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. " 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'm struggling to understand the disconnect, where

you have these records stimulus plans being proposed and a pretty bleak outlook certainly by the ecb's madame lagarde, and yet, we see the fear of missing out trade in full force across equity markets. it just feels like if this fomo trade continues, how much does the pressure come on fiscal policy makers to continue these programs? jonathan: i completely agree. right now.ope italy rallying because of what europe is about to do, or what they are talking of doing, and germany not really backing up any big way. we had record issuance in the united states. what have treasury yields done? not a whole lot. the market is wide open for these guys to do a whole lot more. lisa: yesterday, the federal reserve sold two-year notes at ,he lowest ever yield of 0.18% which brings us to what we are

looking at today. you are seeing u.s. treasuries selling another $45 billion of five-year notes. also it to :00 p.m., the fed is going to release its beige book -- also at 2:00 p.m., the fed is going to release its beige book. i hear that someone i very much respect is interviewing the new york fed president, john williams, at 9:30 a.m. eastern on bloomberg television. i think that's you, jon. jonathan: i seriously thought you were going to say michael mckee. he will be interviewing alongside me. we will be catching up with the new york fed president. i think something we really got to drill down on, what is the objective of monetary policy at the fed now? two months ago, it was market functioning. that's got to have changed in the last couple of months. as you go from shut down to reopening, just the nature of the effort at the federal reserve need to change?

i think that is going to be the focus for us at 9:30 eastern. lisa: this morning i was looking at ccc debt, the debt of companies closest to default, gaining more than 4%. you have to wonder how uncomfortable fed members are with the idea that they are pushing investors further into risk at a time they said they don't want to backstop solvency. they don't want to rescue companies that otherwise would go bankrupt. jonathan: i've got to say, i don't smell any discomfort any time i speak to these guys. they seem really comfortable with what they are doing. we will try to seek out some this foot -- some discomfort a little later on, 9:30 eastern with the new york fed president, a little later this morning. we've got to talk about this reopening. we saw pictures of beaches open over the weekend, and the beaches were packed. i made the point in the last 24 hours that i think how that made you feel probably tells a lot

about what you think about this market. for many people, it triggered fears of a second wave. for others, it fueled hopes that we will reopen quicker and better than expected. to bring someone in to give us more clarity on what he thinks on that situation, i am pleased to say that julian emanuel joins us now of btig. if the weekend photographs, the pictures of people getting back to normal, did it trigger fears of a second wave worth fuel hopes -- second wave or fuel hopes that we can reopen faster? julian: i think it actually fueled both. first of all, it is very clear that the last several months have made this a more emotional time than usual, but i think when people saw those pictures, you had both. again, somewhat dependent on the state you live in, whether the cases are rising or falling, and how the progress is, but it really drew out emotions. the weather was reasonably nice

across the country, which i think fed into the optimism of share price is the last several days. lisa: so let's talk about the emotion in stocks right now. what kind of reopening are equity investors pricing in, one that is steady and contained and doesn't include a second wave, or something that comes in fits and starts, but at least it is a beginning? julian: it feels to us as if it is more of a fits and starts type of issue. we have called this the potential -- everyone is using letters to describe the recovery . we call it a bathtub recovery. basically, the u is extended into 2021. but what really matters, i think, as much as the recovery itself is what people are pricing and with regards to the medicine, and where stocks are , basicallyto us

indicates that people are believing that there will be some sort of vaccine, not necessarily available this fall, and playing that there could be a second wave, but certainly for the fall of 2021. the big challenge for so many people is finding that right balance, calibrating your exposure to cyclicality and safety. how do you balance those two things for now? we just saw this classic risk on move with a huge cyclical tilt. the stay-at-home stocks, the likes of netflix lower, they reopening names come of the likes of delta, ripping higher. how do you want to balance going forward from here? julian: we've looked at a lot of data going back the last 30 or 40 years, and what we saw with remarkable consistency is the stocks in sectors that were underperformers during the bear market phase, once you

transition to able market, tend to be the leaders. we are not entirely sold on the fact that you have gone into a new bull market. we actually think that around this level of 3000, you probably need to do a bit of work timewise. but in order to account for that risk, and we have seen that the last several weeks, people are rotating into small caps, into energy, into financials, and taking some chips off the table from these shelter-in-place stocks, and we think that is a prudent strategy to keep doing. jonathan: what would give you more confidence that that really is sustainable? that it is more than just a squeeze? julian: if a number of companies when into phase three trials, that would be the first thing. the second thing is washington would listen to chairman powell, who has been adamantly for the

last month insisting that more fiscal stimulus is necessary, particularly when you look at small business usa. the time to put politics aside was a long time ago, and from our point of view, they need to consider how that package is going to look before the fall. those would probably be the biggest things for us. struck this morning by something bank of america global research put out, saying that hoping either fundamentals will improve at record speed or that they simply don't matter is a real risk, given markets' inability to recover from recessions in the past 20 years. the fact that people are looking at the medicine in spite of the fundamentals, how much does this boost to assets right now decrease some of the pressure on policymakers to continue with the medicine? julian: the medical aspect of it

has got to be sort of full speed ahead. if you look at the last couple of days, several other companies announcing that they felt good about moving into phase one trials -- lisa: excuse me, when i say medicine, i am talking about the physical medicine coming out of washington -- the fiscal medicine, the policy coming out of washington. fiscal medicine. another aspect of it is that certainly, we have seen in the last several weeks is the ratcheting up of pressure with regard to china. that is something that sort of is one of the caps in the marketplace as well. we actually think that is the data continues, it is not going to improve dramatically. certainly, jamie dimon coming out and saying that a stronger rebound is looking more likely is encouraging, but the fact is

the employment situation and small business america is still very much at risk, and the closer you get to the fall and the closer you get to the election, the more imperative it is going to be, given that those are the constituents who are tong to be casting ballots do a bit more to get us through to where we are at the point next year where you actually do get a more durable recovery. you mentioned china, a key ingredient to markets right now. i can find little evidence of worry that this escalation in tensions between the u.s. and china is leading to any dampening in the risk on trade. do you think that right now, investors are overly complacent that we are not going to see a ramping up of tensions that will have a drag on global growth, especially heading into the election? think it is probably

more bluster heading into the election, but if you look at the options market, which you know we do, what we have seen again is that the hedging for the term just past the election has become cautionary again. downside puts have become very expensive relative to upside vol, which tells you that the risk with regard to geopolitics is more of an issue for 2021, and we think that is applicable regardless of who wins the election in november. jonathan: always great to catch up with you. send our best to the family. julian emanuel of btig. we are starting to see it in one particular area of the market, a quiet selloff in the chinese currency. i call it quiet because hardly anyone is talking about this, but just slowly, it is starting to backup. overnight, you see it when the chinese officials set the reference rate for the chinese currency, just allowing a little

of a story building, and it is worth our attention. lisa: absolutely, especially in contrast with the risk on rally we are seeing in other currencies. the idea that the yen and the dollar are we getting versus other currencies, typically a move you see and risk on markets, that doesn't cohere with an escalating trade war and rhetoric we are hearing from the u.s. and china, even as the yuan continues to selloff. jonathan: we got that warm, fuzzy feeling of the federal reserve doing more. will be catching up with the a lot later this morning. i can't wait for the conversation with new york fed president, mr. williams, joining us on bloomberg tv and bloomberg radio, catching up with michael and me. with futures positive from new york this morning, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. the european union is coming out with an unprecedented stimulus package to deal with the worst

economic emergency since world war ii. to $283 for suspending billion -- it calls for spending of $823 billion. in hong kong, hundreds of protesters returned to the against demonstrating china's new measures for the city. meanwhile, the richest person in hong kong has come out in favor of the chinese law. the billionaire said it is every country's right to address its national security concerns. and it is a defining moment for elon musk and spacex. if all goes well, a spacex rocket will launch this afternoon from cape canaveral, carrying two nasa astronauts, the first time humans have ever written into space aboard a commercial spacecraft. with thele will dock

international space station 19 hours later. 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. ♪

>> you're really talking about an economy in the euro area that is, and one given year, going to shrink more so than it has, for instance, during the great

financial crisis. ecb president christine lagarde with some sobering words. if anything, the euro rallying. equities with a lift as we are set to experience more stimulus from places like japan, and perhaps they finally get their act together in europe, too. equity futures up by 32 on the s&p 500. we are higher by 1.1% on the s&p. a nice lift in the equity market in europe, and a rally for the euro in the fx market. the dollar weaker, the euro stronger by 0.3%. $1.10 is where we are on euro-dollar right now. treasuries not doing a whole lot this morning. yields up by around a basis point on the 10 year to 0.71%. that is the price action. here is the tension in china. your morning must-read comes from "the financial times." "rising friction between the

united states and china and we beginning -- and weakening globalization have been apparent , but covid-19 has accelerated these trends. the pandemic is turning countries inward. it is reasonable to bet that the world which is emerges on the other side of the pendant it will be far less cooperative and open than the one that -- the other side of the pandemic will be far less cooperative and open than the one that entered it." that seems to be the consensus view on the year ahead come the decade ahead. lisa: but i don't understand how that bleeds into markets. we are certainly not seeing the fear trade we saw a couple of years ago, with the rising tensions with with spec to trade in the u.s. and china. but if you get deglobalization, when do we start talking about inflationary trends that come from the extra cost of moving things back home? tensions not these affecting markets that were roiled before? why are some of the microchip stocks not responding?

jonathan: i think we touched on it on the start of the stove, stimulus, stimulus, the fed. we seem to be ignoring the politics and detention as politics between the united states and china continue breaking down. protests we see on the streets of hong kong today, relative to what they were like several months ago. well, the police presence is so heavy and highly visible all , so theentral hong kong police are trying to preempt any momentum that the protesters can get. we saw that on most every street corner. there were hundreds of that made --thered

gathered, and there were hundreds of arrests made throughout the day. it was certainly not at the level we saw last year, but i think the ongoing tensions that tove all of this are set come out with the national people's congress tomorrow. lisa: if we take a look at what is going on in washington in response to this, there has been a conundrum. how do you punish china with their actions with respect to hong kong without hurting hong kong and the u.s. more than beijing? the latest is a range of sanctions. what types of actions would have a real effect, provocative or otherwise, on china that people are looking for from washington? enda: you are right, it is a tricky one for the u.s. by all accounts. the indications are that they are looking at sanctions against .ome chinese officials we know of course they also have

the option of taking away some of the special trading status that hong kong enjoys with the u.s. but of course, the point is that if the u.s. were to take away the special trading status of would feed down on hong kong. hong kong had its worst quarter for growth this year. [indiscernible] you have to imagine that would be another blow in hong kong, one of the reasons why people are questioning whether or not it can maintain the status it has as one of the world's great finance hubs.

lisa: it has definitely been something we have been watching for a while. once were of equation here is that hong kong provides less of a boost to the chinese economy than it has in the past. traditionally, it has been a much bigger proportion. i was reading that in 1997, at the time of the handover, hong kong accounted for 20% of china's annual economic output. now it accounts for less than 3% . how much of a hit would it be to china if hong kong were to lose special trading status with the u.s.? of course, let's not forget the role hong kong still plays as a source of capital for china and its companies. maintains a closed capital account, and hong kong provides a common law system that the world system can use in an open account. we have seen tensions with the u.s. increase, and more chinese

companies are looking at hong for secondary listing. hong kong is a much smaller slice than it was in the past. but the point is hong kong is still a critical gateway. it is a place where you can do business under the rule of law, and is a critical gateway into and out of china. not a role that china can necessarily discard overnight. even if it clamps down on civil liberties and hong kong, they will need to tread carefully on the commercial side if it doesn't want to kill that golden goose. jonathan: just to wrap things up, influencing and changing the behavior of the chinese communist party has been something that western governments have been focused on for a long time, and i have been spending a lot of time recently

trying to understand whether that is something they should even bother focusing on anymore. it is pretty clear they are not going to be able to change the behavior of the chinese communist party, and what needs to happen is they need to form alliances so we can break down into separate spheres of influence. how are you thinking about that situation at the moment? enda: clearly, beijing is digging in when it comes to hong kong. one of the points about the national security law is that it onchina's way of enforcing hong kong, while it signals to the rest of the world that this is our backyard. of course, china continues to ratchet up the rhetoric, and they are making it that they will not accept what they called for meddling. at the same time, they are

sending medical kits around the world, so china is trying to send a civil message to washington. jonathan: fantastic to catch up with you. from new york this morning, this is bloomberg. ♪

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♪ jonathan: from new york city, this is "bloomberg surveillance ." we are live on bloomberg radio and bloomberg tv. alongside lisa abramowicz, i'm jonathan ferro. than00 futures up by more 1%. we advanced by 34 points. in the bond market, you don't see a big move lower in treasury the way you might expect. yields are up just to basis points on the 10-year to 0.70%. over the last 10 days, to $1.10.r from $1.08 slowly, europe making all the right noise about putting a package together, but i have to stress still, we don't have the whole of the continent onboard with what people are talking about, and unfortunately, that is critical. the idea they

proposed that the european union's governing board is proposing a bickering that connected -- bigger than definitelyckage is good. i am also wondering about the ecb saying they are going to increase bond purchases. you were talking about the lack of moving yields in response to this risk on feel. is this market even a market anymore, given the fact that central banks basically own it? jonathan: i thick it is fair to say that some of these bond markets are no longer markets anymore. i usually beat up on the jgb market because of how much the boj ads. some of the securities in japan hardly trade anymore. but on the european can package -- on the european package, i find it really interesting that even when we had a smaller number, the netherlands and austria weren't behind the plan. so you're telling me that the plane is more encouraging because the plan is bigger. i believe it could be bigger and

the perfect place -- bigger in the first place. a bigger plan sounds good, but i want to see everyone on board with a plan to do something at the european level. conversations the have been going on. the frugal four, the ones that contribute th more than they get back, analysts have been talking about that if there were some real pushback issues, some of that would be incorporated at this point. so those discussions have been going on, but you are right. this isn't a done deal. you wonder what kind of downside risk there is if this doesn't come together. jonathan: i've been crossing my fingers for the best part of a decade, hoping that europe would finally get it together, and still, we move slowly. i get it. things have shifted a bit. but let's hope we can make it over the finish line this time around. to talk about the bond market, let's bring a good friend of this program, kathy jones of

charles schwab. i've been thinking about what would create the most amount of pain in this market for the most amount of people. inflation. how underpriced is inflation coming out of this as we reopen? kathy: it is really underpriced. we are not looking for a lot of inflation. we have to get through the deflation before we can get to worrying about inflation. but when you look at the way market is priced right now, there's really no expectation built into the bond market of inflation, so it is a huge concern that keeps coming up with our clients, even though we think it is a couple years down the road, if it is out there at all. jonathan: there just seems to be some confidence about the fronted of the yield curve. it is really anchored. central banks are going to sit there for a long time. there used to be a lot more uncertainty about the longer end , and response to any pickup in

inflation. what are your thoughts on that at the moment, specifically here in the treasury market? i think there if the expedition that in a worst-case scenario, the fed goes to yield curve control, and that keeps the short to intermediate term anchored, and they would take whatever move they need to take in order to anchor the long end of the curve as well, as much as they did in that post-world war ii era. but i do think that for people worried about inflation, the cheapest way to hedge it is probably tips. there's almost no yield. in some cases, they have negative yield. but in terms of hedging tail risk, tips are a very efficient way to do that. we do see people barbell in their portfolio, so they are buying short-term credit and long-term tips as a way to play both ends of the spectrum. i certainly understand

where the inflation would come from. people talking about how money printing in the past hasn't led to inflation. certainly we didn't see it after 2008. i do wonder whether the trade issues and the deglobalization we were talking about early in the program will lead to inflation, the idea that overseas production was cheaper. you bring it back on shore, it gets more expensive. how much is that driving the barbell idea you have? kathy: i'm a little bit skeptical that companies are really going to reshore that much because it is still going to be a big leap in terms of -- andosts, and they can can they really pass those on to consumers and not just hurt their margins. so i can see that you will see some movement of concentration out of china, but a lot of it is still going to places that the labor costs are cheaper, and you still have this access to global

supply chains. latin america, obviously, the rest of southeast asia. if deglobalization is going to happen, i thick it is a long-term process, just as globalization was. we're just not seeing the kind of inputs to inflation that i think will produce it in the next year or two, or probably even three. but at some point down the road, there's always the possibility it could materialize, and i frankly think central banks would welcome it. they would be very tolerant of and overshoot on inflation at this stage of the game. jonathan: that's the point, isn't it? they would be tolerant of it. let's talk about how they would respond to any of this, if at all. kathy: not initially. has undershot their inflation target for i don't know how many years now. we have heard from powell that the emphasis on this is a

symmetric target of 2%, on core pce or whatever measure you want to use, so i think they would be quite tolerant because i think the central banks believe inflation is a problem they can solve. they've done this in the past. they know what it takes. so this is not their big concern. deflation is the bigger concern, so i do think they would let it run for a bit, as long as it was a mild acceleration and not a runaway acceleration. lisa: let's talk about another problem the federal reserve and other central banks can't solve, or perhaps have been unwilling to solve, and that is bankruptcy. , is there any discomfort emerging from fomc members, given the fact that we are seeing a rally in the risky riskiest debt this month as investors get more that we see stimulus?

it has lead to elevated prices. in other words, how much pain are people going to feel for buying ccc bonds right now? kathy: it has been remarkable to me how people have piled in because of the perception that the fed is going to buy the whole high-yield bond market. if you listen to what they said and look at the term sheet, they are not buying the entire market. i can see that spreads were so elevated that they needed to come down. i think that makes sense, just the provision of liquidity helps that. but they have been very specific about buying some fallen angels, a limited amount of etf's. people are trained now. think they are just conditioned, if the fed is buying it, they are buying it. perception is that the fed is supporting the high-yield market, broadly speaking, and a lot of people have run in. if you look at assets under management in some of the bigger etf's, they have jumped 20%, 30% in the last couple of weeks, so

clearly a lot of people are chasing the trade. lisa: it has been shocking. i have been watching hyg, the blackrock high-yield on etf, that has seen $2 billion of inflows this week. youyou basically saying guys are overpricing the fed put, and right now we just want to hide out in investment grade and treasuries? kathy: we definitely prefer investment grade, and at the shorter end, one to five years, which is what the fed is buying. on the high-yield, we are neutral, but being really cautious. a lot of these companies won't qualify for the fed's program. we do look for defaults to pick up maybe as high as 10% in the speculative defaults, and we think recovery rates are going to be low. so particularly with the ccc's and the very low rated bonds, we

would definitely be out of that. jonathan: this is the pain trade, and we saw it play out in europe over the last 10 years. once the central bank gets involved in an asset class, it is totally divorced from fundamentals. we saw that over the last 10 years. i do wonder whether that is the playbook this time around, or whether things are somewhat different. kathy: you can't have fed money -- lisa:g bankruptcies you can't have fed money preventing bankruptcies. that is what i am struggling with, the people are putting up more money to stay alive. at a certain point, the time runs out. i guess that is my question. what is the tipping point at which these company's become insolvent, and no amount of fed backstop can help them? kathy: i thick it is coming. i think it will probably materialize later this year.

we are not seeing the revenue pick up a lot of these companies need. short-term market has deteriorated pretty quickly. i think it is coming later this year for the really low rated credits. this has been the initial euphoric move of recovery off of treasuries,100 over and now they have come down to something closer to realistic, i guess, given the backdrop. but even if the whole country opens up, and even if we start to see a recovery. can't of these companies make it. they will not recover to profitability anytime soon, and i think their leverage ratios have just gotten to out of control. i think it is coming probably late this year. , we will kathy jones continue the conversation. kathy jones of charles schwab. we talked about the focus on

liquidity over the last couple of months, going to switch to solvency pretty quickly, and arguably is already happening. lisa: even though we are seeing bankruptcies, not getting priced into the degree. we had seen that bifurcation, but it is starting to shrink. jonathan: equity futures up 33 on the s&p 500. we can't you down to the opening bell in new york city. next up on this program come on reopening, the mayor of boston, marty walsh, coming up. this is bloomberg. ritika: with the first word news, i'm ready. police and hong kong fired pepper spray at hundreds of pro-democracy demonstrators today. it was the first time in months that protests have broken out. the protesters were marching against china's new legislation that would give beijing more control over hong kong. around 300 people were arrested. ecb president christine lagarde called it a worst-case scenario for the euro area economy this year.

lagarde says output in the region is likely to shrink it percent to 12%, in-line with the ecb's more pessimistic forecast. aboutou're really talking an economy in the euro area that is, in one year, going to shrink more so than it has during the great financial crisis. estimatesgarde says for a mild scenario are out of date. in the u.k., prime minister boris johnson faces more pressure to fire top aide donna cummings. -- top aide dominic cummings. the prime minister faces an hour and a half a questioning from senior lawmakers today. bloomberg has learned that amazon is in talks to buy driverless vehicle stocks in -- in zugs.

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. ♪ ♪

♪ override anyi will governor that wants to play games. if they want to play games, that's ok, but we will win. we have many different ways

where i can override them, and if i have to, i will do that. jonathan: the president of the united states weighing in on reopening places of worship. unclear whether he has the power to do just that. certainly some tension between the president and the reopening process in various states. in the market this morning, we continue where we left off yesterday. we add some weight to the s&p 500, advanced by a little more than 1%. in the bond market, treasuries just a little unchanged. the 10 year at zero point 73%. a stronger euro gets my attention, positive by around 0.3%. from new york city, good morning to you all. alongside lisa abramowicz, i'm jonathan ferro. a lot of optimism over the last couple of of days about how butkly we can reopen, also how quickly we can get back to normal. lisa: if you look at the pictures over the weekend, the

, asemic is over, apparently everyone gathers in crowds and pools. my question is, are we going to see a second wave of infection in two weeks that will reverse what we think, or perhaps give fueled people thinking that some of the lockdowns have been overdone? ultimately, it will be one of the determining factors of what is to come this summer. jonathan: let's have that , onersation on reopening that very topic. the mayor of boston joins us, marty walsh. fantastic to have us with you on the program. i would love to get your thoughts on this. there's lots of discussion over how quickly we should open up at the state level. can you talk to us about the city level, why boston needs to go at its own pace? lisa: thank you for having --mayor walsh: thank you for having me this morning. boston is a very densely

populated city. every day in normal circumstances, our city doubles in size when people come here to go to work. addng college season, we 150,000 to the city of boston. what i want to make sure is that when we reopen, we get it right. i am concerned about a second surge, and i don't think our economy can necessarily handle a think it is, so i important that as we reopen, we do it in a very thoughtful, methodical approach so that we don't have to shut down again. of then: in terms education system, let's expand on it. what is the city prepared for in terms of how quickly we can get schools reopened? mayor walsh: the colleges and universities are having conversations now. some have already made statements that they will be back in august, and i hope they

are. they are talking about doing massive testing and tracing, and also potential self-isolation if somebody tests positive. it is a big part of our economy in the city of boston, a large employer, and these students are spending a lot of money in our city. it would be great to see schools open, but the way that is really important for me as mayor is to make sure they are healthy as well. this isn't health care versus the economy. this all has to be together. public health is vitally important right now. over 300,000 people have lost , 100,000e in the world in the united states, and quite honestly, if we didn't take all the precautions we did over the last three months, that number would be far greater. in massachusetts, we are the fourth highest state for the number of cases in the third-highest for deaths, and that is not where you want to be. it is important we continue to

take this seriously. now is not the time to let our guard down. wonderingmayor, i am whether reopening plans can be determined locally, city by city, or whether in order to be effective, they really have to be federally coordinated. mayor walsh: i don't think they need to be federally coordinated. i think they need to be state coordinated, and in massachusetts, we usually go by cities and towns, but you can do it by county. in massachusetts, two of the highest counties with the number of cases are middlesex county and suffolk county. we are in suffolk county. middlesex is next door. approachoking at the new york was looking at, letting some counties open in suburban importantit really is to think about being thoughtful when you think about reopening. you can't just blanket reopen across the country. massachusetts, michigan, new york, new jersey, the highest

states, the challenges are a lot different than in wyoming, south dakota, and kentucky. so i don't think it can be state-by-state. country, i by the should say. it has to be state-by-state. also sharing best practices. i watch what is going on in seattle, l.a., new york, houston, and chicago, and i make my decisions sometimes based on what they are doing, where they are in the surge. they follow us, and we follow them. it is about sharing best practices. lisa: based on your experience with the virology, i am wondering whether you think that the data backs up the reopening enthusiasm we saw across the country over the weekend. data walsh: i think the backs up the reopening if you follow it. i think it is not being followed consistently across the country. the data shows that we

don't have 14 day declines, and people are feeling the pressure to reopen. can feelate that, and the pressure sometimes, but it is about doing the right thing. there's no difference between reopening and shutting down. you make a decision to shut down a city, which not many people have had to do in the last 100 years, it is a difficult decision. as with think about reopening, all of the work we've done over the last three months, whether it is in boston or the ozarks, you can't just let that go by reopening because people want to be out in the sun. the data will show us again if there is a second surge, and that could be worse than the first one. that's where the problems will come into play. jonathan: they are walsh, just in the 45 seconds we have left with you, i think it is important to touch on austerity. the good news is the budget was in good shape in boston coming into this crisis. coming out of it, there is a real fear about state and city level austerity. could you set expectations for us appropriately? lisa: we had 7 --mayor walsh:

we've had seven years of incredible growth, city of boston. we will preserve the important pieces of the budget, education and housing, but we still have to have a balanced, responsible budget. there will be cuts across the board and the city of boston. our final budget will be voted on sometime in the next three weeks. we are working with our boston's city council to come up with the final product. hopefully we get out of this safely, and next year move back to prosperity again. jonathan: i hope this is a conversation we can continue. i look forward to doing that with you on this particular topic because i think it is a really important conversation. boston's mayor, marty walsh, on reopening in boston. as we count you down to the open my we are in good shape here. up points on the s&p 500. a similar mood to yesterday, a real cyclical tilt to some of the price action. too.onger euro in the mix,

up next, lori calvasina of rbc capital markets on this equity market. from new york, this is bloomberg. ♪ staying connected your way is easier than ever.

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>> 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. >> 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 surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ." alongside lisa abramowicz, i'm jon ferro, with tom keene out today.