, the bulls may defeat the bears in the battle space. the s&p 500, just 7%. gold prince under $1700 per ounce. there is an american job depression, claims this morning estherlieutenant colonel does not see a quote, dire situation. unitel mattis says we can without him. -- american cities and towns are not battle spaces to be dominated. good morning everyone. bloomberg surveillance from new york and london. i am tom keene on the edge of central park and the uppers east -- and the upper eastside.

much quieter protests around new york and across the nation. subsumed by the absolute bombshell reporting and essay last night by general mattis in the atlantic that truly stopped america. and i think the broader question is whether this will have repercussions for president trump and his base or certainly with republicans, whether the president has crossed the line and what this means for the military. we talk about martial law and the next steps. tom: many other things going on as well. we are really focused on what could be an original ecb meeting at 8:30 new york time and christine lagarde's important press conference and q monday -- and q&a.

right now with our news in new york city. formerident trump's defense secretary jim mattis is condemning his former boss in a scathing letter. saying the president misuses the military. he says they must reject those who make a mockery of the constitution. president trump responding on twitter, saying he did not like his leadership style or much else about him. meanwhile president trump seems offense topy with's kotik. -- with defense secretary esther -- esper. in crete --sts expect the european central bank to increase monetary stimulus.

warmed --lagarde has warned that -- in hong kong, lawmakers have passed controversial laws banning residents from disrespecting china's national anthem. that adds to fears that beijing is tightening its grip on the former british colony. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. tom: very good. thank you so much. finally aight now, pause on equities. 30 year bond fractionally a little bit higher but just sort of a pause on a thursday with the extraordinary risk on feel.

gold has spent a lot of time below $1700 an ounce. francine? francine: if you look at treasuries, they are pretty much steady. before the ecb announcement on its policy decision which is why i wanted to look at the italian 10 year yield. if you look at how the spreads have been compressed over the past couple of weeks, it is pretty extraordinary. it has been exceptional gains in the past week. not only now turn to the ecb but washington where u.s. employment data will signal the extent of the damage to jobs and that will move the markets. tom: very good. welcome again all of you, worldwide and we must look first

to america. kevin cirilli joining us, our chief washington correspondent. what will the president do today? he has been quiet on twitter in the last 24 hours. kevin: i think we will hear more from president trump today, especially now that there is this open discussion about the use of the military and his comments regarding that. yesterday i spoke with a former senior advisor to a cabinet member in the intelligence community who told me essentially that the president's comments this week, particularly pertaining to the military, has sparked open discussion about the president's strategy, tactics and rhetoric. beyond that i spoke with a republican member of congress who said the president still very much enjoys the support of the republican party in both the senate and the house even as a handful of republican senators have come out and expressed their discomfort with the president's rhetoric. tom: the president's rhetoric

has led to an extraordinary moment in history. we have seen from the secretary of defense, the chairman of the joint chiefs of staff and arguably our two most distinguished retired elite military forces. is everybody else on board with them kevin? how much of the military is rallying around these individuals? kevin: i will take it from the source i spoke with yesterday who described to me that for the most part, the military, those iferals in particular, even they had concerns or frustrations with the president's tweets, had always been willing to keep their comments to themselves. within the past five days in particular, that significantly changed. beyond that, in terms of where this goes, senate majority

-- stilltch mcconnell has prominent republicans such as senator ted cruz, so i say this cautiously but i say it because it bears repeating, that the reality of -- and the experiences of people living in the cities, especially in the last week is very different than the reality of people observing what is going on in the cities through the lens of cable news. while this situation has evolved quickly, we should note that the peaceful protests in washington, d.c. were largely peaceful last night. that is a continued trend we have seen throughout the country. francine: if the president still has the support of a lot of republicans, does it change anything in the polls? the generals came out so

aggressively. kevin: some backstory in terms of former secretary mattis. they had departed on rocky terms to begin with. but is not necessarily a criticismthat that was announced. in terms of political ramifications, what i would say is i think it is too early to tell. disapprovalt's rating has continued to go above 50% which spells trouble for a candidate. tom: thank you for the reporting, kevin cirilli. perhaps an eventful day for the president of the united states. we will have an eventful 8:00 our. francine and our team in europe really focused on what is going to be going on in frankfurt and the ecb. we will be focused in america on another grim report of jobless

claims. stephen stanley of amherst pierpoint. this is bloomberg. ♪

tom: good morning. bloomberg surveillance. francine lacqua in london, i am tom keene in new york. the adp report yesterday, what some people really lean on and others don't, went from grim grim grim to just grim and everybody cheered. stephen stanley is working from home. a mantle in his living room holds up all of the trophies he has won for forecasting the

economy. good morning. andms today will be grim, that leads to the unemployment report. with the better adp report yesterday, did you tweet -- tweak and adjust to a better jobs report tomorrow? stephen: i did not. those who is not a big believer in adp. i would be happy if the number comes in in line with adp but i am still looking for a 7 million drop in payrolls in may. tom: one of the things floating that is different now, we got rid of a lot of low-wage people in restaurants and bars and now we are starting to get rid of a different kind of american employee, salaried fully benefited employee. is that true? there iscertainly going to be some of that along the way.

there are so many businesses that are going to have to alter their work structure and basically change their footprint. say howlittle early to things are going to pan out on a permanent basis. i do think we are going to get a lot of workers coming back over the next couple of months. we will have to see when the dust clears. it is early to say, but i think there are going to be areas of the economy that permanently lose jobs and there will be other areas that gain them. francine: where do you see it first? if you look at a v-shaped recovery of jobs coming back, what are the sectors that will pick up the quickest and do they give us an indication of the worst impacted sectors? stephen: as the economy reopens, they will be industries that come back and some will come back weaker than others. the tough ones you alluded to, the restaurants and airlines,

spectator sports and things like that are going to be very tough puzzles that are going to take a while to figure out but then there are other things like doctors offices and dentist offices that were closed and stuff like that should open up pretty quickly, so i do think we will get a lot of service jobs over the next couple of months and then we will just have to see what the economy looks like in terms of a new normal on the other side. francine: have a lot of the people that have lost their jobs actually had a safety net, or is this where there is real failure in the u.s.? stephen: the numbers we got last friday, the personnel numbers were interesting because personal income went up. what we found is at least based on the government numbers, between the rebate checks and unemployment benefits, government transfer payments were about three times the loss

in labor income. you could think of it as the government basically supplying people with three months worth anday on a one-off basis, the question is will that hold out long enough for the economy to get back on its feet? so far, so good and i think people have spent some of that but savings rates are spiking up. people have some money in there accounts to tide them over. we will have to see how quickly before those benefits start to run out. your jobhen stanley, is to get out three months, six months and a year outfront. politicians want to know what happened two minutes ago and what they need to say or do in the next two minutes. going to be enough to jumpstart policy actions in washington towards americans without jobs?

stephen: i would not bet on that. the divisions in washington are deep-seated. it hasbeen a time when been very difficult for the two parties to come together with common solutions. i think the first cares act was an example where there was quick bipartisan agreement. i'm not sure the cares act was perfect but it certainly got a lot of money out the door quickly. the second piece they are working on now is the second cares act, if you want to think of it in those terms, the divisions are much greater and they will come together on a few things but it is going to be tough to come to comprehensive agreement because the ideological differences between various areas are starting to take control of the debate.

thank you so much, stephen stanley from amherst pierpont. stay with bloomberg for our live coverage of the ecb that starts at 7:45 in new york, 12:45 p.m. in london. this is bloomberg. ♪

ritika: this is bloomberg surveillance. i am ritika gupta. is a target google

of u.s. antitrust investigations. a website spoke with state and federal officials. -- was asked about how to potentially limit google's power in the online search market. google says it continues to engage with the investigation. america's largest private company will no longer release its quarterly earnings to the public. they say they want to focus on long-term strategy. the company is the world's biggest agricultural commodity trader. the two british institutions that dominate hong kong's banking system are backing china's proposed new security law. they are endorsing a proposal that critics say will diminish the city's freedom. the british government has expressed opposition to the crackdown. that is the bloomberg business flash. francine: thank you so much ritika.

we are back with stephen stanley, amherst pierpont chief economist. talking about what we can expect today and tomorrow. what are you expecting from the ecb? officials are expecting quite a lot today. how disappointed will they be if they don't get what they want? stephen: the markets are definitely expecting an expansion of the qe program. as you say, if we don't get that, it will be a disappointment. most market participants are assuming that central banks are all in. whatever it takes, they will get it done. do somethinges not today, they will be initial disappointment and presumably at some point they will come back and say they will give it to us at some point if we needed. francine: how much it is -- if we need it. francine: do we need monetary policy now or is it the start of

the recovery phase, or are we still in the midst of the downturn? the news so far on the virus has been good and the reopening has gone well. there were still a chance of a second wave but i think the odds of a bad scenario have diminished to some degree and you have to imagine as medical research continues, we will he better prepared if we do get a sec -- we will be better prepared if we do get a second wave. what is interesting about monetary policy right now, particularly in the u.s., the fed started out with a bunch of programs designed to get the markets back on their feet. financial markets were not functioning properly. they have been wildly successful in that. risk spreads have come in. corporate issuance has been coming in at a record pace. stockmarkets obviously going up. they also came out with programs

to try and get money out to real people. those are just getting off the ground at this point. the fed has been effective at plugging the financial market problems, but they haven't as of yet gotten money out to the real economy. i think that is what they've got to be focused on right now, not your traditional monetary policy questions but some of these unprecedented programs to lend directly to economic agents. stanley, you have a very pragmatic view of economics in your forecasting, i would suggest it centers on proven behavior. do we come back to the normal american consumer, or do we come back to an american consumer forever changed? stephen: that is the big question. it is more of a psychological than economic question but

history is on the side of eventually returning to normal. the early evidence in my mind is encouraging. when things reopen, people come back. look at all of the anecdotal and high-frequency data on consumer behavior and it looks like the reopening is having a big effect in terms of coming back and spending. there will be some people who are hunkered down but most people seem ready to get out there and kind of resume their lives. if we can get through the fall and avoid a bad second wave, eventually we get a vaccine, that is the quantum leap toward normalcy as well. i am optimistic that eventually it won't happen all at once but say a year from now, two years from now, things will get back more or less to the way they were. tom: very good. stephen stanley, thank you so much.

we love having him on with what i would call a measured forecast of the view forward. the view will have some clarity this morning at 8:30 and then tomorrow, the jobs report will give us a lot more clarity into this month of employment as well. coming up, incredibly well-timed. one of the firms that measures the military of america. please stay with us. this is bloomberg. ♪

>> we have a lot of signals of hope, so we come back to

normality as soon as possible, particularly, manufacturing and export. francine: this is -- ritika: this is bloomberg surveillance, let us get the first word news. a stunning rebuke from his first defense secretary. jim matheson says that he has divided the nation and misused the military. he said that americans must reject those who make a mockery of the constitution. president trump said that notis' primary strength was military but personal public relations. four former police officers present when george floyd died face new charges. the -- the charge for the officer who is knelt on floyd's neck is at second degree more -- murder.

in los angeles, 150 million dollars will be cut from the police department's budget as a broader effort to reinvest more into the black community. los angeles spends almost $1.9 billion a year. the mayor said he would support another demand, creating a special prosecutor to review misconduct cases. the price of oil has retreated from a three month high. the unity of the opec-plus coalition is being threatened by a long-running feud. saudi arabia and russia has a preliminary deal to extend this, but it is conditional on other countries making deeper cuts to pat -- to make up for their past noncompliance. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. tom: thank you so much. we welcome all of you across

this nation to "bloomberg surveillance," and the news flow is extraordinary. on the political front it is safe to say that america came to a halt last evening when the atlantic published an essay by general matis, harshly critical of the president. before that, we heard from some voices of the day. let us listen in. pres. trump: the national guard is customary and we have a powerful national guard. over 300,000 men and women and we can do whatever we want as far as going beyond that, sure, if it was necessary. activeoption to use military forces should be only used as a last resort and only in the most urgent situations. we are not in one of those situations now. i do not support invoking the insurrection act. the secretary of defense for taking the position

that he took, because military leaders, almost in unison, do not believe that our military ought to be used to fight our own people, it ought to be used to fight foreign enemies. i would really point you to the chairman of the joint chiefs of staff. orderpewritten letter -- to his officers of yesterday with a small handwritten note to the bottom left speaking of the oath the military takes. gallup organization takes an oath to do the best polling in america. it is very different polling than who is going to win or lose, and we are thrilled that mohamed younis could join us on this historic day. you devote an entire page to your polling and study of the

military in america. does the military, the sailors, soldiers, junior officers, do they have these generals' back? mohamed: one thing i can report on is that the public has the military's back. among all the institutions we have polled about, the military has always rated the highest and consistently the highest. the is true even during very dark years when the iraq war went from being positive to really negative. perceptions of the military have really endured, so if there is one institution that has a lot of public support in this country, it is the military. we are at a time when a lot of publican -- public institutions are lacking support. beganour organization three years after macarthur,

eisenhower, and patton quelled riots in washington when they moved out the bonus boys, the world war i veteran starving and asking for support. what does the military look like now? is the great misconception of the president is that he does not understand the makeup of the military? mohamed: aside from polling, one of the things that has changed dramatically is how it operates and how it is made up. the major threats to most western civilizations developed economies has been terrorism and a lot of forces are gearing towards that. on this issue of race relations generally, president trump has 64% disapproval and how he is handling race relations. it is the inverse of how the americans rate his handling of the economy. -- this all happens

within the backdrop of a relative low and race relations in this country. 2000 one, 70% of black americans said that the current rate were good or somewhat good. 40% went from 70% down to in 2020. areof black respondents dissatisfied with the way that blacks are treated. 54% share that dissatisfaction. 66% are concerned a great deal or fair amount with the state of race relations. this is unfolding before a backdrop of a relative low in perceptions of race relations in the united states. obviously there is a big high immediately after the election of president obama. there is more than one america when it comes to this issue. one of the things we have been doing is really tracking what is

happening within low income, low education, low well-being communities across 47 states based on census data. communities, those 59% say that they know some or a lot of people who have been untreated -- treated unfairly by the bully -- by the police versus 51% of whites. 50% of blacks say that they know some or a lot of people who have been unfairly sent to jail. only 17% of their white neighbors have that same view. 56% say that people in their community have a negative view of the police. this is -- there is a national story, but there is an acute issue within these communities, and a lot of the reality that those communities are often missed by nationally representative studies, and that is why we have been trying to

track both and we will continue as this unfolds. francine: has this gotten worse in the last couple of years? is there any data to show what was felt two or three years ago? worsed: it has gotten since 2015. we have seen a consistent decline. 2017 was a flashpoint with the unite therally -- the right rally. notably speaking, when you compare it to the past 20 years, rings are looking -- things are looking worse now than 2001 or 2002. tom: thank you so much, greatly appreciated. editor and chief of the gallup organization. ande are motions in asia they wrap around hong kong, the relationship to china, and in victoria park we see those emotions. ♪

and the: on to retail, open market despite trading at a 15% discount to price per share since the $16 billion deal was reached in november. the virus outbreak decimated demand for luxury goods. let us get to our reporter who covers retail. the rationale behind getting it was segmenting tiffany and making it more profitable. why are lvmh so concerned going forward? we are expecting demand at some

point to get better. does that mean they do not expect this demand to pick up in the next couple of years? >> the world has changed since the deal was agreed. luxury is looking to have a bad year this year, 30 5% down across the board. but, this was a long-term investor and for lvn -- lvmh. jewelry is a strategic category. the rationale is still there, and the debate is whether they want to get it for a better price than agreed in november. tom: is it easy for luxury to cut costs? can lvmh cut cost to tiffany's and across their luxury platform? andrea: they should be able to cut costs, that is a very big group. they should be able to cut. the point about tiffany is that it actually needs investments to

take many of these products off image, to improve its do a big marketing campaign. lvmh is looking at increasing its inspects -- expenses. them for what they buy a cheaper price or does it not make sense anymore? andrea: i think the strategic rationale is there. luxury,r thing about there are very few assets available to buy anyway. many have a controlling family shareholder. , oftenlose an asset it'll go to a rival and it does not come back on the market again. that is the issue that they will have to weigh up. francine: do you think somebody else would be buying tiffany? at the time where their rivals looking to buy the company? andrea: i do not immediately see someone else coming in. i do not see someone else coming

away, becauseks everybody is pressured by what is going on in the market. spur morewill this consolidation elsewhere because a lot of these luxury companies are under so much pressure, or will some of them have to go bust? see more oversaturated with fashion companies. andrea: some of those smaller houses that have been in a this will situation, make life even more difficult for them. francine: thank you so much. our bloomberg opinions columnist focusing on retail. next we speak with jason farley. this is bloomberg. ♪

ritika: this is bloomberg surveillance. let us get the bloomberg business flash.

a group of warehouse workers is suing the retail giant, claiming that working conditions put them at risk of contracting coronavirus, as well as their families. it focuses on a distribution center on staten island, new york. -- has been assumed sued over $66 in unpaid rent. landlord says that gap remains in default and will not pay back charges. gap is struggling because of store closures and it deferred its april dividends and suspended rent payments. tesla is trying to ensure that its first european factory can start producing cars in a year. it is arriving with plans for a plant near berlin to appease environmental critics. they are concerned about deforestation and water usage elated to the construction. that is the bloomberg business flash. francine: thank you.

as we continue to track the virus, whom has developed a unique partnership with johns hopkins. they have been at the forefront of the international response. every day we will bring you insights from experts. farley,us now is jason the nursing professor of nursing. thank you for joining us. when you look at the gradual reopening of the economy, not only in the u.s. and across the world, how is it going? is it too soon to be say it has been done safely? jason: i think we are getting initial data that suggests that some openings have resulted in spikes in cases, but we also have data that suggests that some places are doing it and having reemergence into normal --e again, and are doing it i think all of us are seeing how the population responded to the

non-pharmaceutical measures. francine: would we have a better picture of that in about two weeks from now? or could it take longer. the more we go on, will people socially distance less? that humannow behavior, no matter what disease it is, coronavirus or others, they are adherent to certain practices. people get fatigue, people who get chronic medication get fatigue and miss doses. that is part of what we in the health care industry know as common behavior of humans. people to expecting struggle in continue to struggle. -- and continue to struggle. that is why you see health experts reiterate the message about the importance of social distancing, handwashing, and

using a mask. we also know that the economy has to open up, and how restrictions get reduced in local communities, we are seeing how folks gather more, clearly we have seen evidence of people beginning to travel in certain jurisdictions. and, we need to be vigilant in following the cases that occur anywhere from 10 to 14 days after potential exposure. protests how are the impacting, or how will they potentially impact the transmission of covid-19 in the u.s. and elsewhere in the world like london? jason: right. large know that any gathering of people increases the potential for transmission. protests,th these these are large gatherings of people, and it is challenging to

social distance. we have seen images around the world. we have also seen some protesters wearing masks, and others not. we also see law enforcement community who are sometimes engaging in having to remove their masks or their masks falling off. i think everyone who participates needs to be vigilant about the onset of any kind of new fever, cough, shortness of breath, or anything in the covid spectrum of illness and report that and get testing so that contact tracing can begin. how is contact tracing actually going along. we have had in certain countries a major setback. is it doing better in the u.s.? inon: i think we are different states and cities, struggling.

it has taken us a while to get up the necessary workforce to do it. i think that continues to be a challenge throughout the country. certainly, the obviously harder hit areas need a larger workforce, but we also see, making their work harder is an ongoing social media misinformation around people there to feel like that are people spying on them and wanting to judge behavior that they may have had in having contact. so, i would encourage everyone, from theant contact health department saying that you are a contact for people, because it is essential to effectively do contact tracing and have people realize that they can be exposed and need to self-isolate. francine: there are regions and

towns that have been hit particularly hard by this outbreak. do we know why? when we think about the epidemiology of the united states specifically, we know that both coasts, california and in new york, the virus came from different localities. we know that the initial cases in california came from china, but it appears that the cases in new york city came from europe. and we now know that there are cases of disease circulating in the united states earlier than recognized. late january, beginning of february, a month prior to when we began making restrictions. , andally do know that large population centers like new york, los angeles, and other

locations, the virus had time to begin circulating prior to our awareness and before any measure was in place. really, the harder hit areas have to do with population large metropolitan area such as the subway. growing prior was to recognition, and i think that is what is most important. atncine: i also read that times you have many virologists disagreeing, which is making it confusing for people. you can have two people sick with covid-19 at the same level, but one will spread it to 15 people and one will not. is there a difference between people who are sick with a live virus or a dead end virus? is there any truth to that? jason: we know from most viruses that you have people who have high role viral loads and lower -- theoads, meaning the

amount of virus their immune system allows them to produce. that is a key feature. sometimes, with the immune system response, it causes them to be infected and they are building the antibodies to recover. because they are building them quickly, they have less virus. you have less virus you have less transmission. so, for some people it takes longer, so the virus is able to go a little bit more wild and replicate itself faster. francine: thank you so much. jason farley of johns hopkins university. this is bloomberg. ♪

>> i would very difficult to argue that we are going to have a v-shaped recovery. the closest anyone has come is china, and it doesn't look like me.to me to to policy tools are about supporting the economy and driving to higher levels of performance. >> this is "bloomberg surveillance" with tom keene jonathan ferro, and lisa abramowicz. jonathan: for our audience worldwide, good morning. we are live on bloomberg tv and radio. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. an uncomfortable calm, maybe even a exuberance, we unwind that a little bit ahead of the ecb decision. tom: no question about it. --d under $1700 announce under $1700