outbreak. 20 u.s. states see a rise in cases. europe reopens its borders. france, germany, and others remove travel restrictions within the e.u. to spur tourism during the key summer months. britain's non-essential shops open today. and china's economy continues its slow recovery. industrial output rises, though the number falls short of estimates, and retail sales data is still shaky. well, good morning, everyone. this is "bloomberg surveillance." i'm francine lacqua, here in london. tom keene in new york. the main narrative will be the markets, what we have seen on the market, and this links it back to the discovery of a possible vaccine, that is months if not years away and the resurgence of infections not only in the u.s. and also china. tom: huge cross current this morning. i can say i have never seen such a distant market right now. it wasket is better than

two or three hours ago. the vix comes in from 44 to 41. there is a whole idea of an expanding pandemic all the -- throughout multiple geographies. there is optimism with research houses reaffirming some form of v-shaped recovery. it is the oddest monday i can remember. francine: it is a pretty odd monday, although i have to say i have had other odd mondays. that's get to first word news with ritika gupta. economyin china the keeps inching its way out of the coronavirus, less industrial output rose 4.4 percent in may from a year earlier. at missed estimates, and consumer demand is sluggish. retail sales declined more than expected. so did fixed asset investments. the white house top economic advisers rejecting a more cautious outlook for the economy. larry kudlow says the chancellor will be -- the chance will be

for a v-shaped recovery. he told cnn the unemployment rate will fall and 2021 will be another solid year. kudlow also said the $600 a week on his payments made some americans will end july 31. a cautionary message about the economy to congress this week. he will be on capitol hill tomorrow and wednesday. he is expected to echo the mostly downbeat assessment gained last week. the white house criticized jerome powell for being overly negative. british prime minister boris johnson is encouraging consumers to shop with confidence. stores reopen in england today, and johnson says coronavirus restrictions requiring people to stay roughly six feet apart could be relaxed. -- ofllor of the extra the exchequer says there could be a cut in sales tax. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries,

ritika gupta. this is bloomberg. francine? tom? the first thing i did this morning was look at dow futures, down almost 1000 points, and they are doing much at her now. spx is negative, 56-ish. in -500-ish, i will call it. nothing like what we saw over the last two hours. francine: i'm looking at european stocks. they are sinking to a three week low. same for u.s. futures. we are off the day's lows. there is evidence of a second virus wave, a continuation of the first wave, whatever you want to call it, and that is hurting hopes that we will see

quick economic recovery. it could change quickly, but i am looking at treasuries rallying, pushing the 10-year .68. to sentiment is also souring in havens such as yen, 107 .3 zero. joining us now is peter dixon. great to have you on the program. even the rally we have seen, where we do -- will be due a correction anyway? peter: i think many people have said, and i agree with them, running of the stocks in the past two or three months probably was getting ahead of itself. boost think a correction is necessary. some profit taking appears to be a rational response. the question is, what do we do from here? i maintain my view that there really is not any other option other than to invest in equities

for the simple reason that the only asset class is generating -- given interest rates on the floor, across large part of the industrialized world. francine: what does that mean, that your investment basis is don't fight the fed he echo -- don't fight the fed? helen: yes -- yes, and the economy looks pretty grim for the foreseeable future, but that does not mean to say necessarily that equities necessarily will have to remain on the floor. the risk offer a rally, primarily i think it is looking a lube it further ahead as you expect to see -- looking a little bit further ahead as you expect earnings to be week across -- to be weak across the next quarters. tom: peter dixon, tom keene in

new york. i was thunderstruck this weekend after shops were reaffirming some form of a v-shaped recovery. if you have optimism on equities, what kind of equities do you buy right now, given a reaffirmation of the better than good recovery he ech? peter: i think the likes of retailers, even the airlines, warren buffett, those kinds took the biggest hit during the downturn. about whend story everyone else is fearful, i would not be quite so positive myself about this v-shaped recovery. i think it is going to be a slower hold, and accordingly, i am going to stick with the likes of more defensive opportunities. some of the tech stocks did particular well during the downturn, primarily because they

will remain in demand as the economy gets back on its feet or reaffirms slowly. tom: what do european dividends do? it is a stereotype they have a lesser dividend growth, a growth rate of the dividend, but they also pay a high yield. what does that dynamic to forward? dividends for the foreseeable future are going to be depressed. i think it is a consequence -- the earnings yields on european equities are going to remain fairly modest. and i think that equities will probably underperform vis-a-vis the united states. but also don't forget, here in europe, long-term interest rates are lower than they are in the u.s. accordingly, that is a logic for continuing to over way europe

and equities. thecine: it seems that economic recovery in europe could be harder, certainly in countries other than the u.s., and a lot of it appears -- a lot of it depends on the european commission plan which still has to be voted on. peter: no doubt, the european economy is going to be a tough one. countries like germany -- i think there are signs that we are starting to normalize a little bit, shall we say. i am hopeful that the second half of the year, germany would do ok. but italy, which took a real pasting with the consequences of covid-19 and also has a measure of weaknesses, certainly will struggle to get back on his feet quickly. you are dead right, the commission's economic plan will be crucial. fortunately it will take quite some time before that comes to fruition because there is a lot of opposition.

even though i think ultimately this opposition will be on the cuff, nonetheless there will be horsetrading between now and the end of the year before that is brought to fruition. the economies most badly hit in europe will probably not get the support they would like. francine: thank you so much, peter dixon stays with us. up next, we talk with jim awake -- with gilles moec. this is bloomberg. ♪

tom: good morning, everyone. "bloomberg surveillance." very interesting monday, research reports out on recovery. interesting news flow, including a reopening with london and the united kingdom. we will have more on that across all of "surveillance" and also markets that are not doing that well. a decline in futures. they come back a little bit with the vix. the 40 level on the vix is just what it is. peter dixon with us right now. one of your great charms is the idea of economics linked to equities, and all of that is wrapped around the pernicious feeling of negative interest rates across europe. that makes dividends look very attractive as well. do you suggest that the negative interest rate regime will continue, and with that, it just puts a bid under equities out forever?

need tos long as we look ahead, you're right. when it comes to the euro zone, there is no sign that it should go withng or able to the interest rate strategy. the lack of earnings opportunities elsewhere, it does support equities. the question i get for other central banks is do they want to go down this same path? i would argue they don't because --re are lots of negatives negative strategies associated with negative rates. as a consequence, you might find that you open up a pandora's box, which causes more harm than is perhaps for seen at this point. the ecb is committed -- other central banks, i would definitely not go there.

commerzbank the measurement of the urge to merge ? it is clearly evident in the united states. is there in a mentality of roll up right now among european large capitalized corporations? peter: we are seeing that here because first of all the economic environment was slightly different even going into the locked down so, needs were really thinking about crosscutting rather than merging. i think that process has been accelerated as a consequence of the experience in the last few months. companies i think are in survival mode. some of the long-term future plans will be put on ice as they figure out how to get through the remainder of this year and perhaps through the first half of 2021. i do not see a wave coming our way of mergers, coming our anytime soon. francine: do you see companies

having to go bust either through the administration and because of the economy, or has there been enough support in the u.k. and europe to make sure that this is avoided for healthy companies? has --i think that there we will avoid a wave of bankruptcies. that have large cash reserves should just about do ok. there earnings will not look great, but i think they probably survive in a recently wrote -- in a reasonably robust state. companies with high debt levels, have no cash, which have excessive cost will struggle. bear in mind that also the wave of globalization, which has supported many companies over the past two decades -- that is another problem for many of the smaller companies. you soe: peter, thank much for your time.

peter dixon, commerzbank level equities. and we will have more exclusive reporting next. this is bloomberg. ♪

francine: this is "bloomberg surveillance." carlos ghosn has always said he has always been set up, and

there may be evidence that support his claim. bloomberg has learned there may have been a campaign -- that hime is a campaign against that started last year. thank you so much for joining us. there is a great piece, and i know many months of investigation went through into this. give us a sense of what this actually means. does it show that there was a methodical campaign to remove the powerful executive from office, or does it actually also say through our reporting that he was not guilty as charged? there are two separate issues. one is, where the motivations of killing off a possible merger an intensive merger romo forissan and moving against carlos ghosn, or

where there also allegations of financial impropriety that the tokyo prosecutors came forward with. these emails, documents, and interviews with people who were very close to what happened suggests that there was a campaign to dethrone carlos ghosn that went well before the actual charges were leveled against him in late 2018. so they show some forethought about if they were able to could alter, they the relationship between nissan and renault in a favorable way to nissan. that has always been conjecture, now we seem to have some documentary evidence that shows that it partially backs up carlos ghosn's claimed that he was set up. francine: carlos ghosn also says he was innocent before charges of financial this -- financial charges and breach of trust.

do we know anything about that? >> the financial charges are out there. ghosn escaped japan last year. he is in lebanon and the japanese are trying to extradite him. unless carlos ghosn comes back trial,n and there is a it is very difficult to know what the legal conclusion will be to that side of it. so this article is really more internallyolitics that were going on well before those charges came in, and inform kind of our understanding of how this all came into play in 2018. the things that permeates our reporting is the idea that the people of nissan that left this trail of emails and innuendos, etc., i've all left or have all changed jobs.

present management of nissan want? brian: they are trying to simultaneously fix a very broken alliance with renault. obviously this whole ghosn melodrama did a lot of damage to the alliance. at the same time, like every other carmaker, they are trying to do with the pandemic and the shock, the demand shock that has hit the auto industry. tom: continue, continue. ryan: i think -- brian: i think they would like to put this behind them. but there are a couple of problems. trial ofe is still a another man who was arrested with carlos ghosn in 2018. and a lot of this will be coming out in a courtroom, and then you still have the ongoing extradition efforts by the japanese government to get

carlos ghosn back to japan. tom: what is the relationship of nissan to the japanese government, the federal government, and this of the of tokyo? i am absolutely fascinated by the behavior and the culture between the government entities and the corporate entity. are they, frankly, one and the same? --n: if you go brian: if you go back to the 1950's and the 1960's when you have the industrial combination, it worked very closely with the government in the postwar decades. obviously nissan is a national champion in the auto industry, and went through a very difficult period in the 1990's and came very close to bankruptcy. we have not uncovered any evidence that the government was actively involved working with nissan executives to remove ghosn and re-alter this relationship with renault.

we do not have any evidence that that took place. what i think it is safe to say that there are probably some people in the government that want nissan to be a healthy, strong company, and, you know, support efforts to move it forward. what will be the longer-term implications of bloomberg's reporting? have we had any insight into this being something that has happened before? there are ank couple of things. first of all, if you are a nissan shareholder, i think this raises some concerns and questions. nissan stock has gone down 50% since carlos ghosn was arrested. so i think there is going to be some consternation among shareholders about what was really going on here. why all the machiavelli and

maneuvering and such? i think there are some very hard questions that will probably be directed at management. during the great kelly trial, which is going to be taking place later this year, it will be interesting to see if this comes up, whether in a courtroom setting -- i think that will be another opportunity. tom: we have got to leave it there. brian brammer, thank you so much that brian bremner, take you so much. they are, david rubenstein on a conversation about vaccine. this is bloomberg. ♪ you say that customers make their own rules.

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now that's simple easy awesome. switch and save up to $400 a year on your wireless bill. plus get $200 off a new samsung galaxy s20 ultra. francine: tom, we are looking at life actors of oxford street, one of the biggest -- we are looking at huge cues this

are starting shops to reopen across england for the first time since the lockdown yesterday. we had a pretty impassioned prime minister, boris johnson, encouraging consumers to -- we had a number of chief executives also come on surveillance early on. if you are shopping in retail, and lot of the stores are open but the changing rooms are not. the social distancing still remains in place, although if you look at some of the cues, maybe they are not adhering to the realistically. the reopening of retail with life pictures out of london. let's get to first word news in new york city with ritika gupta. found: and moscow court four -- former u.s. marine core wetlands guilty of that core wayland of spying. he says he is innocent and was set up by a russian security

officer who owed him money. chairman jerome powell will deliver a cautionary message about the economy to congress this week. he will be on capitol hill tomorrow and wednesday come expected to echo mostly downbeat assessment he gave last week after policymakers held interest rates near zero. he what has criticize him for being overly negative. questions arose about president trump's health over the weekend, -- theto twitter that the tweeted handrail was very slippery. he turned 74 yesterday. he was the oldest u.s. president to be sworn in for a first term. in atlanta, prosecutors will decide whether to bring charges against the police officer who shot and killed a black man. his killing outside a wendy's lead to a new wave of protests against police brutality. the official autopsy said he

died from two gunshot wounds to his back. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries, i'm ritika gupta. this is bloomberg. thecine: let's go to reopening of the economy and what kind of recovery we will see. thank you so much, as always, for joining us. when you look at the probability of the v shape but also the number of infections rising in certain u.s. states and china, are you still holding onto the hope that a recovery could come pretty quickly? >> it is still my baseline. there is all this reluctance in most governments to resume the conditions that we have in march and april. -- oruess there is some i would add that in

europe at least there is still no sign that things re: thaterating, and that -- things are accelerating. much --opean countries made much further in curbing the virus. so there is more volatility than probably expected a few weeks ago. but key is whether we have a high probability of return, and i don't see this as a potential baseline. as you look forward -- tom: as you look forward into july and the end of this odd year, do you assume that

central-bank action, particularly in europe, leads to asset price inflation, and that the money and the effort goes into stocks, bonds, currencies, commodities, that it is asset prices that move and nothing else? on this -- this i am quite cautious. it is wrong to say that central banks are essentially turning into a very nice boost to asset prices without any actual impact on the ground. it is massive and efficient. with what the central banks are doing, we could not have the sort of fiscal stimulus that more governments are accepting to provide. so it really works. it is not just doom for financial markets. fort is not just a boon financial markets. the market has revised very

quickly. the mechanical rebound. after the mechanical rebound, which may result in spectacular data in the next weeks and months with massive improvement in the usual data flows because people would go back to work and it is going to have an impact on the data -- as we get to the end going to the long-term consequences of what they willappened, remain very open. deflationary risk will be there. be euphoric in this situation. tom: you nailed it with the phrase euphoric. there is the prediction that we will see that kind of euphoria. give us the glide path to euphoria if we get it. is it sudden? is it an upside volatility?

we are used to talking about doom and gloom here. but are we going to go completely the other way? come since the beginning of this, i have always said that the main point of affection would always come from the medical aspects of all of this. so if we end up by the end of the year with a vaccine, for instance, or an efficient treatment, that would change expectations quite radically because obviously this would harshff the table that lockdowns would have to resume. this would take out from the markets a big chunk of risk. we have notens, and seen any evidence, it is ready, to use an expression, the british government loves, we wave see in sort of second of opportunity.

but i remain a bit focus on the fundamentals, and not on the permanent losses we are incurring. frozen the labor market so far. we have just made it so that it is not moving too much. as we get to the end of the year, most of those schemes will some then we could see negative second runs. it is the balance site and the -- tom: nicely stated. there are some really can -- some real conundrums that will be fascinating. it is going to keep us employed. gilles moec, a chief economist. we have much more coming up. lots to talk about. in the next hour, we will speak to the most interesting a 12thsman, of congressional district of pennsylvania. not only a battleground state but indeed a battleground

congressional district. fred keller will join us. stay with us on this monday morning. this is bloomberg. good morning. ♪

francine: this is "bloomberg surveillance." we are back with gilles moec. when you look at job losses around the world, how quickly will we go back to a similar jobs figure two what we had in 2019? is it going to take decades? gilles: i don't know. --is certainly not within my

the issue which is going to be increasingly problematic is some sectors, we may be structurally changed. not considere may cyclical unemployment, which will come back gradually. sectors where demand for labor has changed for good, this may trigger a rise in structural employment. i'm not super positive on this aspect. question, if i could. i don't mean to be snide because this is a huge issue. literally a social responsibility. what is the actuarial assumption right now? it just comes down and down and tension statistic of what the return is going to be in the future.

under 4%, actuarial assumption? gilles: what is calculated over a very long moving range, it doesn't move very quickly, which is probably a good thing for stability. -- my view has always been the same, we are in a world with a low long-term interest rate. it will probably stay this way for a long time. accurate. more so we need to change strategies accordingly and maybe become a bit less dependent on financial markets. by definition, there is a difference between market starts and what the interest rate is as calculated. tom: thank you so much. actualmoec with

economics today. they are shopping in england. it is not something we see in new york. what is the energy? do you just want to get out there and get to it? francine: i know a lot of people do. theou look at twitter and u.k., shopping outside is definitely trending. i think the crowd is a bit younger than what we had in the past. if you look at oxford street, there are cues around a number of stores. just about to have a mile back from that -- we will speak to the chief executive, you want venter's -- he want venter's first bought -- you. this is bloomberg. ♪

francine: "bloomberg tom and francine from london and new york. oxford streetom is port number and mason. this is a major company, of course. tom and i know it very well.

this is a major milestone today, june 15. non-essential stores open up for the first time in almost three months. will customers have a conference return? we are delighted this morning to be joined by ewan venters. ray to have you on the program. i know a lot of our viewers will recognize the brand and the shops. you have some experience of reopening because you have been open, or certain parts of the stores have been reopened for a bit longer. how has it gone? has trade picked up significantly as you started reopening? piccadillyopened our the 21st. 20%.e trading at about i hope other stores in the area

will see momentum to the business. the safety of our customers and our team is paramount, so it has been great to get three weeks of experience behind us on that really important date of british retail. .e will be very well prepared the most what has been important measure that you have used to protect employees and staff? way, creatingwn preventing a line of conference to customers, to make sure that in the building there are safely marshaled rounds. at moments like this, yes, you

need consignments, but you also need consumer attractions. it is ironic. but you need to be give people confidence. with confidence breeds consumption, which breeds commerce. customers -- ice our think communication is so important. tom: thank you so much for joining us today. disc looking keene at a reservation, and we are thinking about a reservation in the afternoon tea room. mayonnaiseare breed come and on and on and on. it is served by the best service in london. how is your staff doing? how have they survived this pandemic? well, first and foremost we had a fantastic response from so many of our team wanting to

get back. we continue to pay all of our staff. we never furloughed them. we pay them 100% during the pandemic period. we are communicating with them weekly, providing mental health training, online training courses. so the motivation of our team is been of paramount importance. people act as the so they have kind of left the business. the attitudes of our team in coming back to work is really exciting. of course, restaurants do not reopened just yet. we start to see -- we have a fabulous restaurant and that also reopens.

you know, we are going to rebuild. we are going to be positive and we are going to rebuild. things will be all right. a question -- this -- then from two boys salted caramel shake in the parlor. how do i eat that with a mask on? what are you going to be doing about the mask on across your whole platform? how do i have the salted caramel shake, butterscotch and chocolate, guaranteed to shake up the taste buds -- how do i do that with a mask on? get that on earth you shake delivered online -- we have been doing a great online business got across the world, including in america. in our borders in america. caramel truffles, salted caramel biscuits all over the world. i am looking forward to your

listeners coming there to rethink. francine: i was going to ask you about online sales. have they been increasing significantly? if social distancing rules remain in place for even a year, two meters butot one meter, are you going to push for this in e-commerce? sales have been around 18% to 20% of group sales, and our online business has increased sixfold. dominated by the domestic consumer, fresh products, fresh meat, poultry, cheese, ham. our famous people's consent jam. famouss progress -- our tea biscuits and jam. there is progress that is great to see.

i predict in the year ahead that are number one channel in our group will become online, so we will have more business online than we do. tom: this is important. i know you have one more question, francine, but i would just observe that the -- probably is being ordered by buckingham palace. we are just not hearing about it. windsor castle has had a few of our treats during lockdown. she is well looked after. do you expect happening at christmas? this is a huge season for u.k. for fort known mason -- for fortner men mason. it would have a devastating impact on our business in the final quarter of

the calendar, the all-important november and december. i think that is true for retail in general. if social distancing at two meters is in place, i could see our sales would be 50% of what they would be last christmas, based upon those rules. that would be the case for us and for others. ewan venters, thank you so much. for u.k.stic day retail. now the business flash with ritika gupta. did -- bp isis predicting that the long-term onact will have a impact price demand. moderateddecline has the weekend at h&m.

down 30% after 13 days in june after plunging 50% in the three months through may. h&m has reopened the bulk of its stores. 80% of them were close in april. less than a fifth are still shut down. carlos to ghosn -- carlos ghosn always said he was set up. bloomberg has learned that there was a campaign by top nissan executives tooth dethrone ghosn, and begin almost a year before his arrest in japan for financial misconduct, motivated in part by his push for greater integration between nissan and its french partner, renault. that is the bloomberg business flash. francine: thank you so much. the markets are focused on the number of infections rising not only in some u.s. states but in beijing. there is not the rally that we saw last week. european stocks actually slide into a three week low, treasuries and the dollar rising, tom.

tom: no question about that, but let's be clear, the data here in the last two hours has really improved. -900 on dow futures come almost -1000. and we have come back reaching two -500 to -400. the vix right now, 41 handle in from a 44 handle earlier. forill get you ready monday. brian levitt will join us from invesco. looking forward to that conversation, and all the news as well. please stay with us. from london, from new york, this is bloomberg. ♪ save hundreds on your wireless bill

without even leaving your house. just keep your phone and switch to xfinity mobile. you can get it by ordering a free sim card online. once you activate, you'll only have to pay for the data you need- starting at just $15 a month. there are no term contracts, no activation fees, and no credit check on the first two lines. get a $50 prepaid card when you switch.

it's the most reliable wireless network. and it could save you hundreds. xfinity mobile. tom: this morning markets

plunge. they reprice for continued they reprice for continued pandemic from brazil to beijing to boca raton. earlier down 3000 points since tuesday, rebounding in the last two hours. bills, notes, and bonds. yields grind -- lower, curis flatten. some sense of the v-shaped recovery to your end. and once more, or is concern about their president's health. morning, everyone. this is "bloomberg surveillance ." i'm tom keene in new york, francine lacqua and london. interesting reading into this monday with a lot of wall street firms saying a v-shaped recovery is in order. we get retail sales in the u.s. tomorrow, a key indicator for us , and you're reo