come on board? nouriel: a lot of it is bargaining. some of the money will go to these countries. most of the money will go to italy, germany, and spain. they will find something of a compromise.

i don't think it will be a constraint. there will be some degree of an agreement, otherwise the market reaction will be severe. eventually i believe they will reach an agreement. taylor: what are the deadly d's that will drive a depression? with deflation, do you see the risk of deflation or are these inflationary forces? nouriel: my view is that in the short run, the collapse of aggregate demand, you need monetary and fiscal stimulus to prevent deflation and we will inflationary and deflationary pressures next year. money,icopter drop of direct or indirect monetization of large fiscal debt, and in the presence of negative supply shocks that are permanent and

the economy, that in the economy, deglobalization, monetization of the supply chain, fragmentation of the global economy, so these shocks will reduce actual and potential andth, cost reduction, reduction from asia and europe. the 1970's after the first oil shocks. eventually you will have a pickup in inflation and you will have a situation of stagflation, recession and inflation. the pressures will be disinflation if not outright deflation. to the end of the 40 year bull market, the bonds -- the bond yields rising, derailing equities and other risky asset. taylor: always appreciate your

time, nouriel roubini of nyu stern school of business. always great to get your thoughts on deglobalization, decoupling, the risk -- list goes on. let's take a look at how the markets are doing, getting more optimism, more of a left. the russell tooth -- more of a lift. 2000 rising. we will have much more next. this is bloomberg. ♪

staying connected your way is easier than ever. you're just a tap away from personalized support on xfinity.com. get faster internet speeds with a click. order xfi pods to your home in a snap. or change your xfinity services with just a touch. all in one place. you're only seconds away

from all of that on xfinity.com. faster than a call. easy as a tap. now that's simple, easy, awesome. francine: this is "bloomberg surveillance." let's get straight to the bloomberg first word news. konga: police and hong

fired pepper spray at hundreds of pro-democracy demonstrators today, the first time in months that protests had broken out. the protests were demonstrating against china's legislation that would give beijing more trouble -- control over hong kong. faces moreon pressure to fire dominic cummings. ruleshink he broke locked and members of parliament think you should go. he pace that he faces an hour and a half of questioning today. russia wants to start oil cuts in july, in line with the opec-plus deal. since the agreement was reached, saudi arabia trying to prop up the market with additional cutbacks. allies in the persian gulf did the same as they weigh whether to extend the cuts or reduce them as planned. a defining moment are elon musk

and spacex. if all goes well, a spacex rocket will launched from cape canaveral with two astronauts, the first time humans have written aboard a commercial spacecraft. 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. the. in ritika gupta. morgan -- jamie dimon says government stimulus will aid the rebound. >> we were thinking about today the base case, hopefully this will happen. i give it good odds. the government and federal reserve have been responsive.

large companies have a huge wherewithal. hopefully we are helping keep the small ones alive long enough that they can get back into business. francine: fed officials have weighed in with their views on the economy. james bullard expects the jobless rate below 10% in december. neel kashkari feels -- fears we could see bankruptcies of small businesses if the crisis persists. byare delighted to be joined tim adams. virtual foe sting a european conference on the issues most pressing to the community from the pandemic. you say lack of solidarity and we have this program put in place by the european commission. people say it is a step in the

right direction, but will we get something concrete out of it? tim: it is a momentous time for europe. it is a big leap in the direction of a fiscal union that is not fiscal union. money,re huge sums of 750 billion euros in addition to what is in the pipeline, so it is a huge support for the european economy, a much needed support. francine: is there a danger that europe will lag the recovery in the u.s.? the u.s. may reopen not necessarily soon, but they come from a different time and place in the economy. europe faces: different issues. so they do countries not have the consolidated fiscal approach that we do. their reliance on the banking system presents challenges, but

i have no doubt europe will follow the united states and we will continue to see a recovery next year. whatdoes this -- taylor: does this due to supply chains? what does it mean for some of these companies may be thinking or rethinking about their supply chain? tim: it teaches just in time inventory and reliance on supply chains distributed globally presents risks we had not thought of before. we need better diversification and backup plans, and in the u.s. you will see some of those supply chains come closer to the u.s. it may be at greater cost but certainly greater reliance. taylor: we have been talking about the strength of the consumer which is the majority of the u.s. economy.

what have you seen of the consumer behavior now that china has opened up that we can glean in the u.s. as we start to talk about a reopening? tim: that seems to be leading services and entertainment, movie theaters, the capacity to interact with our fellow citizens is constrained, but manufacturing is picking up. production of goods is picking up and we need to see it in the supply chain. things with individuals interacting with each other will come later, but they will come back. francine: what kind of recovery are you expecting? we talk about alphabet, numerical. should we look at it differently, when the consumer is back and unemployment? tim: it is dependent on do we get a nationwide testing in the

u.s., can we get treatment that people rely on, and ultimately do we get a vaccine? once we saw the health crisis, then we can think about what the economy looks like. i think it will be jagged and uneven, but it will be an upward trajectory, just not a straight line. francine: what does this mean for banks? is this the time banks redeem themselves after 2008, because they are a crucial vector to get some of these grants and loans to real people? tim: they are, and if you look at the 20,000 banks globally, we are part of the solution, intermediate in capital into the economy, using our balance sheets and being supportive. there are government support programs and some of the risk is being offloaded onto public balance sheets, but every banker i have talked to is doing everything they can to support economic growth in the real

economy. taylor: some ways they are doing that is unleashing unprecedented monetary and fiscal stimulus. is helicopter money working? it and it isto do working. it will be slow and cumbersome. we have a typical liquidity trap. interest rates are so low it is difficult to get people to borrow. we will hear from the ecb additional support, and the fed will do what is required as well, so it is the whatever it takes mentality. taylor: thank you to tim adams. ,tay with us because coming up an exclusive conversation with john williams, federal reserve president. this is bloomberg. ♪

♪ taylor: i am taylor riggs in new york with francine lacqua in london. i wanted to take a look at the markets. continued optimism continuing to filter in. --terday we closed shy of 7 3000 on the s&p. with a lift of about 37 points on the s&p 500, firmly above 3000. it is such a key psychological level that we are trying to get to what the markets, trying to go back to those march levels that we had not seen since the pandemic, and you are getting a weaker dollar as risk on has translated into cross asset.

i want to flip over and go into a fact check with our colleagues in washington, d.c., because twitter started fact checking donald trump. a pair of tweets making unsubstantiated claims had a fact checking label added to them, and the president did not take it lightly. kevin cirilli joining us now. it was on the bloomberg technology show last night talking to our colleagues that cover twitter and they think twitter has tried to handle this in the best way possible, despite in the past, may be caught in their heels with misinformation and trying to navigate the regulations. where does this leave twitter and the trump administration and the battle for free speech versus misinformation? right,that is precisely the tension that washington is

trying to deal with. republicans led by president trump have been saying for some time they feel social media platforms silence conservative voices, so twitter is in a catch-22 of sorts because they have to balance that. democrats have issues with how large these tech companies have become. they note they are fully well aware of just how political volatile the situation has become, but the bottom line is president trump is not backing down, going to continue doing this, and views this as somewhat of a political asset in the sense that he feels should they silence him, that will only help politically. taylor: what does this mean for the election mail-in voting if we don't open up? kevin: with regards to mail-in voting, republicans are adamantly against it and have

raised significant concern as it relates to national security measures of mail-in voting and how practical this would be, but i think when you go from a broader standpoint trending wise, over the long term, mail-in voting and other forms of voting are the way americans are trending. the president has made it clear that is not his first priority. biden vice president joe -- you will hear a lot more about access to voting and how important that is as well. francine: talk to me a little bit about these heightened tensions between the u.s. and china. how strongly does the u.s. feel about what is going on in hong kong? they are contemplating going as far as putting sanctions on officials and this would be a

huge escalation. kevin: absolutely, and we reported that last week when i interviewed the undersecretary and several lawmakers who have introduced bipartisan legislation to sanction individuals and other entities for carrying that through. there is bipartisan support from congress to show support for hong kong and to really send a signal to beijing but their behavior is not going to be without consequence. theirnal to beijing that behavior is not going to be without consequence. affect the u.s.-china relations regardless of who the occupant of the white house is. francine: if there were some sort of sanctions, a reminder of what is going on with russia, would they be as aggressive as

happened with several people in vladimir putin's circle? how quickly could they come into force? kevin: they could come into force in a couple of weeks, and the democrats are fully on board and would like to see this happen. this is not a politically partisan issue. enjoys one the president full support. i am hard-pressed to find an issue that democrats and republicans agree on, but hong kong is one of those issues. as far as how forceful they could be, it would allow for there to be room to grow so to speak. i think the first round would allow them to have the second round and third round should china not get the message. francine: kevin, thank you so much.

up next, lauren sauer of johns hopkins university, assistant professor of emergency medicine. this is bloomberg. ♪

♪ ritika: this is "bloomberg surveillance." renault and nissan and mitsubishi are revamping their alliance, unveiling standardized platforms to cut costs. each company will focus on its strength for new vehicles, renault for electric cars and mitsubishi for plug-in hybrids. amazon is in talks to buy drive-in -- driverless vehicles with zeus. a deal would accelerate its automation efforts. the price is likely to be less than one bill -- $1 million. will send outng layoffs this friday.

about 1300 of their 18,000 members accepted buyouts. they needed to cut about 10% of their workforce. their planning to slash workforce by about 20% this year , bracing for a slow recovery and projecting ridership will return to just half of where was before the coronavirus pandemic. that is your bloomberg business flash. francine: thank you so much. bloomberg has developed a unique partnership with johns hopkins who has been at the forefront of the national response. every day, we bring you experts from public health, infectious disease, and emergency preparedness. us.k you for joining when you look at the cdc and combined testing data that we know, how much more do we understand this virus compared

to two weeks ago? lauren: we are getting a better picture based on the increased numbers of tests and the testing data being shared. the challenge with the data is it is two types of tests, the antibody test and the viral test, which tells you if you are sick right then. as soon as we can disaggregate that testing, it will be better, but being the testing data flow in is so important to all these phased reopening's. francine: are we close to finding in these studies a medication, something that works? a lot has been focused on remdesivir, but how much more knowledgeable are we today compared to a month ago? lauren: we are seeing a lot of the data come in from these early studies. actremdesivir trial, the

trial from the nih just pushed their first major paper out which showed improvements to recovery times and clinical status, and mortality, which is great. there is a lot of limitations with that study. it is the first one out of the did not them and disclose the investigator of the study, but the study is very good and the placebo arm allows us to see more about how the patient are recovering. we saw recent data from hydroxychloroquine, a registry study that led to the who and others suspending the use of hydroxy clerk when because of harms identified and -- hydroxychloroquine because of harms identified. we have a lot more to learn as

well, but we are seeing good data out of rigorous studies which are improving our understanding of what therapies will and will not work, and will cause harm. francine: do we have a good idea of how many people have had covid so far in the u.s. and worldwide? do we need to test to find out how this is moving around? lauren: we could always test more. it is good when you start to see the positivity rate in the testing going down. the who would like to see roughly 5% positive of all of the tests being done, or less. less is always better. farre all over the map so as that rate, so we have a ways to go on testing but there are strategic efforts happening that are great. the more we can test, the more we can use those other public

health measures like social distancing while we are increasing our test -- testing capacity and making sure the test are happening in the right spots, accessing rural populations and hotspots, making sure the data is specific with regard to the kind of test, all the better. francine: what do we know about the antibodies? lauren: it will be a ways to go. we will have to do longitudinal studies to see how antibodies develop. a lot of people have antibodies, which is good. we have to understand if it is those neutralizing antibodies. helpingbody tests are but we are seeing a lot of's -- false positive and negative test, so the tests have to get

better to do rigorous studies. i think people are working on that. there is a lot of science behind understanding who makes neutralizing antibodies and who develops immunity, and what that picture looks like, how long it lasts. there is a lot of work to be done. francine: thank you so much for joining us, lauren sauer from johns hopkins university. check out the bloomberg terminal for more information and tune in for our exclusive with johns hopkins experts on battling covid-19. the focus is tensions between the u.s. and china. kevin cirilli was talking about some things the u.s. and trump administration would be looking for, including sanctions against chinese officials. that sent a bit of concern on the market, but european equities and u.s. equity futures

are up. this is as the european union put the final touches on a fiscal stimulus program to be funded by e.u. debt, the euro now gaining and i'm looking at the renminbi, 7.1544. simulcast,our jonathan ferro and lisa abramowicz with more "bloomberg tv.eillance" on radio and this is bloomberg. ♪

♪ credible ton't gets

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. " weh equity futures positive, are live on bloomberg television and radio. brand-new a program, and what did you do? tom keene takes the day off. we will continue this conversation as normal. all the right noises coming out of europe. lisa: i