and the fed. the trillions of dollars of early and often aid has stabilized america in the depth of the pandemic. what will the economy look like six months on? the january 27, 2021 meeting. mission accomplished again from j.p. morgan. 17 to hertz rent-a-car. the powell put has vanquished the bears. the secretary of state of the united states of america says the hong kong and shanghai banking corporation has assisted chinese communist party in " tactics" against the united kingdom. t is aompeo says i corporate kowtow. of notbeen guilty

discussing enough what the standard chartered bank and hsbc is doing where they are saying they are going to agree to whatever with new security rules of hong kong. how big a deal of this in your london? francine: well, it was quite a big deal when they announced it. i think you and i spoke to stephen engle. he reminded us, it goes to show may be the influence that beijing has on some of these companies if they want to have licenses in mainland china. this is actually quite difficult to dig into the deep root of it. now, we understand that there is a backlash from investors. just yesterday, we had o aviva, one of the biggest investors in a lot of these banks, saying it is decisionable with the of hsbc and standard chartered,

it is uncomfortable about the bank's decisions. tom: absolutely fascinating what we see their. we have got lots of coverage through this hour and on through "bloomberg surveillance." theill be joined from school of chicago, the former leader of the central bank of india. right now with our first word news in new york city. >> good morning. the oecd warns that the global economy will slump 6% this year because of the coronavirus. , outputa second wave could fall 7.6%. the oecd also warned that governments withdrawn support from visitors and workers now could make the damage even worse. mike pompeo is blasting hsbc for backing china's move to impose new security legislation think hong kong test in hong kong. he accused the base -- in hong

kong. he accused the bank of coercive bully tactics against the u.k. the bank is not commenting. underminingump german chancellor angela merkel at a time when she is facing a growing pressure to get tough with russia's vladimir putin. president's decision to withdraw almost 10,000 troops from germany was welcomed a month ago. the u.s. has not officially notified berlin of the withdrawal. the u.s. navy moving to ban public displays of the confederate battle flag from ships after growing because to address racism. it is meant to uphold the navy's core values. 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. this is bloomberg. francine, tom? tom: thanks so much.

equities, bonds, currencies, commodities. a little bit of flatness in the equity markets. nasdaq futures up. there is no other way to put it. for of that guesstimates what apple will be doing for the rest of the year. that is part of the mix right now. in the bond market, there is no question yields come in and they come in quite nicely from .92% on the 10 year over the last couple of days, we have reached below .80%. what a good conversation with seorge about foreign exchange' reaffirmation of stronger euro and a decidedly weaker dollar. francine: he was also very good on pound. stocks are slipping again. the oecd about two hours ago gave a warning on the economy and it seems to just may be have shaken the memory of the markets on the fact that, look, this disease is not over yet, the

pandemic is not over yet. you look at dollar, holding a three month low against its peers. crude oil retreating down. tom: very good. it is an extraordinary day. we will be very much focused on economics toward the fed meeting. there is still an america transfixed by this moment. you see it with cultural announcements and with the fox television network show "cops." with this, there are symbols. joining us now, our chief washington correspondent, kevin cirilli. the ultimate symbol of the moment is the set of fences wrapped around president trump's white house. when does the fence near the church, when does that fence either be moved or come down? >> the city came out and said sometime within the next week, actually, they are going to

reopen lafayette square park, which of course has now been the &,e of historic illustration as you recall, in the past week. in terms of where the conversation is moving, there is a senate policing reform bill the upper chamber come of course controlled by mitch mcconnell. was upay, mark meadows on capitol hill with jared kushner and some other of the top advisors to the president meeting with senator tim scott, a republican from south carolina , who also is african-american, the only african-american senator republican. they are now looking at policing reform. this is definitely something that republicans are now working on. this is how democrats have also come out with proposals of their own. tom: right. but do we know what the president is working on? i reviewed the many tweets and i don't detect a plan.

i understand the senator, mr. scott. i understand the political formedes but for those against the president, is there any demonstrable plan from president trump? >> i think there is two areas of agreement. one is the potential to remove the chokehold as a mechanism for law enforcement to utilize. second is to look into the past actions and comments on police officers, particularly those with a history of making racist remarks. --t is something that could that there could be consensus on. also, this idea of better police training as well. beyond that, the president is not going to say he wants to defund police. even joe biden has said he does not want to defund police. i was struck by some of the out. that came

majority of americans, republicans and democrats, are just wanting there to be a period of calm. they want a sense of normalcy. the unrest over the last several weeks is something the administration feels has hurt them at a national polling level. i think the president, from a political standpoint, is facing the pressure of poor polls against biden. tom: right. francine: kevin, how will the president use the economy? the fact that the u.s. is now officially in a recession may make it problematic, but we also had some pretty good figures on friday from employment. how will the president use that? kevin: this is where it gets interesting. the national polls and the battleground polls have the advantage to biden. trump is still beating biden on who's better to handle the economy. that is their glimmer of hope.

that is what republicans are seizing on. when i talked to the sources on the reelection campaign, that's what they tell me. this drumbeat of good and positive reopening economic indicators they are going to use as a set up to say, we want to reopen the economy. democrats want to keep it shut down. that's where the debate is moving but it's all dependent upon the economy moving in the right direction. francine: thank you so much, kevin cirilli, bloomberg's chief washington correspondent. coming up shortly, joseph amato, neuberger berman group president. we will talk about some of the valuations out there. this is bloomberg. ♪

♪ good morning. "bloomberg surveillance." francine lacqua in london. i'm in new york on our fed special today. good conversation, good analysis of what we will see out of chairman powell. scott minerd will be with us. has beenor extremely cautious on the markets. gary stern will be with us. in my estimation, by far the most underrated of the fed president. alan blinder with us and diane swonk as well. pulse onnk with that the midwest economy at grant

thorton will be a timely conversation. at neubergeris berman group, a really interesting shop in new york. yes, they manage money, but they have a certain panache to it, certain style. we are still waiting for joseph amato's hit movie. it is out there somewhere. he drives forward equity coverage for newberger berman -- uberger berman. momentum and value. who is going to win out going forward? does momentum keep momenting or does value catch up? joseph: good morning. good to be with you this morning. it has certainly been a pretty amazing contrast over the course of the last couple of months between quality growth and momentum versus cyclicals.

least, since this crisis has occurred, quality and momentum have won out in a huge way. it is extraordinary that nasdaq is a double digits -- is up double digits so far this year. it's pretty extraordinary. russell 2000 value is still down 15%-20%. that disparity is still quite significant. we are seeing some of our teams rotate out of some of those quality and momentum names into what i would describe as quality cyclicals. i think as the economy recovers, high-quality cyclicals, whether they be in the financial space, industrial space or others, i think are in for a better run here over the near term as the economy starts that recovery process that people have gotten so excited about in the last couple of weeks. martin adams in

equities for bloomberg intelligence is really quiet adamant that there is a miss estimation about earnings. is the market pricing in earnings recovery are moving up in the income statement in pricing in the shock of a revenue recovery? well, i think of the markets are certainly -- i think the markets are certainly expecting that 2021, you will see a strong earnings recovery. certainly in that segment that you referenced earlier, the larger quality names who had more durability through this challenging period are going to see better earnings recovery. 2020 is essentially a write up for most. i don't think most care where 2020 ends up.

in those larger, quality names, i think the confidence level that they will recover to earnings levels of 2019 is quite high and that is reflected in valuations today. at the same time, you move down the cap structure, capsize. i think there is still lots of skepticism that 2021 earnings will be anywhere near 2019. that is the debate in the market right now, which is right now, i think people may be confusing the speed of the reopening with the strength of the recovery. i think we are focusing on trying to assess the strength of that recovery and when you will be able to recapture, whether it is economic activity. gdp dollars of 2019, when do you get back to that level? francine: good morning from london. is there an assumption in the markets or in earnings forecasts that actually the pandemic is over? think anyone is

assuming the pandemic is over. i think there is definitely a legitimate concern about a second wave. i think the debate about a second wave is whether it creates more shutdown or whether it is isolated clusters that reduce certain levels of economic activity but do not have the comprehensive level of shutdown that we saw back in march and april. science experts expect some level of a second wave. historically, viruses like this tend to have a second wave. our underlying assumption is that there will be some level of that but not to the extent that we saw back in march, april, and not having the corresponding impact on economic activity. it may affect the speed of that reopening and recovery. that is one of the things that i think everyone is worried about. francine: thank you so much. joseph amato there of neuberger

berman group stays with us. we will have full coverage of the federick decision beginning at 2:00 p.m. in new york, 7:00 in london. this is bloomberg. ♪

♪ this is "bloomberg surveillance." tom and francine from london and new york. we are talking about market valuations. let's get back to joseph amato from neuberger berman.

i look at all the protests in the u.s., london, and elsewhere asking for more justice and less inequality. will it change the markets and the way investors choose what company they want to be invested in? are we going to have more indices on diversity? will it actually change the value of a company because of it? joseph: well, i do think that the health crisis and economic crisis that we have gone through is really -- has really exposed some real challenges and faultlines, if you will, in certainly the u.s. and a number of other economies when you see the inequalities as it relates to income, educational opportunities, health care access, criminal justice. these things have shown to be even more of a problem than they were before. as it relates to investors, we have talked a lot over a number of years about esg investing, sustainable investing.

we have had strategies related to those -- that type of investing for decades now. i think that is going to be an even deeper dialogue with clients as they think about the sustainability of companies that they invest in and push companies hard to understand how they are treating their labor force, how they are dealing with some of the issues we have been talking about. it is going to change. it is going to highlight and focus that much more on sustainability and esg. many investors in the past have felt that is a bit of a theoretical discussion. when now you see the reality of it and i think it is really going to regain focus. francine: do we have the right data for you and companies to actually make the right amount of decisions? do we have the right data and transparency to understanding what each company does? juliette: it is a huge -- joseph: it is a huge issue. you know, we have been big

supporters of increased disclosure. a lot of a proxy questions have come up around increased disclosure as it relates to environmental issues, the nature force.mpany's labor the more we can get on an equal footing, so we have a big supporters of sustainability, accounting standards have been pushed up. as you look across companies, you can more, and a deeper way understand and determine relative value and how these factors are affecting the company and ultimately, our focus is on the material factors that do affect companies' pe rformance. tom: is neuberger berman investing around a theme of there must be consolidation, for whatever reason, including all these new social stresses? do you assume consolidation of the american corporation? tom, thatdon't think,

that has been an underlying issue driving a lot of investment activity. certainly, there are different forces affecting different segments of the economy, whether you see more consolidation in the financial services sector or amongst small and midsize banks or in other elements of the economy. certainly, when you go through the economic stresses, there are going to be those companies that are going to struggle to survive. one of the both challenges and opportunities of what the fed has done, it has allowed frankly week companies to survive by providing capital and coming in and essentially keeping the capital markets open, whether it be for quality companies are companies that are struggling more. that may mitigate some of the lidation that you would see.

francine: thank you so much. joseph amato of neuberger berman . bank of italy governor joins us for an exclusive a virtual conversation on the outlook for after then economy covid-19 crisis and the response of the european to the pandemic. that interview coming up. this is bloomberg. ♪

francine: this is bloomberg surveillance. >> let's get to bloomberg first word news. senate republicans are dropping their own proposal for reforming

police practice, including racial bias training, increased use of body cameras and enacting the first antilynching law. house democrats have come out with your proposal and would like to make it easier to sue and prosecute police accused of wrongdoing. this is in response to the killing of george floyd in minneapolis. u.s. authorities are investigating an attack at the highest scheme traced to india, in an attempt to seal confidential information from investigative journalists and advocacy groups fighting climate change. it is unclear who founded the hacking operation. one of the beneficiaries apparently was the embattled german tech firm that says they have not been in touch with any hacker groups. the u.k. has not seen a time like this since the industrial revolution. they have gone two months without burning coal. the power generation has mixed from 40% seven years ago to 2.5%

in 2019. one of the big reasons?cheaper renewable fuels meeting demand. times,lect a sign of the paramount has canceled the long-running show "cops," a reality show the glorified police work entering its 31st season. "cops" ran for 25 years before the network dropped the program on fox. global news, 24 hours a day on-air on tictoc and twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. francine: thank you. in an effort to combat the market is left its own devices and it has not provided ventilators or therapeutic drugs.

capitalizing on america's private sector requires incentives to produce such social goals. us, he is an joins nyu professor. when you look at what we have been through and what will happen in the future, willis ?reate a new social contract i don't know if you can hear us, but will this create a new social contract? roman: i would hope so. what i would hope would happen is there would be no pressure action andovernment excessive spending, but there will be more understanding that what we need is a state that delivers social markets. this is not a difficult point to understand.

you need to repurpose your production to produce instead of shoes masks. it way the market would do this is there would be demand for masks.the price of masks would go up. presumably, they would come forward and make investments in production. of course, it will not do that because once they pay for the production, there is no guarantee that it will last for a long time. that somebody will purchase the masks. the government will guarantee that the investment would pay off. if the market at all can deliver , it would be delayed. and we have seen that in the united states. we do not have enough of all of it two we badly needed

months ago, and now we are reopening and still don't have enough. the only states that are prepared are three states, which are sparsely populated. so this is really a dire situation. we have alaska, wyoming, and montana. there are only three states but they are small states. the states that that supposedly generate jobs that the president touts, like florida does, are the ones that had an extraordinary rise in cases. the numbers are really moving up, and we hope they will stabilize, but take florida. target is about five to 15 positive cases a day to face other people infected. lord has one -- florida has one.

so i hope they will realize this and that media will do the educating so we actually can reset now and move forward in a safeway. -- safe way. tom: roman frydman, it was wonderful to speak to you. it is about imperfect knowledge economics. today, be joined later rating against your theory, whether a pandemic or whether it is the challenges we afford with our fiscal debt, how can we duck policylicy -- dove tail with our economics for a better society? roman: thanks, tom. i appreciate your comment about imperfect economics.

almost as much as i appreciate you staying within our with me on bloomberg radio talking about it. let me give you a direct answer. what we learned since i spoke with you about 11 years ago is there is something we can actually say when we face a wealth of such unknown, as covid. we can still think about the uncertainty, although we do not -- we cannot precisely compute the risks, standard way. we can think of uncertainties within a certain range. let me bring this in practically. police lookd the like in a world like this? right now we do not know exactly. we do not know exactly about two where we would be that judging knew

from an initial spike everywhere, not just the united states, we knew that the lower end looked dire. we don't have time to review numbers, but their well-known. do? did we instead of ensuring against the not thed, which is expected outcome but the lower end outcome, we proceeded doing nothing basically. and what imperfect knowledge economics will tell you is you need to ensure against the worst outcome. that is the development of it. tom: let's do this. let me come back. we are going to go to break and then come back. i really want to drive forward your original policy prescriptions. with us from new york university, roman frydman. we will continue. this is bloomberg. good morning. ♪

tom: good morning. "bloomberg surveillance," francine lacqua in london, tom keene in new york. the fed day, we will do that at 2:00 p.m.. this is a special treat. it is academic but profoundly important. clear allgoff made economics must listen to roman frydman of new york university. hugely controversial over the years on what policy should be out of our economics. professor frydman, we speak to you now in an imperfect labor economy, in a job depression.

you were talking about this strange word dynamism. we need a dynamic america. how do we get there, professor? roman: we get there by activating, by incentivizing, by understanding two things. estate cannot produce -- the state cannot produce. we need to rely on the private sector. yet, the private sector will not deliver the functional goods we now need to recover from the covid to deal with climate and to actually get jobs that are durable and meaningful. statey to do that is the being active in specific areas in which we need to incentivize the private sector so the private sector will actually deliver. said that in the united states with the internet,

but we basically need to reset. not just because of the response against the pandemic, but we need to reset the relationship between the private sector and state. and accepting the world is imperfect means the state cannot produce by itself. that does not mean that the state could not play an active role in incentivizing the private sector.we have seen that very successfully world.ross the it requires two things, clear objectives, and clear incentives and mobilization on the part of the state. take new zealand, among many. governmenty of the from the beginning was helped first, economy second. the focus on that produce a rapid response to the health crisis. cases,land has had zero and therefore, no economic fallout that we are experiencing. germany.

the government realized mobilizing the private sector is crucial. the total package was more than $2 trillion we spent on the stimulus, precisely on the policies that i've been advocating. they are reopening out safely, and the numbers speak for themselves. sure. francine: thank you so much. syndicatey in project if you would like to read roman frydman's piece. 23 and me has found certain blood types are less susceptible to contracting the coronavirus, founding from a survey that says the o-type is especially resilient. the company chief executive says that changes the results. >> 750,000 customers took the survey. we have over 12,000 people who

said they had covid-19. 2000 said they were hospitalized. we were able to analyze the data. we found that the o-blood type looks like it is protective. it is not a huge increase in productivity but 9% to 18% less likely to be infected and severe. it is an important step, and i want to emphasize that there was more research to be found here, which is part of the reason why we are still enrolling people in the study. we are giving away 10,000 kits for anyone who has been hospitalized who has covid-19 in part because i believe we have the potential to find an attic association -- find genetic association to help us know who is the most vulnerable and can we do more to protect his people? is good news if you aretype oh, a --re

type-o, but have you found any other transfer any other blood types? >> o looks like you have a decreased risk and the others looked similar. the important thing with biology and science is first trying to understand why is it that o looks like it is potentially protective and you have less of a risk? so understanding that biology and then will that help translate into a genetic test that would help be able to identify people to say, hey, you should be more protective or helping indexing discovery or drug discovery in any way. >> what is interesting about covid is can spread so fast undetected, which means some people get sick and others not at all. the question is why? genes and your research indicates genes can play a role here. are there any other clues about the role that your own genetics can play?

>> that is exactly what we are looking to see. the ace of pneumatics would be interesting, and that is why we are giving away kits because those people are hard to find. anyone, whether a customer or not, can participate in this research. a lot of add, infectious diseases, like norovirus, known as the cruise ship virus, there are genetic mutations that say these individuals are significantly less likely to get the disease. even things like hiv, there are mutations people are significantly less likely to be infected with who had the mutation. we are looking for that kind of mutation that would help people understand whether or not they are potentially significantly less at risk for getting infected. >> most of the study so far have had a few thousand participants. your study involved hundreds of thousands of participants. still, there's more work to do. how do you go from a hunch to

actionable information? >> like i said, i am really proud. my customers stepped up and rallied. 750,000 people took us early and it shows the power of having a community like 23andme. one thing i do need is more customers who have been hospitalized. there is a period of time. we need to make more discoveries and the science community needs to bed it and understand the biology -- vet it and understand the biology. and this will start to get integrated in how we manage covid-19. francine: that was the 23andme founder. we will talk about the pandemic coming up and covid-19 in bloomberg. ♪

ritika: this is "bloomberg surveillance." let's get the bloomberg business flash. willsions for bad loans widen the second quarter to the

highest level in more than a decade. the german bank says the money set aside will reach $908 million, a threat to the restructuring plan. they are trying to restore profits after five years of losses. morgan stanley expects to make acquisitions in the asset management industry. told her conference he is not shy about deals but "hit our sweet spot."there has been a rush to consult an asset management business, usually from low-cost index funds and passive investing. hundreds of thousands investors petroleum.g to there are two things in common for the companies, both have filed for bankruptcy and saw their shares -- start the week shares double to start the week. many investors are buying the shares through the robin hood pp. that is -- robin hood app. francine: we continue to attract

the virus. bloomberg developed a partnership with a leading firm in covid-19. johns hopkins has been at the forefront of the response and we are bringing new insight from experts in public health, infectious disease and emergency preparedness. joining us now is lauren sauer, a johns hopkins assistant professor of emergency medicine. thank you for joining us. the world health organization seems to be going backwards and forwards about how the virus gets spread from people a some dramatic -- from people with no symptoms. what do we know about the virus being spread with people with no symptoms? lauren: we have a lot to learn about how it occurs. ateral studies are looking the rate, and when we talk about asymptotic versus presymptomatic. i much of what we know is based on the transmission around

people who have symptoms, whether mild or severe. francine: what do we know about genetics? we were hearing earlier if you have the type o, there is a lesser chance of you developing the virus into something that is worried. lauren: yeah, so the 23andme study that found blood type o, people were less susceptible to severity of illness, that was a study of about 10,000 participants. what it really showed his we have a lot more to learn about how host genetics impact how people are susceptible to covid-19. there was a study that looked at post in attics or human genetics and the impact on people with and one in china, italy and spain, and they found that italy and spain one found that type a was created a likelihood of increase of

severity and the chinese study also looked at susceptibility to covid-19. is the biggeste study done, and the only one i think that has looked purely at an observational study on blood type. this is how we are going to start to learn so much more about this disease because it is reaching people who have never been hospitalized, never sought care, and those are the ways we are going to learn more broadly about covid-19 across the population. francine: we talk about the study made in china, the one in is there anme, overall study that gathers individual studies so we actually put the data together? or is that clinically impossible? lauren: those types of studies are called meta-analyses, and they find the papers that have rigorous and similar methods, so you have to go through each paper individually, understand

their methods, their results, understand their underlying data, and the assumptions they made in their calculations, and then you combine those papers together. as more of these papers come out, you will be able -- people will be able to do meta-analyses of these papers to have a broader understanding, a more population wide understanding. there are challenges associated with meta-analyses, and there are only so many things you can analyze but they can be powerful. francine: where are we seeing spikes at the moment? how do you possible second wave? do you track by the number of people in the hospital or is there a greater way to see before it arrives? lauren: testing continues to be the best way, contact tracing can be helpful once you have an understanding of where the transmission links are occurring in communities in communities. -- inckbone because

communities, you need testing as the backbone because you want to catch people as soon as they develop disease, and then you want to understand who their contacts are and use quarantine or isolation to limit that as much as possible. in over aing spikes dozen states, probably since memorial day, so there are cases across the country that are having increases. some cases -- sorry. francine: thank you so much. we had to leave it there. lauren sauer of johns hopkins. this is uber. -- this is bloomberg. ♪

♪ >> hard to imagine that we would

see a quick v-shaped recovery. i think it is going to be slow. >> i think the data suggest cyclical upturn in the third quarter. the choice between lives and livelihoods is a dilemma. the health and the economy go hand-in-hand. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from our bloomberg studios for our audience worldwide, good morning. we are live on bloomberg tv and radio. tom keene, just several hours away, trying to get our hands around the next phase of monetary policy at the federal reserve. tom: no question about that. what is so fascinating here, with scarlet fu leading our coverage this afternoon,