♪ anna: the s&p 500 races this year's losses, seeing it almost 45% rally from its march lows. throat bank warns the world economy will contract the most since world war ii. christine lagarde defends the ecb crisis measures as the world bank sees the worst global recession since the second world and cathay pacific comes the latest airline to get a government lifeline in the wake of the pandemic with a $5 billion. good morning.

this is bloomberg surveillance. i'm francine lacqua in london. let's go straight to the markets. we are seeing a lift to the market somewhat but a bit flattered then what it was earlier on. 0.4%.oxx 600, down by the dollar is rising. treasuries advancing. we had a little bit of momentum. we saw that historic rally. the dollar strengthening for the first day in nine sessions. the federal reserve extended its main street lending program which means it is allowing more companies to participate. that lessens the burden on banks that create the loans. plenty more on that throughout the day. that's get to the first word news in london with dani burger. dani: hi. lockdowns across the world may have prevented about a half a billion coronavirus infection. that is according to the first peer-reviewed analysis of the impact of health policy. it comes as the world health

organization says people without symptoms passing on the virus is very rare which contradict speculation about the prevalence of so-called asymptomatic transmission. democrats proposing a sweeping police reform bill, hoping to turn the nationwide unrest into concrete legal action. one key change, they want to make it easier to prosecute at sue law enforcement officers. a vote is planned in the house for later this month. a new round of arms control talks between the u.s. and russia. senior officials will meet in vienna on june 22 and the aim for washington, and list moscow's help to bring china to the table. the white house wants three-way treaties to limit the stockpile of nuclear weapons. in the past, china has balked at trilateral talks. the global economy will contrast the most since world war ii according to the world bank. it also sees emerging nations shrinking for the first time in

six decades. global gdp could trickle of over 5% in 2020. 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 dani burger. this is bloomberg. francine: thank you. now let's kick it off with the markets. the s&p 500 has wiped out all of its losses for 2020, bringing it to 45%. retail brokerages such as charles schwab and td ameritrade have posted record sign-ups. joining us now is the chief executive officer -- great to have you on the program, especially on a big day for the markets. what are the markets looking at? last week, a lot of concern that equities were doing one thing, ignoring fundamentals on the economy. but are they right to do so? >> at think the markets are

quite right. what we see is although the economy will have a terrible here and you mentioned the numbers of 5.2% for 2020. it will be a very bad year but we measure several numbers of data and the economic front. we look at our forecast. in the past week, the numbers came from 30% to 50%. i think with the markets generally does is follow more the trend than the levels and the trends have been getting better. central banks response has been so massive. tocan see the fed compared 2008, using instruments that are more linked to the direct economy rather than just buying government bonds. counteract the effect on the economy in 2021. we think we will have a v-shaped

recovery. coming back in the market, what is interesting is that in april, when markets rebounded, it was more of a technical rebound but it is still just starting now on the ground. if you look at hedge funds, they are still at 0.12. say the market rebound has changed in the last week, i would say. it also changed in the term of laggard started to perform. in sync with affect the economy is getting better. there's quite logic between what's happening in the economy and what's happening to the markets. francine: one of the biggest concerns, one of the biggest debates is whether we will see deflationary pressure. what does that mean for the markets? is there any part of the fundamental economy that the market is actually ignoring and

is this one of the concern? fiona: obviously, there's a lot of things that can happen. we don't know of the global pandemic will come back and it'll have a second hit on the economy. we don't know if consumers will start consuming as they have done in the past. around m some trends ore localization. there are some deflationary forces in the short-term, but inflationary forces on the long-term. francine: longer-term, where do you see value? we are expecting a recovery may be coming in quicker than expected but with u.s. jobs number in the u.s., it is a pattern that does not tell us whether it is quality jobs that have come back. example, you look, for in the u.s., it is quite interesting the number around

aht auto industry -- the auto industry last week. production in zero at late april in quite a capacity narrow period. we see that some sectors are coming back quite strong, perhaps stronger than we thought. there are some sectors that will be hit for longer-term like airlines. even the strongest airlines like cathay pacific need a credit line to be able to go forward. it is a time where there could be a rally in equities because ength.s lots of l market you have to make some differences in between stocks and choose sectors that will be more resilient in the next 12, 18 months in regards to the pandemic. francine: we're just getting some breaking news out of cathay

pacific, that they may cap equity markets for further fundraising. we had a bloomberg story saying they needed $5 billion. what do you do with the transport sector? is it an industry group that you are not comfortable with at the moment given that even if there is a v-shaped recovery in the economy, it may take a lot longer for travel to go back to normal? not very comfortable with airlines of the moment. even though the economy will go back, the way we travel will have to change because of the pandemic. if you take airlines which business models are constructed on having less time on the ground and rotational planes which is quickest and flexible. in the next 12, 18 months until we have a vaccine or cure for this disease, the sector could be hurt. what will changes you will have

some strings attached. we have seen that in europe already. the package will be linked to some conditions. which is good news, by the way. it will not be back to normal for the airlines, like it was before the crisis for a long time. francine: we also have some news out of china today, data out of china. does china have a deflationary risk or is it largely due to the price of oil? if it is the price of oil, can the risk be contained or will china deflation hurt markets? what do you do with asset class around the world of that is the case? fiona: i think china has space to go with the fiscal policy. the space to go was the huge consumer market it has. in an emerging market, i think china is in a much better position than on the countries

because they have more central bank policy. have a consumer market they can find ways to make consumer more. francine: thank you for joining us, fiona frick. up next, cathay pacific becomes the latest airline to get a government lifeline in the wake of the pandemic. we also have some breaking news from the chair of cathay pacific, saying they may cap equity markets for further fundraising. we will have a full round up of the airlines industry next. this is bloomberg. ♪

francine: economics, finance,

politics -- this is bloomberg surveillance. let's get straight to the bloomberg business flash with dani. dani: hi. volkswagen's chief executive is jeopardize the company putting emissions cheating behind it. bloomberg has learned of comments made on the internal webcast. oversight was part of the agreement after vw's diesel emissions scandal, failing to win certification from the monitor would be a major blow. ansa historic state bailout is getting bigger. austria agreed to provide 450 billion euros to support the carriers division in the country, including 150 million indirect eight. it will help sustain the unit as airlines across the world start restoring flights. belgium is the airline's only home country that has not provided emergency funding. occidental is reviewing its middle eastern assets as it seeks ways to reduce its debt pile. sources told bloomberg the

company is considering reducing stakes in oil and gas fields in oman. its holdings could be valued at more than $1 billion. the company is also open to divesting other assets in the region. that's a bloomberg business flash. francine? francine: thank you so much. cathay pacific has announced a $5 billion recapitalization plan, including battling the unprecedented difficulty brought on by the coronavirus. even before the pandemic, cathay was under enormous pressure when it found itself cut up in a hong kong protest. joining us now on the phone is our airlines reporter. cathay pacific becomes the latest airline to get a government lifeline. we heard from the chair moments ago that cathay may cap equity markets for further fundraising. how much odoes the company need overall?/ sid: cathay pacific has been struggling for a while and they

have been more hard-hit than other carriers, especially as air travel returns and other places because hong kong does not have a domestic travel market. they are pretty much dependent on long-haul travel which is why the carriers says they are burning cash and need further funding. this is a pretty hefty round of funding. the carrier will also implement another round of data and in the secondary voluntary program. they have been burning as much is 3 billion hong kong dollars a month since february so they need the cash. francine: are there too many airlines around? one of the things we have been trying to figure out, governments are trying to figure out how to save a lot of their national airline carriers. but some were struggling from the start so how many at the end of this will be bailed out worldwide? is it difficult to find a number on that at the moment? siddharth: absolutely, it is very difficult to put a number

on how many carriers will be bailed out. the industry debt could swell by about 30% to $550 billion this year. billionludes about $123 in financial aid from governments. francine: what can you tell us about british airways? yesterday, there was talk about firing pilots because they couldn't fly planes because of the quarantine. siddharth: british airways continues to wait on the home office to respond to its quarantine. the u.k. government has mandated a 14 day quarantine for all incoming travelers, which airlines are saying could hamper demand going forward, especially into the lucrative summer season when most people in europe take flights. francine: thank you so much, sidd, with the very latest on the airlines. as the auto industry gets back to business, gm's chief executive is thing optimistic on

the road to recovery. among the latest issues yo she has had to face, thousands of used cars flooding the market. >> general motors has worked to have a minimal amount of our sales go into rental fleets. we focus on other types of commercial business and the retail customer. it will have an impact, but not a huge impact for us because of the level we had gone to from a rental car company perspective. david: what about electric cars? tesla has a market value larger than any other market value in the u.s. are electric cars going to be an important part of your future at general motors? mary: absolutely. right before the covid crisis hit, we actually had investors, dealers, our employees through an ev day. we took them through our technology from a battery perspective. it starts next year, we are launching the ltm battery

platform and taking multiple models off of that. we announced the gmc hummer ev. we announced that cadillac will be a lead brand for developing and selling electric vehicles, because in the end, we believe in an all electric vehicle. we believe the transition will happen over time. since we are a full-line manufacturer with value brands and luxury brands, we need to make sure we are providing options for the entire marketplace and we are really excited. this is in my almost 40 years at being at gm, this is one of the most exciting times as we transition to electric vehicles. david: when you say transition, do expect in 10 years, 20 years, general motors will produce only electric vehicles? mary: i think it will take longer than that. i think it all happen over a period of years and decades when you look at veterans vision that needs to occur. 250 million cars in the u.s. car park so transitioning all of

them is going to take some time. when you think about different use cases, also affordability. that is why we are working hard to make sure we are in a leadership position with battery technology so ev's are affordable for everyone. it will take a longer period but it will happen. david: i noticed you would as to are announcing electric vans. is that going to be replacing automobiles or just a different part of what you are doing? mary: we have a limited business right now with commercial vehicles. we see that is a huge opportunity. as companies look at what their carbon footprint is and their environmental budget they will make, if they have any part of the business that is delivery or has a fleet need, having commercial vehicles that are all electric can meet those needs are going to be very important. we feel like we can provide a good value equation with the cost of ownership. we see it is a huge opportunity.

david: today, as you look at general motors and the overall u.s. economy, are you reasonably comfortable the u.s. economy can come back and you can do reasonably well this year? i assume you will not sell as many cars this year as last year. mary: we think the market will be down this year in the u.s. it is a little early to tell how the market will rebound. continue to sell even through the whole early month and weeks of covid. we continue to sell. it is starting to recover but we are not back to a comparable week last year. we think it will be down. it really depends on how successful we are in making sure we keep covid maintained and we don't have a second spike. we're planning for a variety of scenarios to be ready. hoping for the best but also planning for something a bit more conservative. francine: that was gm's chief

executive mary barra. moscow rolls back its coronavirus lockdown. prominento a russian businessmen coming up. this is bloomberg. ♪

francine: this is bloomberg surveillance. i am francine lacqua in london. a transmission of the coronavirus says people who are a symptomatically is very rare. let's get more with our editor on health who joins us on the phone. i was a bit confused because we

thought asymptomatic people were a real danger, but what exactly is the who saying now? does it contradict what they said or they have more researcher now certain about what they are saying? >> they didn't distinguish between people who are asymptomatic and symptomatic. people who are asymptomatic never develop symptoms. does the who make distinctions between that and people who are not symptomatically now and later on get sick? people who are not symptomatically and later get sick do transmit the virus, and often during the course of the disease. francine: does it mean -- go ahead. >> there still are concerned about people who don't know they are sick because they may be

developing the infection and may not realize it. they could still be passing the virus along. very early in the course of the disease. there is some research that suggests very early in the course of symptomatic disease that people are at their most infectious. so in terms of what we need to do, social distancing, etc., those are still very important measures. francine: john, thank you so much. coming up, we speak to alexander lebedev. this is bloomberg. ♪

economics, finance, politics. this is "bloomberg surveillance ." let's get to bloomberg first word news with dani burger. the worlddowns across

may have prevented about half a billion coronavirus infections, according to the first peer-reviewed analysis of the impact of health policies. it comes as the world health organization says people without symptoms passing on the virus is very rare. it contradicts speculation about the prevalence of so-called asymptomatic transmission. in the u.k., oris johnson will talk's cabinet through -- boris johnson will talk his plans of easing restrictions. with london reporting no new fatalities, the u.k. is still on schedule to reopen non-essential retailers on june 15. north korea is cutting communications with the south over what it calls hostile acts. the statement appears to refer to leaflets critical of kim jong-un being sent across the border by anti-pyongyang activists. the nations are about to mark

the 20th anniversary of the first summit between their leaders. there were hopes this could be a moment of reconciliation. and it is official -- the record ing u.s. expansion ended february, according to the national bureau of economic research that served as the arbiter of america's business cycles. the panel also said the death of the downturn warns of it being called a recession even if it turns out to be brief. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in this isn 120 countries, bloomberg. francine? francine: thank you so much. moscow is rolling back its lockdown from today. the tag news agency says people will be permitted to move around the city whenever they like. with over 470,000 coronavirus cases, russia is the third worst effected country in the world. theorst effected country in

world. joining us now is alexander lebedev, publisher of the independence. thank you for joining us on bloomberg. i would like to get your thoughts on july 1, on constitutional reforms. what is your take on this? will this go through, or will this allow vladimir putin to stay in power for life? goxander: i think it will through. i know most of the criticism of the world press goes into the fact that a referendum will in powerin to stay until 2036. but what is not mentioned is that the parliamentary competence is raised a lot. morell probably go to a political system based on divisions of powers. and far from the russians, which will go to the referendum, do not know that it is about putin

rather than anything else. if they want to let the president stay in power for another 16 years, let them do that because i do not think that heavily regulated by the russian tv channels. francine: you think this is a good thing because it would have more checks and balances, or would it enable the president to do more reforms of the economy? well, the leader generally stays in power for 16 years, which is the time that putin served. criticism, let's say partially justified, at least the referendum will change the constant duchenne to provide will change the

constitution. includedtical extensions to the parliament and the judiciary. so let's see both things. i frankly do not think putin would stay in power for an extra four to eight years. and if the russians would like to confirm it, let them do that. francine: the russian economy at the moment is stagnating like many countries around the world, but it is also very reliant on the price of oil. what reforms do you think the government should be putting in place to put pressure on a better footing? alexander: luckily for the russian economy, oil has been $43 a barrel in recent days, which is not bad. and i can see that the ruble is strengthening quite a lot, which is reflected. last crisis ofhe

2008, was probably one of the lowest growing economies in the world. its growth rate was a bit over 1%, the way you calculate. so if we go to zero, it won't change much. i think this economy has suffered a lot in the region 10 years. it is taken most of a toll, and -- it has taken most of a toll, and i don't think we would expect things to go much more wrong than it used to be. the stock market is picking up. the ruble has gained back 10% in recent two weeks. the agricultural sector is showing good performance, and i think the economy in general is quite ready to stand against. what i see as a result of the pandemic is not at all catastrophic. francine: i don't like a lot of times talking about these alphabetical recoveries, whether .t is v-shaped or a w but you expect a pretty strong

recovery from the pandemic in russia? alexander: i don't expect a really strong recovery, but i don't expect catastrophic results. i think we will grow between 0% and 1%. which is been the case in the past 10 years, the growth rate. you could also see some interesting finds in the last economy. for example, in patent -- in st. petersburg, they're noticing the first electric shift in the world. with the russian battery, not south korean or chinese. the battery for the electric ship is the main thing. it has been tested already for a month, so it is a good way to come out of the pandemic. can produce the really number one electric ship. good for the ecology. on covid-19, do you

trust the data coming out of russia? a lot of critics say it is almost impossible to have so many effected -- so many infected without many deaths. alexander: if you compare russia with norway, norway is doing better. russians have one death per 29,000 people. norway, one death per 32,000 people. i am picking up the number of the mortality within the ranks of doctors and nurses, which the doctors and nurses calculate themselves. country, publicly combined by the doctors and nurses themselves, the number shows a death of 360,000 people. 5.5russian death rate is thousand. if you relate that, that is probably one doctor and nurse per 15 people dead. this is more or less the average

figure for most of the countries in the world. if i compare that, i would not really trust the concept that the russian authorities are manipulating the statistics. example, ther death rate is 20 times higher than in norway because it is one people dead per 2000. that is because the swedish authorities were stupid in handling the pandemic, and probably the british and the italians on the russians were doing much better. i don't think really there is any reason for the russians to manipulate. i think they have been doing a pretty good job, has quite a lot of other countries in the world has done. a comparison between the rate of death of the nurses and doctors and the general rate of the number of dead people in the country from pandemics. francine: when he comes to the moscow government, it was one of the leaders in terms of walked on measures, and suddenly we

heard from the mayor that they are reopening quite soon, if not tomorrow. is it too soon to ease the lock so quickly? alexander: that is a discussion everywhere around the world, from london to washington and from moscow to stockholm. i say the reasons why the moscow government are trying to relax the anti-pandemic measures, it takes a big hit on the economy. hopefully there will be some balance in the way because i would rather say that the russia of reached the threshold 8500 new cases every day, the danger of it spreading in the that. is still so i hope the russian authorities will not be going too fast on that. understand the

threat and the danger. francine: talking about the easing standards, will the paper continue to be printed? we are seeing a lot of media under pressure around the world. would you think about merging with someone as consolidation takes hold, or is your family really attached to having a printed edition of "the evening standard"? alexander: we have reduced the 850,000f copies from 500,000. we have changed the editor-in-chief. clearly we have suffered because everybody has suffered. especially in print. well,l is doing very better than every other newspaper in the world. way to findy on the a way to get out. we will announce something quite soon, how we are going to turn around that.

the last thing you want to do is actually close the paper, which having its 200th anniversary in 2027. we are feeding 100,000 people every day with a few charities, witches really an outstanding achievement. solution will find a finally. francine: when you say there will be a big announcement, doesn't mean reducing the size, or are you still committed to this kind of -- does it mean reducing the size, or are you still committed to this kind of media? we want to stay committed to the print. we are developing a digital newspaper. hopefully we will keep the print, but we also are putting a lot of emphasis on the digital

evening standard as well. must to be done. do you know how long george osborne plans to stay on as editor? alexander: you had better put this question to him. francine: we will. alexander: it has not been confirmed. francine: thank you so much for joining us, alexander lebed of -- alexander lebedev. we were inspecting a big rally shortly. that is what we had in the u.s. also market movement when it comes to currency. stocks are slipping after this historic rally for the dollar rising. coming up, we speak to eric collins. founder of a fund that supports ethnic minorities. that is coming up next, and this is bloomberg. ♪

francine: this is "bloomberg surveillance." let's get straight to the bloomberg business with dani burger. occidental is reviewing ways to reduce its debt pile. the company is considering reducing stakes in oil and gas fields in oman. its holding in the area could be valid at more than a billion dollars. the company is also open to divesting other assets in the region. france is earmarking 15 billion euro to help it struggling airspace sector. it includes expansion of payroll subsidies and funds for developing greener options. loan guarantees are also extended to the likes of air

france klm. cathay pacific has announced a $5 billion u.s. recapitalization plan, including a rights issue to battle the unprecedented difficulty brought on by the coronavirus. even before the pandemic, cathay pacific was under in norma's pressure -- under enormous pressure. his response is to criticism from all sides. francine: let's take a look at what you should be watching out for later today. in a few minutes from now we will get your area gdp. nato secretary-general again stoltenberg will deliver an address. to leave rates above zero and committed to reusing their full range of tools to support the u.s. economy. coming up, we speak to eric collins, founder of an ethnic

fund to help ethnic minorities. that is coming up next, and this is bloomberg. ♪

francine: economics, finance,

politics. this is "bloomberg surveillance." impact x is a venture capital fund which makes direct investments in startups by black and female leaders in europe. it aims to support business which would otherwise be disproportionately underfunded. its chief executive, eric pa collins, says the funds should ethnic to back businesses, especially in their own communities. eric, great to speak to you on bloomberg. will you see more people -- embracing the power of targeted spending? have you seen it in recent years, or do you think the protests we thought saw -- that we saw last week will accelerate? eric: thank you for having me. it is a great question. i have been dealing with the issue of investing and

underinvestment and the opportunity to invest in entrepreneursed for the last 30 years. i feel we need to go from platitudes to action. when i started as an entrepreneur and got my first venture capital, the numbers looked the same as they do 30 years later. less than 1% of venture capital and business capital goes to black entrepreneurs, and less run 4% goes to female teams. that number has not changed. what we need is not to continue looking at the problems saying it is terrible -- we should protest and do well with those sorts of things -- but then we need to do something, and that is to put our money where our mouth is, which is why impact x exists, so we can actually put pounds,ital, dollars, and pence into these situations. francine: this is what we have

been trying to figure out on bloomberg, is how you measure success, how you measure the world becoming more equal. how much money are you hoping to raise for impact x? your message is basically if you believe in something, then put your money to use to drive the results that you want. our people doing it or are they just talking the talk? eric: that is the question of going from platitudes to action, i believe. frankly, what we have noted is the pipeline that we have created in europe consists of over 600 companies. of those 600 companies, if we look at the capital need of those companies, about $300 million is needed in business pounds in order to fund their need. when we look at them fully scaled, over 3 billion is needed get the to be able to full scale capital need. that is a huge number, and we know that around the world, not

that much money is being put into underrepresented entrepreneurs, whether they be women or people of color. frankly, that is not going to be done by organizations, or it has not been done classically by organizations. to these organizations, we challenge them, you need to talk to organizations like impact x about how do we create pipeline, how do we vet companies, how are we able to find such interesting companies that we think are going to be the next amazon, the next google, the next airbnb? how are we finding those companies come and how are we helping them to grow? if you are and able to find them, what are we doing in order to make that happen? if you want to change the situation, use the levers that you actually have. for venture capital companies and private equity companies around the world, what they have is capital, what they do is invest. what they do is try and build

companies. feel free to follow our example, and partner with impact x. we would like to see more funding targeting underrepresented entrepreneurs. francine: i believe you are trying to raise 100 million pounds. what kind of conversations are you having with institutional funds? is there appetite for what you're doing? eric: it is a very interesting question. there is a lot of appetite for high network individuals on both sides of the atlantic. currently we have high network individuals on the east and west coast of the united states and in the u.k. and in france. we can interest from family in doubleo believe bottom line -- who believe in financial returns, who stay in the fun. secondarily, we believe in impact being measured in positive social impact. in our situation, we are looking for job creation, particularly

among people underrepresented, and underrepresented employees. there are family offices who are institutional investors who believe in that message and are interested in talking to us. with more established organizations, that is a buzz saw challenge. i.e., some people don't actually believe that underrepresented entrepreneurs are a good investment risk, so we don't even speak with those organizations because it is not going to be helpful for them or for us. secondarily, many funds believe you need to have a proven investment thesis, and they have not been a huge number in europe organizations who actually target underrepresented entrepreneurs. we are changing that every day by our track record, but that has to become part of the conversation. institutional investors are beginning to hear the message and asking for more meetings, but up until now, as you might note, there are not a lot of institutional investors who have

gotten to the conclusion that underrepresented entrepreneurs are the pathway to significant financial return. where one of those who believe that is actually the case. thankne: eric collins, you so much. i hope we get you back really soon. this is what the markets are doing yesterday. we saw an incredible rally in 100%.s., that has not filtered through to europe. the focus is on currencies and what the dollar is doing. treasuries advancing, dollar rising for the first time in nine days. "when burke surveillance" continues in the next hour. -- "bloomberg surveillance continues in the next hour. this is bloomberg. ♪

francine: back on top, the s&p 500 erases this year's losses, seeing an almost 45% rally from its march low. christine lagarde defends the ecb crisis measures as the world bank sees the worst local recession since the second world war. and staying in the air, embattled hong kong carrier cathay pacific becomes the latest airline to get a government lifeline in the wake of the pandemic, with a $5 billion recap plan. good morning, everyone. this is "bloomberg surveillance." i'm francine lacqua, here in london. tom keene in new york. i know we need to talk about the dollar and the rally, but we are also getting breaking in terms of data and the euro area and gdp is a bit worse than expected. first court of gdp shrinking 3.6% -- first quarter gdp shrinking 3.6%. it is better than expected -- i stand corrected. tom: it is