they be, or are they ok with rates being higher? >> they are trying to make life nice for the government. >> if you look at what the pandemic has done, it has exacerbated every division we had. >> the choice between life 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. >> from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ." with equity futures deeply negative, we are live on bloomberg tv and radio. it is the data nobody wanted to see, this cyclical reopening rotation in this market taking a pause as the data in several states starts to speak to an increase in infections. tom: this is the first day in

we shifte weeks where from recovering east coast cities with all of our bias there to the rest of america. it is not a pretty picture. what i find fascinating is axios moments ago features new mexico and oregon, where others are featuring arizona and texas. it is a state they are, a state here. i don't buy the second wave stuff. it just sums up to an expanded pandemic. jonathan: for real -- it is a moment for real humidity. not a moment to project -- for real humility. not a moment to project confidence. i think it was pretty clear in yesterday's news conference the fed is not going to do any tightening anytime soon. tom: i sort of blew it yesterday. you know i am not a fan of the dot plot, and i never looked at

dots on the bloomberg. it looks like an old line hockey stick from my youth. to 2022.t out and then miraculously, interest rates elevate somewhere out there longer term. i don't buy it for a minute. of a heada bit scratcher for me as well. lisa abramowicz, which got to talk about the data. a blowout payrolls report on friday. will the data this morning validate the optimism fueled by that huge upside surprise this past friday? lisa: the data you are talking about is at eight: 30 am wall street time, continuing and initial jobless claims in the united states. a lot of people expecting 1.5 or more million jobs lost. continuing claims will be the

focus come up with the expectation that they will continue to take downward. also what i am watching today, we've got ppi data, producer price index data coming out. this follows yesterday, showing no inflation whatsoever. very interesting to see whether we are seeing any of that, particularly in the food, and how it offsets deflation elsewhere. president trump is going to be in dallas, texas speaking at a roundtable about the economy. we are interested to see if he says anything about infrastructure spending. we know he has dabbled in that. he also may give some kind of proposal for police reform. interesting though, to your point about the virus cases, he is going to be in texas, the state that opened first, and is now seeing record hospitalizations for that region , raising questions about how he will address that. some campaign rallies on the agenda as well in the next several months. alongside tomz,

keene, together with myself, jonathan ferro. this is "bloomberg surveillance ." we have more labor market data at 8:30 a.m. eastern. today we have to start with the deteriorating situation independent. stability for about a month, and now several states begin to break down the wrong way. we want to start this morning's conversation with alessio de longis from invesco. ourlways, we will not ask guests to be epidemiologists. what i am interested from an investor perspective is not just how the pandemic data changes, but how investor attitude changes to those changes in the data. can you walk me through how you think investors will respond to the latest increase in infections we are seeing cross several state? alesio: this beginning of second wave is quite concerning because i think all of us investors would have expected a second wave, but wouldn't expect ash but would have expected it may be in the fall.

a second wave starting here in the u.s. -- but would have .xpected it may be in the fall a second wave starting here in the u.s. is a delicate situation. we started the reopening process in europe. we had successful reopening in asia, with a few exceptions. wesouth korea, for example, had a concerning ride. but broadly speaking, the second waves were proceeding quite weekly. between defensive encyclicals or from growth to value or from large to small caps were really large themes taking place in the last couple of weeks. belief thatere is a the bar to another lockdown is much higher because these states have now built out health care capacity to track and trace. it is far more forward than it was several months ago. what is your response to that?

allesio: it is natural to assume that over the last three or four months, we have gotten more prepared with respect to testing, with respect to the amount of capacity in the health care system to headless -- system to handle this. i think it is reasonable that the system is not as unprepared as we were the first time. with that in mind, the investment strategy should be focused on actually harvesting more credit premium across the credit spectrum in high-yield, and investment grade these spaces tend to rely more on the amount of monetary stimulus and credit stimulus we are seeing, which continues, while equities will suffer, to your point about , willpact on cyclicals suffer more from the impact on earnings than we are likely to see in the second half of the year. tom: if the v-shaped recovery

died yesterday with chairman powell's consistent comments, how does the equity market adjust to that? worry,s another wall of doesn't that benefit stocks? allesio: well, maybe not to the same extent, to be honest. because the first wave since the into fiscal stimulus was really about multiples expansion. was a rose, and there v-shaped recovery and starts, entirely driven by the price put it in multiples expansion. earnings, as we know, are still in a very difficult situation as they continue to fall. from this point on, to maintain that recovery and stocks, we need to see earnings. multiplest even of compression or spread.

credit, as we were arguing earlier, just being able to avoid a serious round of defaults and having the back of the federal reserve should allow credit to be harvested by investors. lisa: let's pick up on that and build. i know you have been recommending taking credit risk within the high-yield space over investment-grade in order to capture that extra risk premia. i am trying to understand the fed backstopping valuations to an extent, but not necessarily preventing companies from going bankrupt, as we see bankruptcy rates rising to the highest level since 2009. how do you draw this distinction, and how big a risk is bankruptcies escalate? risk,o: it is a serious and these are risky edits in some parts of the high-yield market. from our perspective, the

reminder is always to be very diversified in your credit portfolios. , oneore nimble investors approach early into the recovery is to invest in six income factors, such as quality, high-yield credit. staying down into the curve spectrum, and to the maturities spectrum past five years on both investment-grade and high-yield, and focusing on attractive quality and attractive spreads. when you look at the fixed income universe, you can draw an analogy if you have any equities, focusing on quality and activity factors rather than up in the risk spectrum in credit. tom: very quickly, does tech still lead? with all of the adjustments, the grimness we heard from chairman

powell, is that revenue billed at the techs the deal -- the be all and end all of the market? allesio: tech is where quality is today. in a low growth world, and in a , ald where more than ever globalized and diversified source of revenue growth will be important to diversify the economic risk, tech still leads. questions torovide the sustainability of that v-shaped. jonathan: always great to catch up with you there. alessio de longis of invest go -- of invesco. the market, just a subtle shift over the last several days. the nasdaq outperforming. treasury yields picking up a bit. the curve flatter.

all over the last couple of days, we take a bit of a pause on some of the optimism, maybe even exuberance, of the previous week. tom: some real nuance. some can call it profit taking, but you really wonder from here. byas really taken yesterday the persistent grimness from the chairman of the "new york times." it was really interesting, the wall of worry put up. isn't that good for stocks? jonathan: do we really need the chairman of the fed to tell us that the chairman of the fed -- to tell us that the v-shaped recovery was unlikely? what did the chairman say yesterday that was actually new, that changed anything? lasti thought mckee's question, i don't know if mckee will be invited back to the press conference next time, the chairman gave a very responsible

answer. i thought he did rate. jonathan: i would say that comms at the federal reserve were very strategic, putting michael mckee at the very end of the news conference so they could do a quick question and answer and run out the door. in the market right now, we break down session lows of 59 points for the s&p 500, down by 1.84%. later, afsaneh beschloss this thursday morning. this is bloomberg. with the first word news, i'm ritika gupta. a second wave of coronavirus cases emerging in the u.s. texas reported its highest one-day total since the pandemic emerged . reported 87 new cases. still, they say that surge cannot be linked directly to reopening. it powerful message from federal reserve chairman drone how --

chairman jerome powell. he says the central bank will keep umping stimulus into the economy until the country has healed from coronavirus. he says they are not even thinking about raising interest rates almost all officials forecast keeping it near zero through 2022. president's slip and polls may make it difficult to keep control of the senate. crisis and protests have hurt the president's popularity. the president met with senate majority leader mitch mcconnell yesterday. bloomberg learned the two discussed senate races. the european union reportedly will file antitrust charges against amazon. according to dow jones, it has to do with the way the world's largest online retailer treats third-party sellers. it would be the latest step in the eu's almost two-year investigation.

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 ritika gupta. this is bloomberg. ♪

chair powell: we are not thinking about raising rates. we are providing support for

this economy. we do think this is going to take some time. i think most forecasters believe that. jonathan: fed chair jay powell. we are not even thinking about thinking about raising interest rates. that is a line you will hear repeatedly for months, and maybe even years to come. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. this is "bloomberg surveillance ," live on bloomberg tv and radio. the open, two hours and about 12 minutes away, with equity futures at session lows, down 2% and change on the s&p 500. -67 points. the outperformance over the last three days comes from tech, the nasdaq against the small caps. in the bond market, treasuries bid, yields lower. we are down about 20 basis points on the 10 year. treasuries have been really firm this week. the curve is tighter. in foreign exchange, the story

of dollar weakness through much of the last several weeks, and for a fourth straight week, we get a little more dollar weakness yet again. for today's session, the euro just slightly negative. the euro coming back with a little bit of strength on the session. tom: dollar came back. it dropped like a rock off of the grimness from chairman powell yesterday. i would watch em currency as well the pandemic statistics. i don't know if they are correlated, but i am really watching mexican peso to see if that unravels. right now on the equity markets, gina martin adams runs equities for bloomberg intelligence. she has been phenomenal about saying you have to be in the market even with all of these collective walls of worry. we are thrilled we could get an update after the chairman spoke. translate the chairman's tone into actions to be taken in the equity market. what is your to do list of study

now after you heard from chairman powell? it is allview is about whether the rotation into value stocks can sustain in an environment of zero interest rate policy. you have to consider that, because we started to see that the value shock recovery was getting a little ahead of its skis. if interest rates are going to be held lower for longer, but you don't get a rise at the long end of the curve, which is really the question that started to bubble up to the surface over the last couple of days, then it is really tougher financials to make any money. at the same time, i've that time, i -- at the same think the fed chair threw cold water on the idea that we will get both anytime soon. the took away the sails of

market, which was already trading at moment pace and suggested we were due for some form of consolidation. lisa: you came out with a pretty bold diction showing that based on the earnings growth we are datag come of the initial out of companies showing better than expected growth, that likely the s&p would see new highs and continue rising throughout the year. given the resurgence in virus cases we are seeing in the likes of texas and arizona modest iq question any of these protection as being too optimistic? gina: just for the record, our official fair value for the s&p 500 is still below former peaks, but what we said in that report is we are already starting to see estimate revisions stabilize .

you could get below 33 hundred. however, if you get closer to the average pace of an economic recovery, that would imply, given this extremely accommodative interest rate aussie and a fed that is clearly -- but to clarify, we need to see an improvement in estimate revision. it is something we are on the lookout for. it is something i think will start to emerge, but we will have to follow the data for the extent of, and the duration and durability of that estimate revision before we get too excited about new peaks for the equity market. jonathan: can you walk us through where we expect to see those positive revisions to estimates? gina: you should see at across the board. what we are seeing right now is very negative expectations, reflected in the innings forecast from analysts.

so you are seeing everything in the 500 expected to produce negative eps growth all the way -- all the way .hrough the first quarter i think you should start to see cyclically oriented sectors, and particular some of the consumers , and produce much better estimate revision going into 2021. now, we are just stabilizing. will we start to see improvement in the outlook is huge. a lot of this is going to have to come from topline. the expectations are already that you will see a bit of margin recovery start to emerge. in order to get bottom line growth, you've got to see the topline forecast improve come which means it is dependent upon the economic outlook. some companies have even had to spend more to right size

operation for this unique recession experience. so it is not necessarily about cost-cutting and operational management. it really is now about the topline starting to emerge as we take ourselves out of this. jonathan: fantastic to catch up with you this week. gina martin adams of bloomberg intelligence. in this market, equity futures near session lows. amazon down around 2% in the premarket area just a little bit of news around the story and europe. unionthe european planning to file a formal antitrust charge against amazon from their operating in a market for third-party sellers. we will find out more perhaps next week or a week after when charges are expected to be filed to me, i found it interesting there is any reaction at all.

typically there is a muted response, but europe has been particularly aggressive on this front, and has been known to evolve. -- known to followthrough. jonathan: down 2%, but certainly something to keep an eye on. we are down 63, off i to percent on the s&p 500. sentiment breaking down, and i think the next couple of days will try to establish whether this is just a cyclical rotation to get paul's, or if there's very real concern across hecreasing infections in t states and what it means for the economy. tom: my major question every day is should i go to cash. wait, i am already in cash. it feels good. jonathan: can you tell us when you are not in cash? that might be useful. just for the contra indicator. tom: in my youth. jonathan: in the 1920's.

from new york, alongside tom, i'm jonathan ferro, together with lisa abramowicz. this is "bloomberg surveillance ," with equity futures down 2%. this is bloomberg. ♪

jonathan: from new york city, this is "bloomberg surveillance ." we are live on bloomberg tv and bloomberg radio. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. two hours away from the opening bell in new york. equity futures near session lows , the is be 500 off by around -- the s&p 500 off by around 2%. in the bond market, flipped on its head as well. now lower yields through this weekend a flatter curve. your 10 year yield 20 basis points. on the week so far, down three basis points on the session, south of 70 basis points. in foreign exchange, the dollar weaker for a fourth straight

week. at 0.7%. coming in the euro by about 0.1%. still reflecting almost a week after the payrolls report on a blowout upside positive surprise which fueled a lot of optimism about the future. it was always going to be about the subsequent data. abouthe dow this morning jobless claims and continuous inims, will we see it track a similar way and start to push much lower? at 8:30,ms coming out this is going to be really a 2 million off of and 1.8 million statistic. times, 10 times worse than normal. but what everyone is going to be looking at, including andrew hollenhorst of citigroup, is

going to be continuing claims, which is a much more important trend and verification of where we are in this american economy. andrew, what will continuing claims due today? andrew: with think it is going to go down slightly, coming down from very elevated levels. it has been the better indicator if you want a read in terms of what is happening on rehiring. continuing claims is the one to watch. the seasonal adjustment is moving these around by millions on a week to week basis. this morning i am not sure, but it would certainly be nice if we saw that moving lower this morning. tom: did you adjust your

citigroup view of the dot plot yesterday? andrew: the dot plot came in just about how we thought it would, and that is pretty consistent with how we see the fed proceeding. we are a lot more optimistic on what the strength of the rebound will look like, and probably even a little more optimistic on inflation getting higher, although there we are more similar to the fed. not even chair powell thinking about thinking about raising rates. we are clearly a long way out from the first rate hike. as long as inflation stays low, even if the fed gets a surprise to the upside on the data, they can still stay very dovish. jonathan: what changed with that news conference yesterday? i sat through the whole thing, like many, and was struck how everything he said was pretty much in line with consensus

view. what difficult to describe the trajectory of the recovery will look like. no one thinks the fed is going to raise rates through 2022. they basically formalize that. andrew: i think a lot of what happened yesterday is what was expected. you look at the 2020 two projection for unemployment, the range was between 4.5% and 12%, so just an incredible amount of uncertainty here. powell did a good job of reflecting it. what we did learn is that this thatfed -- this is a fed is going to continue to be dovish in support of the economy, no matter what happens in terms of concern about financial stability in the near term.

right now, clearly focused on supporting the economy. i think we knew that, but maybe we know that a little bit more. at least what happened yesterday was the fed committing to at thee to purchase current rate, now continuing at the same rate. that was new information. maybe not unexpected, but we also got this heads up that the fed discussed yield curve control, discussed forward guidance. those are probably going to come up later this summer, maybe in september. i agree that the forecast is not different than what we have seen from a lot of private-sector forecasts. there should not have been a large surprise out of the fed. jonathan: they did mention yield curve control. what i am trying to figure out is whether yield curve control for this committee as a complement to what they have done or a separate tool with they get worse. which way would you be leaning? andrew: i think it is really a

complement where they already are. stay aroundkely to zero through 2022. when the fed has talked about yield curve control, they have talked about it very differently than what we see. this is not going to be about controlling 10 year yields or yields further out the curve. this is going to be about really just enhancing and clarifying any guidance they give. what i would expect is that rates are not going to move , we get inflation at or we just, and then loosely say that rates should be consistent with the policy path. something more operative in the front end of the curve than the backend of the curve. yield curve control

is coming, but different leave then we have seen it elsewhere in the world. lisa: i am trying to understand, with the unemployment picture, are we entering that second wave of unemployment where the first workers were laid off where the lower wage ones who had more jobs, and now we will see the management roles laid off? where are you looking for how signs of how deep that will be? andrew: in the near term, we continue to watch the claims numbers. that is quite interesting. continuing claims may be coming down, but initial claims are staying very elevated then we have seen before. that indicates there's a lot of churn going on. yes, there's some rehiring going .n more people are being hired now than are being laid off.

what you're looking then is in the next jobs report, you see, them --ance, a lot of but we may be coming back. maybe in other industries management, services and support, those functions, you may see some continued job losses in those areas. tom: i've got to go back to what you just said about yield curve control. i don't buy it for a minute. that thud was john b taylor at stanford falling out of his bed listening to this conversation. it is rules and discretion. we have clearly abandoned rules. we have a new form of discretion, and with immense respect for catherine mann and her shop, there's no way you can be discreet bout jawboning yield curve control. you either do it or you don't.

how are they going to affect twod curve control in the or three your space? andrew: it is very difficult for any central bank to completely tie their hands to a policy path. i would say that is particularly difficult in an environment where there is so much uncertainty around the forecast. remember the 2022 forecast? wheren you today know the correct level of two year yields is? i agree, it is very difficult to commit to a you would level. tom: -- commit to a yield level. tom: i can't think of any front-line economist who would say throughout the dot plot. should we throw out the dot plot? i mean, it is ridiculous, the

dispersion of guesstimates out 24 months. jon ferro can't even figure out what ac milan is going to do 23t year, yet alone when he -- yet alone 2023. [laughter] andrew: i think it certainly emphasizes the difficulties around having a. lot. we have seen that a few times over the past years, that in scenarios with heightened uncertainty, sometimes the last thing you want to do is give the .mpression of more insert changed, and the reason you are hearing less is because right now, the fed wants us to know that they are being supportive of the economy. that is an acceptable cost to

everything you can to support the economy right now. jonathan: andrew hollenhorst of citi, always good to catch up with you. 7:40 eastern, good morning. you see the things i get fired up about. this drives you insane. yield curve control. i just need to push it every morning. yield curve control. tom: we have been so honored with guests. we had gary stern with lights out yesterday on the fed show with scarlet fu. dr. stern was absolutely fabulous. the honor of having olivier .lanchard with us none of these people are buying the smoke and mirrors. it is theoretically hogwash. can i say that on radio? jonathan: of course. what i would say back is what is new about it? forward guidance has been around to anchor the front end for a long time. what is the difference by adding

yield curve control on top of that to say were the front end is going to be? .ar more commercial but i don't think they do that. jonathan: carl riccadonna -- tom: carl riccadonna was great on this. i just don't know how they give out two years three years. they go shorter and shorter like greenspan used to do. jonathan: you wonder what would happen to this market if we had a greenspan fed out there -- fed back. we would have a very different set of financial conditions, i imagine. from new york city, good morning. equity futures down 1.5% on the 500 get this is. on the s&p 500. this is bloomberg. viviana: the labor market focused --ritika: the labor

market focused today shifts back to job losses. more americans filed for bankruptcy. the total number of claims of , 11 times the level prior to the pandemic. present trump will resume his june 19 inllies tulsa, oklahoma come on a date and at a place that holds meaning for african-americans. campaign says he has built success for african-americans. keep theistration will ates of confederate leaders fort hood, fort bragg, and others that were the names of

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>> i definitely think we are going to need another bipartisan legislation to put more money into the economy. i think as we said, we don't

want to rush into that because we want to be both careful at this point in seeing how the money is still in the economy, and i think we need to be much more targeted at this point. jonathan: secretary mnuchin, the treasury secretary come on the fiscal path ahead. good morning to you all. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. getting you in shape for the opening bell this thursday morning. one hour and 42 minutes away from that cash open, with equity futures down 54 points on the .&p 500, -2% in the bond market, your tenure yield coming in at around about three basis points. , 0.7%.10 year dollar weakness replaced by dollar strength in g10. cable down by around 0.6%.

in the commodity market, let's talk about what is happening with crude right now. to $37oming down by 4% .93. i want to reflect on michael mckee's question from yesterday in the news conference. exchange between michael mckee and the federal reserve chairman, jay powell. it was a quick answer, and then he got out of there quickly. but i can tell you, that was the question that a lot of people wanted to be heard in this news conference. i was really disappointed that it came at the end because i wanted to hear people follow-up, push him more, because i do not believe it is as binary as the federal reserve leads us to believe. they can do more targeted things. it is not just about the blunt tool of interest rates. we have seen that with the things they've launched over the past month or so.

tom: there's no question about that. to be fair to chairman powell, who i think gets better and better at these press conferences -- remember my am forced to listen to every word of it because i am on air with scarlet fu -- he had two statements within the conference on the pandemic. i believe near the end come on the challenges this nation faces with protests. i thought michael mckee ended the press conference with a discussion of asset inflation, and then really addressing the inequalities which were very extraordinary. there's a change in the air, and it's not funny. in the pandemic, the trend has reversed to spread across this nation and spread out of control in so many developing

economies. is a doctor out of yale university. he had public service with barack obama in the apartment -- the but far more department of health, but far more people in the boston community know that he has been a true star of medicine in a very medical community. how much so? he has done the rarest of rare things in medicine, he has thrown out the first pitch at fenway park. we are thrilled that he could join us this morning on the pandemic. in are so esteemed dermatology, oncology, a broad set of internal medicine. do you by the idea of a second wave, or is it just the spread of the first wave of this virus? on march 13, the president declared a national emergency for our country, and unfortunately, the latest data

suggest that that is far from over. we are seeing rising cases and hospitalizations in the southeast and enroll -- and in rural parts of our country. if hospitals are overwhelmed, patients can't get the cure they need and deserve. as we enter the summer, as businesses want to reopen, everybody wants to have confidence that this pandemic is behind us, and we can't say that at all. so we follow all of these trends very carefully, especially going into the fall and beyond. draw a want to distinction between a second wave that stems from people in a reopening economy getting back out there and a second wave resulting from policy that perhaps isn't securing against resurgence in the virus. it's what we are seeing right now in texas and arizona an inevitable outcome to the reopening of the economy?

dr. koh: we are very concerned lisa: what other policies see beingou

affected without shutting down the economy again? dr. koh: we have to track the trends very closely. we have to watch those cases, hospitalizations, deaths. we have to target our efforts to high-risk communities. communities of color have taken a real disproportionate burden of the depth of suffering to date. we have to make sure that the inting and contact tracing the preparations for ppe have to be coordinated at the highest levels. these are all things we have to be paying attention to as one country, not 50 states, going forward. jonathan: howard koh, fantastic to catch up with you this morning. thank you very much for your input. good morning to you all. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. this is "bloomberg surveillance ," live on bloomberg tv and radio. session lows in the equity market. points,futures down 70

down by 2.2%. tom: to be clear, for those whipping up across this nation, we have been giving away -- grinding away lower steadily through the morning. i would also watch the dollar curve, twos-tens spread, to see if that flattens further. jonathan: yields down, curve flatter. let's look through the price action, starting with bond market. nicely bid. yields lower not just on the day, but much lower on the week as well, down around 20 basis points. we chip five basis points off the 30 year yield. in foreign exchange, here is the story for you. the dollar makes a little bit of a comeback. 0.7%.coming down by from new york, up next, much more as the wave of infection starts to increase, and

confidence breaks down just a little bit after a huge cyclical rally over the last several weeks. from new york this morning, good morning. this is "bloomberg surveillance ."

>> just how accommodative will they be? >> they are not trying to make things nice for the government. thehe fed has access to -- -- every crisis we -- >> this is "bloomberg keene,lance" with tom jonathan ferro, and lisa abramowicz. ♪