francine: big pharma wants to get even bigger. what would be the largest health care in history. thousands march against police brutality. new york's curfew. the minneapolis city council takes steps toward abolishing its police force. payrolls rebound. unemployment in america declines. despite a jobs bounce back, it doesn't extend to black americans. welcome to "bloomberg surveillance."

a lot going on in the markets. a lot of focus on the protests, not only in the united states but also london. let's get to your markets. stocks bouncing 0.7%. a lot of focus will be on this deal when it comes to gilead, big pharma this is what i am looking at, crude oil. $40 a barrel. oil extending the rise. a european stocks dropping as investors -- let's get to the bloomberg first word news. francine. new york city is missing its curfew. this as the city prepares for life after the coronavirus lockdown. minneapolis city council pledges to begin the process of

dismantling its police force. members say they will consult the community. new zealand is ending social distancing after eliminating covid-19. it paved the way for resuming normal life. it is one of few countries that have eliminated -- to keep the virus out. global coronavirus cases have topped 7 million. the u.k. is pressing ahead with its two-week quarantine on international arrivals despite airlines is saying the move will devastate and wreck any chance the travel industry can recover. british airways threatening to sue over the policy. it comes into effect today. opec and allies extends the eduction curve -- extend the production curve. agreeing to the move, there is doubt some will stick to the pledge.

still is seen as a victory for saudi arabia around russia and denmark. 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 am risk a group to -- i am riddick a group to. the british pharmaceutical group astrazeneca is said to be interested in gilead. joining us now is head of bloomberg intelligence, an expert on pharmaceuticals. when you look at the possibility of a lamination, first of all does it make sense? sam: like the recent deals we have had where bristol miles -- bristol-myers, this is a surprise. when you step back from that point, you look at the central

opportunities a combined company would have, you could come up with an assessment it does make sense, yes. francine: is there a risk that more people want gilead? is there any indication that gilead is ready to sell. are we going to see some bidding war? how valuable is gilead? sam: i don't think anyone viewed gilead as a target. everyone was viewing gilead as a buyer. this is part of that surprise. i don't think anybody wanted astrazeneca to do a deal of this size. i don't know if there will be a bid for gilead. story in anyowth way, at least from what sources are expecting. this is like the opposite, from a position of strength to buy longer-term stability to invest

in r&d. we have any indication this will go ahead? it is a matter of when? sam: i don't think they are any regulatory issues here. unless governments and politics get in the way which i don't see why that would be the case, we won't see a deal of that synergy , about having more firepower. it might cut a little bit of overlap, but not much. aside from that, i don't see what the risks would be and is gilead really interested? who knows? the report comes from a good bunch of analysts and news reporters who i am assuming have some good sources. francine: sam, thank you so much . coming up, after america's jobs reports, americans are looking

for reassurance from jay powell. we discussed the rate decision next. -- we discuss the rate decision next. this is bloomberg. ♪

francine: economics, finance, politics. this is bloomberg surveillance. let's get to the bloomberg business flash. >> the u.k. is preparing to strengthen its takeover according to the times. the government will introduce new legislation before companies to report a takeover. the plan comes as a boris johnson looks for ways to reduce the nations alliance -- reliance on chinese companies, particularly huawei. the union says the airline is threatening to file -- fire all

of its pilots and hire them back on individual contracts. that is unless an agreement can be reached. vacation joining other rental sites in seeing a surge in summer demand. the ceo says it is clear people want to get away after months stuck at home. holidays are being replaced by domestic getaways. airbnb is not ruling out an ipo this year. francine: thank you so much. let's focus on the u.s. stock rally. the s&p has seen the fastest coming within a -- the nasdaq has already done that hitting a record high last week. the real economy is anything but rosy. gained 2.5yrolls

million. joining us now this morning is patrick armstrong, the chief officer at plurimi wealth. i would love to give your thoughts on this big pharma with astrazeneca and gilead. are we going to see a lot more m&a in the space? pietro: it does make sense -- pietro: it does make sense. if you remember a few years back, that may be playing into it as well. astrazeneca maybe getting a better text deal on purchasing gilead. i do think it is a function of where interstates are. were. are lower than they francine: patrick, would that be

across or are we going to see in general a lot more m&a activity? or is it for the health sector? patrick: it is cross corporate. you can pick up very cheaply. you have seen this year performance for companies that are the strongest boundaries have been the strongest performers. companies have been the weakest performers. there would be opportunities for strong companies to purchase companies that have been close to failing. it won't just be in the health care sector. it makes a lot of sense for strong companies to pick up assets quite cheaply still. francine: overall, there were a lot of questions that stocks weren't just very different to what we were seeing in the real economy, because of the real economy was doing pretty badly. and we have the u.s. jobs numbers pit a lot of questions whether it was stocks that were right in looking at better

fundamentals. which way is it? patrick: it is a little bit of both. i characterize the rally as liquidity. it is up 18% year-over-year. that is never happened ever before. if you look at interest rate policies, masses of liquidity. that has to find a home. people are looking to equities and further up the spectrum. payrolls number was shocking. had to do a double take for a few seconds to make sure it wasn't missing a negative sign. most of it is coming from the temporary redundancies. peoplees made temporarily unemployed. the economy is lagging the stock

market. liquidity is the primary driver of that. francine: meaning that we are expecting corrections? are do you think the markets can hold onto these levels? markets you think the can hold onto these levels? patrick: doing what they are doing, it is difficult. , i looked hard to see where we can reallocate to. it is better than equities. are narrow as well. you can't put your money in cash. there's a lot of upside in equities anymore. the central bank policy really commences that significant downside. francine: where do you see upside? patrick it is getting harder to

find where it is. they are really outperforming year-to-date and i think in an economy that is not going to fully recover. it is going to be a 90% economy where things do not get as good as they were last year. they are on a trajectory where they are improving month on month. there will be some structural unemployment unless the temporary workers getting back into jobs. that will happen. there are some longer-term jobs created. and for me i prefer companies with strong balance sheets. i prefer dominant market positions. i think the cyclical companies that have been really rallying isthe last four weeks, there where there may be some downside . cruise lines, travel and leisure

, they have been really rallying but long-term they have a lot of headwinds in front of them. francine: a lot of the focus will be on what jay powell says on wednesday with the fed decision. how much more can the fed do in the economic cycle? patrick: it is going to be about signaling. the change that will be happening. zeroare going to stay at until we get the economy back to full employment. i think the fed will continue to signal to let the economy run hot. that is a part of what they are trying to do, make sure that people do not sit on capital. they want that to flow into the economy, into the markets. it is not come to be really policy we get from powell on wednesday, but signaling this is the triggers before we start letting the economy run hot.

francine: where do you see the dollar going? the bloomberg dollar spot index lower. patrick: i don't think there's going to be much moving currencies right now. the dollar over the last month as risk assets have rallied. markets sold off. strong think we have a leg up in equities. it is going to be muted moves. all central banks are doing roughly the same thing where the fiscal response in europe, ecb's response, a little bit slower. now they have caught up. it is going to be fairly muted signals right now. francine: patrick, thank you so much. patrick stays with us. coming up next we will talk about europe. the president of the ecb speaks

today pit we will talk -- today. we will talk of the central bank has done enough to resuscitate. this is bloomberg. ♪

francine: this is "bloomberg surveillance." i am francine lacqua. let's talk about europe and christine lagarde. she stands before european lawmakers today. , public to bloomberg

hernandez the costa says deflationary risks warranted the decision to rally. still with us, patrick armstrong from plurimi wealth. when you look at the things we are looking for in europe. we had some pretty discouraging figures out of germany. how does the european economy stack up with the u.s.? patrick: the european economy is struggling more than the u.s. industries with comedic asian sectors that the u.s. has in the , the banking sector and industrials in europe are hard because they are more at risk, even the policies on social distancing. we have not seen the bottoming of these germany economy -- of the germany economy.

stimulus being approved right now across the euro zone. and are in place now probably seeing the bottoming happening. don't expect remarkably sharp recovery. happens if the ecb -- at ecb level? a lot of this recovery is dependent on the central bank. what happens if there is a legal challenge? patrick: as lagarde mentioned, they are undeterred by the german constitutional court ruling. it doesn't seem to be stopping the ecb. the guard has learned, she said she didn't target spreads early -- lagarde has learned, she said she didn't target spreads early. she has become quite savvy. the ecb is going to fill its role, continue to buy bonds if

there is a court ruling against it. i am sure they will find ways around it. that she has aed deflationary backdrop and all of europe. they do have to take measures to promote the economy and stem off that deflationary risk. lagarde is very savvy. the policy here in place. just adding up all the programs in place. up to the balance sheet over $7 trillion which will be 60 percent of gdp. it is very stimulative. i expect that the occur for the next several years. francine: where d.c. value? -- where dony value you see value? do you see any value? patrick: i prefer swiss bank in europe. we bought equities.

way to collect a exposure to swiss bank. policy that is at the same level as the rest of the world now pierced structurally, it is probably undervalued but i reason.at is more of a it is harder to see a sharp rally in the euro. i prefer swiss bank on a currency basis. francine: patrick, what do you do with brexit? there is a feeling when you look at a lot of these discussions and brexit negotiations may not lead to a deal pit what does that mean? patrick: it is amazing how that was front and center. what has happened with the pandemic is not quite forgotten.

it is second-tier news. it does look like the u.k. is taking steps where it isn't averse to a no deal. it is a headwind but i think once you get past the no deal, there will be minor deals. it will come to deals on different industries and making things function which is a necessity for both regions. it is something that is a headwind. i am surprised it nearly rallied this month because they don't see many signs of progress on it. it is interesting at a minimum. i'm surprised it is rallying with all of this news. francine: patrick, thick you so much. up,hank you so much coming we speak to the -- we will talk about diversity and advertising

and we will talk about what the economy will do in the next couple of weeks, looking at advertising spending which is -- to understand which sectors are going well. in the meantime, german industrial production taking a record yield before graduate easing of lockdown restrictions. germany, slumping to 7.9% during the month but the markets 5%.he dow, on the europeans crude oil in new york, 39.88 after an agreement to cut production. patrick: -- this is bloomberg. ♪ you say that customers make their own rules.

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only with xfinity mobile. now that's simple easy awesome. switch and save up to $400 a year on your wireless bill. plus get $200 off a new samsung galaxy s20 ultra. francine: economics, finance, politics. this is "bloomberg surveillance ." get to first word news in new york city.

here is ritika gupta. ending new zealand is social distancing after eliminating covid-19. it paves the way to resuming k normal life and one of the few countries to have successfully eliminated that pathogen. strict border controls will remain in place to keep the virus out. mobile coronavirus cases have top 7 million with over 400,000 deaths. president donald trump is pulling around 9500 troops out of germany, and in another sign of disconnect between washington and angela merkel caught off guard, it cuts american forces in germany by around a quarter. the president has criticized the merkel government to not meeting its defense spending targets. colin powell has become the latest notable republican to express concern about president donald trump. -- the formerl secretary of state the says the president has threatened active-duty troops against theests, drifting away from

constitution. the uk's finalizing plans to ease its lockdown with public support for boris johnson's -- tomorrow the prime minister plans to brief cabot administers on the next stage of easing restrictions. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, ritika gupta. this is bloomberg. francine? francine: thank you so much. how will the coronavirus appreciate the industry? profit growth was hit by the crisis. an advertising firm says it remains confident that it will double gains in revenue for the year overhaul -- over all. artan sorrell, thank you for giving bloomberg a bit of your time.

when we look at the u.s. economy and what we saw with the jobs number friday, how quickly can advertisers recover from the slump? : digital advertising has remained quite strong. in the first several months of the year we are up in terms of profit gross margin by 15%, 7% 82%.%, reported numbers up that reflected the mergers we made last year. the answer to your question is i think digital advertising will be quite robust. traditional advertising will come under heavy pressure. with thehat forecasting of revenues in q2, down by 15% to 20%. tolysts are looking for 20% 25%. traditional advertising, tremendous pressure. it varies by vertical.

if you look at the tech industry, by and large run 53% of our revenues, by and large that remains quite resilient. some shift from q2, some postponement, by and large very resilient. if you look at health care resilient, online gaming, home entertainment is strong. other areas such as cpg and autos are mixed. procter & gamble have a record q1. more varied because they are in the food business. autos were hit quite heavily and travel and leisure obviously are more and probably will take at least a couple of years, even the industry pundits and those who --end on for their bid doing for the living are reticent about the speed of the recovery despite the job numbers that we saw in the u.s. no rocket ships in our view, as the president said, but he is

right in the sense that there will be some v-shaped categories , but where it remains to find out and follow. just a little advertising by 2022 will be about 57.5% of the market. i 2024, according to one of the best analysts, around two thirds. francine: it is great that you are breaking it out by industry, but if a used -- will it make a difference if it is a u.s. based company or an asian one? waves: i think we saw the with the coronavirus. coronavirus hit china and the asian-pacific first, then spread through western europe and into the americas, and it is still highly verily in parts -- highly viral and in parts of -- highly verily and in parts of latin america. china with an autocratic regime and a highly disciplined regime,

with testing and tracking externally strong. we have seen that flow through asia and into western europe and into the americas as a wave in terms of recovery. but geographically i think we will see similar patterns, although there will be v's and u 's as well. the alacrity with which regimes embrace lockdowns and testing -- that is a longer-term project. i think the pattern would be quite similar, and the trick is to find the v's in terms of category and in terms of geography. we are in 30 countries already. we have 2550 people. been frightened to expand by merger, as we call it. every deal that we do. go ahead.

to aske: i was going you, has the pandemic created opportunities for s-4 capital to buy anything? week we added an analytics company in latin america and we will add a similar one in asian-pacific, and a platform based company also in asia pacific very shortly, too. these are small because we don't -- our liquidity has been very strong, better than any of the scenarios we planned as we went into our lockdowns where we were very concerned about the impact or the potential impact -- of course industries and clients with liquidity constraints. but has turned out to be quite good. we haven't taken any government money. some companies have taken government money, paid cash bonuses, and in fact with low tax rates that they borrowed

money from. that will cause a significant amount of controversy around those companies in the future, some of them in our industry and not close from here, where i am sitting and where you are sitting now. those are controversial moves, but we stayed away from that and we need to focus not only on coronavirus but also on recent events in america, where we are making significant moves in the context of our company, which is small within the industry. as yet. the biggest coconut of its kind -- certainly we are looking at that with very great interest and are keen to make changes. wencine: martin sorrell, will take a break and i want to ask you about diversity in the advertising space. coming up, companies across the world have voiced their support sm.inst raci

we continue our conversation with sir martin sorrels next. this is bloomberg. ♪

francine: this is "bloomberg surveillance." my guest this morning, in the wake of the global protest his companysm, and is developing diversity on inclusion training programs. is the advertising industry doing enough to prove diversity? still with us, martin sorrell. from s-4 capital. why has the energy been so bad -- why has the industry been so bad about diversity?

martin: well, i don't think it's ,air to single out our industry -- the tech industry itself has a lot to do. so i think it is unfair to label us as the slower part of the industry. we all have to take response ability for this, and i think it is different. you won't remember this, but i can remember coming out of business school in 1968, which was a year similar in some respects to what we are seeing now. what we are seeing now is the demonstrations as president obama said, much more broadly based, the constituents and the velocity of these demonstrations are extremely strong. as i say, i think different to years ago, and i think we will get real change out of this. if you look at our own company,

on friday we instituted a for our u.s. people. the united states is over half of our operations, new york, san francisco, and we have outposts in seattle and elsewhere. we started a matching fund. we put into hundred $50,000. that we put in $250,000. into hundred $50,000. holding companies, a fund of to $10 million. the second area, we have a group of people, many groups of people in our company now looking carefully at what we should do on racial bias training, on racism itself, and on education and on boarding programs, to ensure we do it. and what we are also going to do

is start a fellowship program. not dissimilar to what -- i think that has now been abandoned, which i think is sad at this point in time in our industry, but we will institute a fellowship program for minority graduates and non-graduates. those who have not gone to universities and higher education places, giving them a chance, too. that has received a strong response from our people. we will start small but we will build. particularly at a time when our industry is cutting its headcount by 50,000 people globally. and about 50,000 -- sure thatbut to make happy talk orst empty words, how do you measure it? do you have metrics? will people have to explain what they have done? martin: just as we have done

with gender equality -- and unfortunately i think one of the problems has been we have focused on gender diversity -- just as we have done in terms of specific targets for numbers -- you might call them quotas -- we will have specific targets for diversity of all kinds, bearing in mind proportions of population represented by those ethnic racial groups. secondly, we will have education . these targets will be built into not just qualitative assessments but quantitative assessments, too. so our people who on average on the media side of our business, media people, about 550 of them are context people, their average age is 32. we have a younger workforce, committed to other

parts of the workforce in getting this done. and in 30 countries -- a lot in latin america, a lot in asian-pacific, even greater in the future in africa and the middle east. we are seeing a groundswell of support along these lines. and secondlyd, education and target sending, and thirdly, apprenticeship programs which will be sorely lacking giving the -- given the state of the industry. francine: will you hire more ethnically diverse people who once you for you, and pitch before giving your business, that they will see them in the campaign? martin: yes, that is

increasingly the norm. i will not say it is the norm everywhere, but that is the core of the pictures of our mp's and proposals that we have seen over the last two years, and that is becoming more important in clients' thinking. it is one of the way that clients improve the quality of their supply chain, and they are making sure that their supply chain response to the objectives, the social objectives that they are building. francine: martin sora, thank you for joining us. martin: thank you very much indeed. francine: coming up, the george floyd protests that started in the u.s. have gone global. a the u.k., protesters topple statue of a slave trader. this is bloomberg. ♪

francine: economics, finance, politics. "bloomberg surveillance. another week of protests across the world saw the largest crowds

yet, thousands demonstrating peacefully. dismantling against the city police department in minneapolis. in britain, thousands were demonstrating across the city this weekend. protesters in bristol tore down of edward colston, a sleeve trader, and threw it into the harbor. it is believed he brought about 80,000 children from africa to the americas in the 17th century. burk,g us now is kathleen and thank you for joining us. will this lead to real change and equal opportunity? talking: if you are about the united states, i think so. it is quite an amazing protest therent, not only because is much less police violence then in the 60's, for example, but because it is so all the cultural. it is not we whites against you

blocks so much, it is we are all in this together. that is probably what gives people hope that this will actually be a transformational change. whether: how do we know it is -- it is varied fickle to measure. difficult it is very to measure. we need targets. is there a way to determine in six to 12 months whether we are doing better? kathleen: we will only know in 12 months, of course. the united states is different in that it is 50 different systems, and not all states are responding the same. and for the reasons that you know as well as i do. sensual -- in more centrally governed states, such as the u.k., there can be a national response because the nature of top-down power.

in the united states what we are seeing, although one doesn't know for how long, his bottom-up power, and that is bottom-up power that seems almost to be on its way to some success. again, unlike earlier riots in the united states history. kathleen burk, when you look at the u.s., how will it change the politics come the general election in november? kathleen: again, that is going to depend. november is a long way away. probably it is going to be the responses of people to trump or to biden. trump is moving come as we all know come in a divisive way, to mobilize those who he believes support him. biden is -- well, trump is trying to build and extend his coalition, which he is going to have to to win. biden is also trying to build a coalition, but his response, his

approach is reconciliation. to bring people together. what we are going to have to see is, do americans prefer neighborliness to confrontation? i myself -- and i am no better at predicting that anyone else, and historians can be pretty bad at predicting -- is that more americans do prefer getting along with their neighbors than confrontation, neighborhood to neighborhood. people get hurt that way. they don't get hurt by being neighborly. professor, how do the protests in the last couple of weeks compared to what we saw in 1968? there weren 1968, several come of course. there were antiwar riots, and what we saw at the democratic national convention nearby, there was a police riot. in the race riots, of course,

both in 1967, which you may remember, had a long hot summer which saw 159 riots, and then the ones with martin luther king , in response to his assassination in april, 1968. there is a real difference sparkedwhat really those -- well, not sparked but encouraged them, was television. people could see the police response and what was happening, and riots leapt from d.c. and detroit and new york, to cities all over the country. what is different about this as much as anything, besides the multicultural, and besides the television is social media. because someone uploaded a video of what actually went on, and because of the nature of twitter and facebook, that was a driver that we have not seen before. you can mobilize people in a

different way, and people who feel the same way can get in touch with each other. so there is no -- there is no national leader. there is probably not even state leaders, probably not local leaders. there is a coming together of people who have seen what is happening, telling each other what is happening and deciding to do something about it. one problem over here in the last weekend has been violence at the tail end of most of indeed large, large political demonstrations. in the united states, there seems to be after the initial outbreak of violence, for the first couple of days, people determining that it is going to be peaceful. so i suppose that they will get more done that way because they can incorporate political leaders, but also because you will notice that in this -- in the ones now, they do tend to go after wealthier areas, not burn

up their own neighborhoods. so the riots, however you want to call them this year in the u.s., are rather different from any that have gone before. much,ne: thank you so catherine burke, professor of modern history at university college, london. if you look at the markets across the board, equity futures are fluctuating. investors after the u.s. jobs number on friday reassessing and seeing how the rally will continue. "bloomberg surveillance" continues in the next hour. tom keene joins me out of new york. this is bloomberg. ♪

francine: big pharma wants to get even bigger.

astrazeneca approaches gilead for what would be the largest health care deal in history. thousands march around the world against police brutality. new york's city curfew ends early after a peaceful night. the minneapolis city council takes a step towards abolishing its police force. and payrolls rebound. unemployment in america declines, but the surprise jobs bounceback doesn't extend to black americans. this is "bloomberg surveillance." i'm francine lacqua in london. tom keene is in new york. another big week looking at the protests around the world. we had an amazing turnout when it comes to london but also in bristol, and then you look at central banks, christine lagarde is in front of the european parliament today, and the said is wednesday. interesting,l be francine, certainly with the market recovery, which continues this morning. on the political front, all eyes are on the white house, and i don't mean about