detached from protesting riots. stronger to and through a 112 level. we begin data on american jobs depression. an appearance in last night. a reality of, as protesters protest past curfew. protest dominate over writing and looting -- rioting. after 18 years, the self-described defender of western civilization, steve king is out of iowa and pastor ela jones is very much in as the first black mayor of ferguson, missouri. good morning, everyone. "bloomberg surveillance." from london and new york. beautiful weather in new york as we begin three days of a grim

jobs report and the satisfaction. to be honest, 5:00, 6:00, 7:00 was extraordinary and there was a sense of maybe things will be calm or by 10:00 p.m.. -- calmer. francine: i know it is just ordinary for a foreigner to see the scenes on the street. the focus now is on what this means for the prospect of president trump being reelected and what it means for social equality going forward. i know we have a lot to talk about and we will talk about that shortly. havens, a huge risk on the markets. be didlian issue, the bg quite well this morning. we need a news briefing from new york city with our first word news. >> good morning. thousands of people took to the

streets again across america to protest police brutality. less violent.be unrest over the killing of george floyd, a black man in custody. the pentagon is distancing itself from president trump morning that he will use active duty military to clampdown on protest. he said it would be better to rely on the national guard for more enforcement when needed. still some active-duty troops have been put on alert for possible deployment. most likely in washington. european union looking to boris johnson to prevent a no deal brexit. negotiations on a deal between the eu and the u.k. are deadlocked and talks are set to end friday. the eu is pinning hopes on a dramatic intervention by johnson, he meets later this month with eu officials. barrel forove $40 a

the first time in almost three months. ,here are signs that opec agreeing on a short extension of their deal. several other nations favor extending production cuts by one month. they are sent to start easing in july. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in this is countries. bloomberg. francine, tom? tom: thanks so much. i am not going to give you the details on the daily check. you can look at them on the screen. the vix does not go through the new levels. but with abe 25.72 26 level, they are getting there rapidly. nasdaq really closing in on where they were valentines in another time and place. a major message is safe havens really in retreat. euro smithy to a 107th signals

weaker. francine: we were just talking about it and it is pretty significant also because there is quite a lot of belief that the ecb will do more. it is less dovish and markets are expecting, watch out for bond spreads. i am looking at dollars thinking to march low. treasuries are dipping with gold. it gives us a sense of what we could see. i want to show you brent because is -- it is extending its rebound. brent is probably the one to watch out for more because investors are eyeing the potential extension of record production curves by opec. tom: absolutely amazing to see that. aware,ust so you are three barrels of oil into her living room. they paid her $20 each to take the barrels and she leveraged that making out like a bandit at $40 per barrel.

our coverage for our international audience and for those of you that looked at economics finance and investment through the politics of this nation. kevin has done exhaustive reporting in washington. reporting is different in some of the stereo we have seen in the news. we are thrilled that he could report right now. i will cut to the chase, the president seems to be up for one photo op per day whether it is an episcopal church or a catholic memorial to pope john paul ii. what will be the follow this wednesday? >> i think in terms of where the president goes from here, the protests from last night have taken a turn in terms of the sense of calling -- calming across the country. the president will double down on the notion of law and order. yesterday late afternoon, i spoke with a senior level source

on the president's reelection campaign and had an open conversation in terms of what the strategy is coming from the reelection campaign and from the white house. what the source told me was the issue of law in order, while it might not resonate for those living in cities, especially cities where helicopters are patrolling throughout the might --quell writers -- writers rioters, in another part of the believe that issue they will allow them to get reelected. the biden campaign has disagreed entirely. i get that. i think that is ancient american politics going back into the 19th century. if there are 45 battleground states, who has the upper hand .- four or five

the democrat or the republican? >> i think the biden campaign coming out for joe biden speaking at church in philadelphia and demanding racial equality and structural changes. he also came out with a series of policy proposals that would require for police officers all around the country not to be able to use certain tactics in terms of a chokehold position. all of that is being discussed. the naacp has endorsed several policy changes that they would like to see changed. we had talked about this. nextlly had my eye on the round of economic stimulus. i spoke with a source yesterday who told me that they believe by the end of the month that could happen. i am hard-pressed to find a source right now who would suggest that the next round of economic stimulus does not

include some type of language in it for structural change as it relates to so many of the issues that have been protested about throughout the country. suggest: you seem to trump's reelection chances are not is dwindling as some people think. when do we have more of an idea of whether that is true or not? are there certain sets of polls that we should be watching out for? >> first and foremost, the president's approval is above 50%. for any president to have a disapproval rating above 50%, that has forecasted trouble in terms of reelection efforts. the second point is that you are correct in the sense that in terms of the political coalition , the democrats have largely aligned themselves with the progressive african-american communities. as republicans traditionally align themselves with the police community.

in that sense, those are the campaigns from a purely political matter. both are the campaigns -- of the campaigns are communicating in such a way that it is not different. the final point i would note here is the way that the is night and day in terms of how the protests are playing with individual suburbs and rural communities watching them on the news. tom: i think you're absolutely right. clearly the polling shows that and i think certainly the huge tv ratings as the nation's galvanized to this. the younger president bush wrote an essay yesterday with ms. his bush -- ms. bush. they talked about a better future. what does that do to texas politics? the president in a purple state is ahead by three or four percentage points, could you imagine that george w. bush

could tilt texas to biden? the bushk that contingency of the republican party is alive and well. i think the bush contingency has been becoming increasingly more vocal in the last year and i think that they are playing a long long game in terms of in 2024 andlections 2022. i speak with many individuals who have close ties to the bush political arm. trump and between bush has been festering for quite some time. i would only anticipate that it continue. --ould take a state further step further. they have clout in national elections. for the president to get reelected, he will need the bush

contingency to stay on board with him. tom: kevin, thank you so much. we greatly appreciate it here in new york and london as well. today, as we have conversation we had earlier this morning and for the next number of hours is just extraordinary. romerpaul warmer -- paul will join us, the laureate from new york university on the challenges in new york -- america. stay with us. this is bloomberg. ♪

tom: good morning, everyone. "bloomberg surveillance." as we mourn, all of the world mourns. a tragic death at harvard, a terrific interview for me with his sense of society and linkage back to economics. his work is like that of paul romer. he is the laureate from new york with procedures work in chicago. we are thrilled that he could join us this morning. paul romer, robert talks about a good society. that is what the professor always strove for. with have a good society the massive inequalities that are clearly evident in our use in productivity with technology? paul: one of the things that we should always keep in mind is that there are ways for us to

all be better off. this is behind the notion of trade that we talked about. both sides can benefit from trade. especially in a time of economic recession or depression. we need to remember that there is a path forward where we all benefit. and there will always be concerns about inequality. there will be concerns about underlying problems like racism that have surfaced in the last few days. but we need to keep those concerns from dividing us because if they divide us to strenuously -- too strenuously, we lose that chance to pursue a strategy where we are all better off. romer, what is so important here is the unfairness or inequality of it all. good policy change inequality? -- could policy. ofl: we see different levels

inequality in different countries. inequality is a choice that a nation makes. there are trade-offs. you could get less the quality. it typically takes higher taxes and more active role for the government. the nation can choose more taxes, more transfers, more support. it can choose less. must be anut there equation. i know it depends on societies and citizens expectations. given what we are seeing right now, what is the right balance for this? extent, thisrge question about what constitutes a good society is something that voters have to choose and they express their preferences, the politicians act on them. economists cannot tell you.

this is the moral appropriate level of inequality. we can tell you, this is what will happen if you try x or y. i think we can make the case that levels of inequality and the deprivation like we are seeing right now, some people come so angryate, discouraged, that the viability of the whole system comes into question. even if you are an affluent person who does not care about those who are suffering, you may want to reduce the suffering because there is a risk that the whole system will come crashing down. francine: what do you see as a problem in america right now from an economic point of view? is it redistribution? is it jobs and an employment rate, or good quality jobs? paul: the most pressing problem

we are facing right now is very high levels of unemployment caused by the pandemic. inequality because the people suffering most in terms of loss of jobs are people in the bottom end of the income spectrum. economic recovery would go a long way toward reducing the widening inequality because of the pandemic. tom: paul romer with us. i want to come back and quizzed him on the trade regime of the united states while we have president trump and at some point after president trump -- quiz him. an important conversation as we look to the horrific jobs report on friday. the conversation with the former president of the new york fed. please stay with us with paul romer.

this is bloomberg. ♪

tom: bloomberg surveillance this morning. futures up is a nice feel to the market. last nightwas calmer then what we saw the evening before. we are in conversation with paul romer of new york university. ofther it is the robustness

thomas or michael's wonderful work. all of you seem to be studying uncertainty. we have immense uncertainty right now. how does that impinge our chance to get to a better america? paul: everything that will make things better requires investment. somebody has to put resources up and invest them for a plan to .ire more people, reopen all of those investments are postponed when people feel there is too much uncertainty. an investmentking now, the natural temptation is to say i will wait once the uncertainties resolved. everybodyy can hold back from making investments. that uncertainty can start to feed on itself because if everybody is uncertain, everybody holds that -- holds

back, that creates more uncertainty about will there be a recovery and we need to cut through that and this is where government action can be so powerful. mentionedromer, you when we began our discussion be gained -- the gains in trade. we have become a multilateral to bilateral or what i call trump-lateral as well. can america get back to bilateral relationships in a multilateral world? paul: the first thing is we are not going to see more openings in the way we saw over the last two decades. the best we can hope for is to say trade is the share of gdp, the remain of constance. we may even see some reduction in trade. one of the consequences of this pandemic will be greater awareness of the exposure that each nation faces because of these international cups --

supply chains. i think many nations will react by trying to enhance their domestic productive capacity in case they run into another situation like this where they cannot make masks or they cannot produce something they need in an emergency. it is going to be a challenge to keep trade as a fraction of gdp. paul romer, thank you so much. greatly appreciate it this morning with new york university. normal, andback to we get back to 731 as well. theticed that a newswire at warner music ipo with an up feel they are. we have gotten all sorts of indicators within the market as well. toeally important linkage that with futures up and safe absolutelyetreat,

nailed the recovery that we have seen. christopher verrone, he has just been outstanding on some of these trends off of the march volume. hero join us -- he will join us. thank you for being with us through the morning as we report on the politics and investment of america. -- this isbloomberg bloomberg. ♪

>> this is bloomberg surveillance. let's get your first word news. america caught a break last night. thousands demonstrated over the death of george floyd, a black

man in police custody. there were fires and looting that marked the last few days of protesting. some of that may have to do with curfew and the arrival of the national guard in a number of cities. the president says the republican party is being forced to seek a new city for its convention. it is planned to be held in charlotte in north carolina in the august -- in august. one party official says the president may make his acceptance speech in a different city while republicans conduct convention business in charlotte. in iowa, congressman steve king lost in the republican primary. he had been rebuked by party leaders after making statements about race and immigration. he had also been stripped of committee assignments. brazil had a record day of coronavirus deaths. latin america's largest economy reported more than 1200 deaths

yesterday. that brought the death toll to almost ready 2000. brazil has become the epicenter of the disease in the last few weeks. the president has resisted social distancing efforts. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in this is countries. bloomberg. tom: thanks so much. we welcome all of you worldwide and across the nation to "bloomberg surveillance." we have a lot of covers this morning on the politics at the moment. a calmer evening in the major cities of america. no question about that last night. the labor economy, a hallmark. we are looking for the friday jobs report. right now in the upmarket, , the alchemyerrone and mystery of technical analysis. in thebeen shockingly on

growing confidence of this market off of the march blows . youe joins us now -- lows have climbed on board the small cap wagon. is small cap catching up to the absolute performance of large caps or is it going to be a true relative shift to small cap outperformance? christopher: i think the first part of that question is easier to answer. there is definitely a catch-up trade underway. i think there is more to go in the direction of small versus large. durability,ong-term i think the jury is still out. there are three things we care about. number one, close out of small caps are so dramatic where they are still the contrarian call. we like that. secondly, small caps can peek on for during with the s&p. they peaked two years ago. they have been in a bear market

for two years. they went down 48% from the highs. that is a proper bear market in terms of price and time. thirdly, i am not sure many really understand the extent to set whichconstituency has changed so dramatically. this used to be an index of banks and energy stocks. not anymore. index, healthcare stocks and software stocks. -- cap down the scale scale makes sense. here, theis so great giants of the past, it is great to get on a trend but it is really important to get on a trend that is unloved. is this the most unloved uptrend you have ever seen? i think that is

because it is so difficult for reconcile what we see with small business. conflate that with small company stock. i want to emphasize they are two different things. it is not uncommon in the early days off of a market low for the economy and the market to be doing to complete we different things. that is what one would expect coming through a recession or coming off a market low. trade in a lot of respects for small-cap stocks is probably up in a relative sense. this week something remarkable happened. you had 93% of the russell 2000 trade above its moving average. that is so remarkably rare. that really only happens coming off some of these major historical bottoms where you get these big momentum surges. that is a signal i will want to respect looking down the cap scale. francine: a great piece on the bloomberg terminal that basically says this is the most

hated rally in history but it just will not stop. what will it take for it to stop? questioner: this is a i get posed every day and i have thought a lot about this. in weako remember that markets or bear markets, it is always the worst groups that could hit the most. i think what we ought to watch here are new signs of stress emergency, what the weakest links are doing. what have the weakest links this entire time been? they have been energy and discretionary and banks. i think that is ground zero. if we are wrong with our view here, and this is going to be a much longer bear market, i think you will see cracked emerged in those first. a lot of this was a credit event in march. credit is stable. it isenerously, i think getting better.

i think we need to watch credit and those weakest links. francine: the premise of this rally is that the economy will slowly,gradually, but but that there will not be another fall back and recession. are the economists looking at? christopher: this has been the most remarkable bottom in stock prices that many of us have seen in our careers. i don't want to confuse the message of the market with the message of the economy. we look at 2009 as the most recent example. you have a remarkable market v bottom oftrue lows. that what the market is doing must mean you are going to get a v economic bottom. they are often very different. it is important to remember

historically, markets always bottom before you get to the worst of the data, before you get to the worst of the news. take 2009, market bottom march of 09, you have seven more months of negative payroll an awful jobs report through 2009. i don't think we should lose sight of that, the market will bottom before you get to the worst of the information. tom: what is the technical construction right now of these stocks that never go down? , i think jim has a technical spelling. christopher: they are firm. this is interesting. i think saying it is lumped into almost this asset class. we almost consider it an asset class. when you look under the surface, all of these stocks are doing

something differently. take facebook. they have not gone anywhere in two and a half years. it has not changed since fourth quarter 2017. everys not true for stock. i look at facebook sales, it has gone nowhere for two and a half years. it is just starting to break out. i think that is reemerging as the leader within those stocks. you touched on a good point. some veryd, you have strong, on the other hand you have small caps getting better. that sounds like participation broadening out and i think it is something investors have been creating for the last three years. on: i am not too big rebalancing. anybody that follows me knows that. i am not a fan. where is christopher verrone on rebalancing? can you rebalance based off of charts? christopher: rebalancing is this moment where we get away from

the russell rebounds. it is implicitly bullish because large-cap index and put them in small caps. there was always a little bit of bias around a rebound, i would want to be aware of that. i think is important when we think about how these indices change, healthcare is presently 25% of the russell 2000. three years ago, it was 10%. think about how that sector has changed its presence down the cap scale. you cannot say, i like healthcare, but i do not like small caps. have to leave it there. christopher verrone, thank you so much. later, the laureate paul romer and stephen king

before hand. in about one hour, a conversation with a -- the president of the rode. from london, this is bloomberg. -- president of the world bank.

>> this is "bloomberg surveillance." from london and new york. week, meant to be this saudi arabia and russia are joining the hardline. brent reversed earlier gains after topping some $40. joining us from london, is our bloomberg oil strategist. ons is political infighting

quota reaches and things like that. how much is the oil market rebounding? cutsuch more production does the oil market need right now? >> i think the oil market is slowly rebalancing. the problem is the lows in the last couple of months have been massive when supply has been running ahead of demand. we need a period in which we have demand running ahead of supply in order to bring those down. i don't think we are anywhere near that yet. demand is slowly recovering but that recovery is patchy. china,seeing a pickup in but we are not seeing it too much in europe or north america and perhaps not in much of asia or outside of china. --still need outpoured output restraint.

frankly, what is going on with is amusing toment most people outside of the organization. mean thecounted meeting forward only to spend today's wrangling over whether they would do or whether they comply.t do tom: this has to be one of the great missed calls. $50 per barrel down to whatever statistic you want to use and this elastic bounce back we have seen. misjudged the micro theory, the price theory of supply and demand during this debacle? the battle -- >> i am not sure it has been

quite so hugely misread. we have had a collapse in oil demand. this is unprecedented. we have never seen a situation before where it is a matter of weeks, oil demand has gone from being 1% or 2% above the previous years level to perhaps as much as 30% below the previously year's level. that demand collapse was unprecedented. seeing aery we are degree of wishful thinking in the speed of the recovery. there are voices suggesting that prices are getting ahead of themselves and that the recovery in demand is not nearly as strong and widespread and well entrenched as it needs to be yet. on the supply side, while the

first month of the opec plus output cuts look reasonably good, there are clearly divisions that are coming to the surface now within the group and there are suggestions that some cuts aren-opec cups -- beginning to future out. francine: i'm seeing reports that global fuel demand will not recover until 2024 to three viruslevels -- pre levels. if that is true, what will happen from now until then? >> the moment it is set to run until april 2022. that is a long way ahead for the group to be putting in place any kind of an output agreement and it will clearly have to be revised many times between now and then.

opec has been managing oil 1980's. since the early they can continue to do that as long as the political willingness is there for another four or five years without problem. the difficulty is going to be having made this group so much bigger, whether that willingness is going to be there in countries like russia to continue to restrict output as necessary for many months to come. francine: julianna, thanks so we are getting breaking news out of england saying that banks need to prepare for a no deal brexit. of talksa second wave between the eu and the u.k.. the european union will not try to convince johnson through our own reporting to forge a compromise later this month in

an attempt to stop the u.k. from breaking away from the trade deal. the bank of england saying banks need to prepare for a possible no deal brexit. withg up, talk covid-19 johns hopkins assistant professor. this is bloomberg. ♪

francine: this is "bloomberg surveillance". facebook ceo has been backing censorer the decision to several trump's from president trump. a number of employees felt it violated policies against violent rhetoric. they said the post clearly did not incite violence. anior lenders are negotiating bankruptcy loan taking place days before a crucial debt deadline. pnc is trying to come up with a plan to turn around the business $100 millionmost of debt. more music delayed. the company wanted to avoid selling shares on a day the music industry has set aside to support protests against police

brutality. the sales could value warner music and more than $13 billion. and that is your bloomberg business flash. francine: as we continue to track the virus, bloomberg has developed a partnership with the leading authority on covid-19. johns hopkins has been on the forefront of the responsibilities and every day bring you insights from public health, infectious disease, and emergency preparedness. joining us to discuss all of this, professor of emergency medicine. thank you for joining us. we look at the protests for the last week in the u.s., how does that impact how you deal with covid-19 and the covid-19 response? >> that is a great question. exposedal covid 19 has systematic injustices that people of color are suffering every day. well over 25% of the known

covert related deaths are in african-americans. -- covid related deaths. looting, thesed events are places where the virus can spread easier. you see places where yelling and singing and chanting or coughing and sneezing from tear gas or pepper spray, all of those things can further spread virus or calls transmission events. on top of that, all of these are large gatherings so we know that while these protests are important, they are also going to be transmission events and we have to be ready for that. looking at some of the figures, it seems that black americans are dying of covid 19 at three times the rate of white people. do we know why? i think part of it is due to general injustices and

systematic iacs in our medical system. i think there is a lot more to learn about who gets sick and dies from covid-19 on a critical level -- clinical level. we know covid-19 is good at exacerbating underlying systematic challenges and injustices. seeing a group of americans who are already negatively affected by the existing healthcare system and the existing inequality in the united states and covid-19 is exacerbating that. francine: if we get a second wave, when will we know that it is hitting us? what timeframe are we looking at? toren: second waves are hard predict given that our toolkit is still limited and we do still have challenges with testing. we are expecting to see a second wave and we talked about before,

these protests will continually -- potentially speed up the timeframe. there are places reopening and i think those may be happening for we are actually ready to manage another increase in cases and so people are going right back to what they did before covid and those are the places that we are second waves quickly. it is still too early to know exactly when we will see a think there but i are going to be cities across the country that reopened quickly, going back to normal and are going to see large jumps in cases. we have to keep an eye on the hospital system and the testing data and if we start to see those numbers creep up, we may have to reimplement some of the

approaches we have taken previously. thankne: lauren sauer, you so much for joining us. out bloombergck for the latest information and conversations with johns hopkins and battling covid-19. coming up, more "bloomberg surveillance" simulcast on bloomberg radio and on television from here in london. this is bloomberg. ♪

♪ if a city or state

refuses to take the actions necessary to defend the life and property of their residents, then i will deploy the united states military. >> the country is crying out for leadership that can unite us, leadership that brings us together. >> the political risk environment usually comes from the rest of the world. >> this is "numbered surveillance -- this is "bloomberg surveillance." jonathan: for our audience worldwide, good morning. this is "bloomberg surveillance." i'mgside tom keene, jonathan ferro, together with lisa abramovitz. we focus on the following, the peaceful protests gratefully demanding change, replaced by riots overnight. there's a real hope this wednesday morning that we have finally broken that patterns and we can focus on the former and not the latter. tom: i love the way you put