the markets, the goals nudge ever higher. for now, modest business stocks indicate next to nothing. new york city reopens. empty offices near empty streets and restaurants and bars, it's really quiet. nightmare, the third week of august has the au pair not expecting to get the visa and tim apple needs to program the widget and ios 14 can't get through customs because president trump says no. good morning, it's bloomberg surveillance. london with an important interview coming up later today. francine, the juxtaposition of the united kingdom trying to inn and the tentativeness

america, i find extraordinary. how closed down is london? ,rancine: much like new york depends on whether it's the metropolis, parts of the city, if you look at the city of london, which bloomberg is located in, it's quiet. if you go to the center, it's quiet, there's hardly any tourists because of the quarantine into the u.k.. but if you look at residential places, that's when people come out. waitinghen people are for boris johnson to announce an opening of pubs. it really depends on the communities and whether they feel comfortable. many people might be elsewhere. and this harkens to your interview with that officer from ubs, and you wonder what the service sector is going to do on working from home or the office, what do you think?

greatne: we had the conversation yesterday, she could see up to a third of the workforce never coming back to the office area if you think about it, it has huge and look asians for real estate, certainly commercial real estate for offices -- it has huge implications for real estate, certainly commercial real estate for offices. tom: you can look for that interview later. i know that david rubenstein has some important interviews as well. now withitika gupta our first word news. ritika: vice president mike pence is warning that more young people are testing positive for the coronavirus, and has made the remarks in a conference call with governors. governor greg abbott may halt the reserves and says that the infections are rising at an unacceptable rate. prime minister boris johnson

will announce the latest age in lifting the coronavirus lockdown. movie theaters and museums are expected to open. he might also cut the minimum social distancing and half to one meter. the u.s. seeks an indefinite arms embargo on iran. the u.s. has shared concerns with other security council members. the current ban expires in october, it was part of the upl agreement that the u.s. has abandoned. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. , this isa gupta bloomberg. tom: thank you so much. the market is down off of the navarro comments, we have a nice lift to the equity markets. i guess they chatted up again on cupertino.

gold has also elevated. i looked very carefully today at versus they dynamics daily closed dynamics on the gold. we are really buttressed near breakouthighs -- highs. francine: looking at european stocks, they are breaking out after manufacturing data came out. the treasuries are pretty steady and the dollar is declining. tom: very good. kevin cirilli is joining us now. article in the washington post that was just to 2016t, going back and really outlining how secretary clinton lost the election. is there a knowledge of that in the biden campaign? are they trying to not do what

secretary clinton did? feel they have advantages that the former secretary of state did not have. but joe biden has largely been hidden from the public view within the last couple of weeks. when i put that question to strategists, they say that the biden campaign is trying to make this a referendum election, not a choice election. sot's why we are seeing little of former vice president joe biden. from the republican standpoint, i spoke with two sources, and what they have said is they are not paying attention to national polls. they are paying attention to the president's approval rating on how he's handling the economy, which outpaces his overall approval rating by double digits. a fox news paul came out yesterday has the economic approval rating anywhere from three to four percentage points up over the last month.

that's economic news that the president is banking on come november. have relived the tactical warfare of a never-ending election. what is the task of president trump's campaign and the president to regroup from this week to the weekend. kevin: he's heading to arizona and wisconsin where he will have smaller sized political events, not necessarily rallies. and from there it's regrouping. one of the things that when noticeable -- that was noticeable, was that there were local reports of widespread potential for unrest. shops were boarded up with windows, something that washington, d.c. and new york city has dealt with all summer long. viewership, in terms of viewership has remained strong. the battle really was a

foreshadowing of how the president is going to debate joe biden on a debate stage. that they debate in the democratic primary, he struggled. i think the president is looking forward to the debate which is why the campaign is saying they would like to have more in the wall. how tough or they be on china to win on -- to win the election? does it swing votes? kevin: it absolutely does. this frustration with china has predated the trump and biden campaigns. trumbull said the trade agreements are of yesteryear and the president has to negotiate them. from that standpoint, you look at what's happening in iowa, battle ground zero for the trade war and theresa greenfield is a political unknown that progressives have rallied behind .

she's now leading joni ernst from the cockeyed states that the president carried by 6% to 9%. that democrats have iowa on their hopes for the senate race is remarkable. and she's running as a small-town farmer, theresa greenfield is a farmer, and is definitely front and center in that race. tom: kevin cirilli, thank you. kevin on an to hourly basis as we go towards november 3 this year. no, i'm kidding. coming up, jamie bullard will we have david rubenstein in conversation with the secretary of the treasury. commentsr. navarro's will come up with secretary mnuchin. this is bloomberg. ♪ ♪

good morning everyone, we have francine look -- francine lacqua in london, i'm tom keene. we can see a recovering market on doubts of turmoil over the last couple of days. us,ave ronald temple with it's always a piercing discussion about not so much where to put money, but the enthusiasm to be in the stock markets and other asset classes. script. up the

a note was published a moment ago with a terse statement that there will be fiscal stimulus, the president making clear in an interview yesterday that he wants checks in the mail. do we have a confidence in at equityestment -- in investment because it's an election year and everyone will get free beer? ron: that has contributed to it. if we look at the data coming out on the economy and for april inhad $200 billion of money terms of consumer checks, we saw spending go down 13% in the savings rate at 33%. in may people spend some of that money so you had some of the best retail sales in history in may. and it does not hurt that the fed has grown its balance sheet by $3 trillion. it's not a surprise that this is in the markets.

but i do worry that people are getting too enthusiastic and extrapolating into the future more positively than they probably showed. caution, youour have to place capital, because everybody is up to their eyeballs with cash. which sectors are most attractive? look at the market, the s&p is 8% behind the overall high. there's more dispersion than people might expect. 23%ave 183 stocks down over and there's good opportunity still out there. i would recommend that people focus on the quality parts of the market. there are some high quality companies. i mean companies that generate high returns on capital with strong balance sheets that are going to be advantaged by what we are going through because they can keep investing in the research and development and increase their lead over

competitors. there are some good situations but it's all about the security selection. you can find them across the range. i worry about people purchasing the market as opposed to finding the right stock. fromine: good morning london, this would be quality companies on longer-term, you are looking at the full economic site, not just in a couple of months. ron: it's a great point. i think there's always a time in an economic cycle where you do want to go down the all the spec from, particularly if you think about 2003 and 2009. there was a point where you said ,k, there is a time to go down where stocks could be doubles or triples. i just don't think we are there in the cycle. we still have a pandemic in a number of cases going up. we have a million new infections confirmed in the last week.

this is not in the rearview mirror, and people are acting as if it is. and we need to think about the .ustainability, trying to time -- trying to time a dump is really dangerous. francine: what's being priced into the markets? discounting this? ron: i think the market is discounting this. i just pulled this up, we had this year at minus nine point 5% thisrnings, but up 22%, implies 2021 earnings will be higher. any type not price in of resumption of lockdowns. and to be clear, i don't think

we will have a national lockdown. i do worry about localized lockdowns, i don't think that's being priced in. is your belief now on the use of cash by corporation? has it changed? or is it business as usual? what is it? ron: that's one of the big questions, companies should have learned a lesson, this really backfired in a number of cases, there are companies that had to go hat in hand to the government theyng for a bailout and have very high interest rates. the -- arguably they will exit the crisis with more concern. but that's a subset of the market.

aere are others that have tremendous amount of cash on the balance sheet which will give them an advantage. i think we will come out of this being more responsible about .everage and you did not ask but at the household sector level there will have to be a change in behavior. a lot have had for the second time in 15 years that they have seen their nest eggs hit and half of the baby boomers are within a decade of retirement. there are number of structural factors coming out of this crisis that will change how we behave. ron, inc. you very much. coming up a little -- ron, thank you very much. coming up later, an exclusive conversation with larry fink. that's at 3:30 in london and 10:30 in new york. this is bloomberg. ♪

this is bloomberg: surveillance. tom and francine from london and new york. we are having a good conversation about the markets, we had ron temple and where he sees value. what do you deal -- do with the worry that inflation will be out of control and we will have runaway inflation? discount the probability of high inflation rates. i think we have seen a bit of that movie in 2009, when we started quantitative easing for

the first time in developed economies area there were a number of people worried about high inflation rates. the skeptics that inflation will be higher than it would have been otherwise, but i think what's often misunderstood is that absent quantitative easing in these extraordinary interventions by the central banks, we would be in deflation. the way i think of it, and i cannot prove the counterfactual or what would have happened otherwise, but perhaps it would have been -3% and we are getting positive one deposit of two. so the fed and the ecb are creating inflation but not enough relative to where we should be. i don't think the risk of high inflation is elevated, and i do think we have seen in historical terms that central banks can tackle it much more easily than deflation. francine: when you expect the animal spirits of the u.s. economy to come back, when will

there be spending again on? -- on capex? ron: the health crisis that caused the economic crisis has not been resolved. there have been improvements, we ramped up testing, across a number of u.s. states the testing is still nowhere near where it needs to be. from a therapeutic perspective, remdesivir is somewhat effective in mitigating the severity of the virus. but it's taken the death rate the patient7% for to have taken it and the median stay from 15 days to 11 days. that's not a cure. and gilead said that they will produce an and haley are -- an inhaler version which should be effective. we don't have a therapy that cures it or a vaccine. until we can get those building blocks together, it's really

hard to see how a ceo could get the confidence to increase their capex and have meaningful investments. and i think consumers -- there is some pent-up demand, people are eager to spend money once businesses reopen but i think consumers know that this is not over. the willingness to make big-ticket purchases may be a little lethargic. give us your thoughts on gold. ron: i have an intellectual problem with gold, it does not produce any income. if you take physical gold, you have to pay to store it somewhere or maybe you have armed guards at your home already. it's an asset i cannot figure out how to price. to me it's more of a fear index

or a tail risk optionality asset . honestly, i cannot give you a value because it does not produce a cash flow that i can discount. i much more inclined to purchase an income producing asset like real estate if i want an inflation hedge, or timber. assets you can put a price on. vimplecom -- ron temple, channeling john templeton. thank you very much, we appreciate this conversation on what you do with the market up nicely and advancing through the morning. and we had that grudging move yesterday, i have the terminal on my iphone, which is extraordinary. before the pandemic i used it a little bit, no big deal. but i find i use it more and more now. it's really quite extraordinary. dow futures are up.

up on the vix, that gets my attention. 1772 -- gold at 17.72. gold buttressed nicely up against recent highs. over $40s reaching out a barrel. american. please stay with us, from london and new york, this is bloomberg. ♪

♪ a warning from infectious

diseases anthony fauci, they will tell congress today about preparing for a flu season that will be complicated by the coronavirus pandemic. pandemict expect the to be mitigated by a vaccine anytime soon. the cdc has developed a test that could check for both viruses at the same time. president trump hopes he could regroup from a poorly attended oklahoma. he visits arizona today with an issue that was a winner for him in 2016, border security. president currently trails joe biden. it isn't helped by the rising number of coronavirus cases in the state. bloomberg has learned an announcement could come by the end of the week, the u.s. is trying to pressure canada to put a quota on its aluminum exports. concernedhthizer is about american aluminum producers.

economic activity in the euro area has started to pick up with the gradual lifting of lockdowns. doing little to change the picture of a long, slow recovery. ihs markets show an economic rebound underway. unemployment declined and companies cut prices to cut sales. 24 hours a day on air done on quick take. powered by more than 2700 journalists in 120 countries, this is bloomberg. much.hank you so greatly appreciated. it is always important to speak to people, we do that bloomberg invest. i would say have been most , the first scenario is

there a short-term money market funds. in the last financial crisis this is what we spent a lot of time talking about. that wasn't on solid footing to put money down until be stored up regulations. then they go into short-term bonds, high yield bonds. we have seen more inflow into high yield etf then we have the past 13 years together. it may not be bloomberg invest but it is bloomberg surveillance. this is the interview of the day for global wall street. eric hearst out of brown atthers has been a force hamilton lane advisors, he is the chairman now. he is one of the blood to spokespeople of private equity. his interview five years ago with mckenzie is absolutely classic. there is no other way to put it.

it should be a required read for mbarybody who was an candidate. he joins us with our chief financial correspondent. private equity is an absolute uproar. it is about lower yields, lower rate to return. what is the new internal rate of return for private equity? good morning, it is great to be here. our asset class has moved to being a relative asset class. 20 years ago people talked about two times their money and 20% rates of return. we've matured into being an equity alternative. people are trying to figure out where they think the public equity market is going. they want to make sure it is private equity that will 500 basis points over that. we have entered a world where managers are not stretching for risk it all and looking for strong downside protection.

i think you will see them underwriting lower returns. something like midteens. this is really important. you are basically competing away the information advantage of private equity from it years and years ago. if it becomes more institutionalized like private equity, 401(k)s, the rest of it, the dollars flowing out there, does your information edge disappear? eric: yes i class has been growing significantly. you've seen massive flows. you have not really seen return compression. on the midteens return, you told me where the public equity market is going. most are thinking we are talking about low to mid-single digits for the public equity market over the next 3-5 years. if i tell you private equity is

delivering 15% rates of return. in a world where pension funds could do anything to get a few extra basis points, getting hundreds will make the asset class look very attractive .francine: in some ways the industry was excited to see a dip in the market to we are not seeing that yet. why is private equity holding back so much? eric: that was one of the shortest dips we have in history. we had a two week period coming out of the end of margin beginning of april where private licking their chops. we will have a well-defined opportunity. andfed made a massive move that opportunity evaporated very quickly. now i think what you see is private equity sitting on the sidelines, largely being very patient and wrinkly waiting to see whether this dead stimulus is going to be added -- adequate

enough to carry us through the year. or will we see a real significant correction? that gives private equity a chance to move in. francine: a lot of investors pitching private equity as an alternative to public market. given the lack of volatility you see. the public markets are no longer a perfect calm for what you will see in the private market. thisnvestors overstating smooth return profile you see in private equity? are we going to see some destruction this year? the jobshink one of out there right now is an asset allocator for a big pool of capital. you're struggling to your actuarial return target, which is between 6% and 8%. you've taken one of your historical weapons off the table, public credit. that is not yielding you

anything adequate enough to help you bridge those return targets. then you worry about what you see in the public markets. significant volatility, real uncertainty. all of that has been causing an increased hill back into the private market. the trending going on for the last 10 years, i did you will see this market do my thing -- nothing but accelerate that. francine: it is exposed to massive amounts of leverage public companies has taken on. that number has creeped up in the private sector. you are looking at six times, seven times in some cases for these buyouts. do you expect that to creep up? thesehat really saddle private companies? as interestises rates are falling. those have been pretty universally related. debt has become extraordinarily cheap.

focused on is the cost of that leverage. in a world where that is cheaper, cheaper, you could have more of it and essentially pay the same interest charge. quantum of debt load has risen, the interest coverage ratio has been holding relatively steady. going forward, i don't say gus -- expect us to see a lot more leverage. what are they actually underwriting to? i think while debt is , youordinarily cheap will see a pullback on the usage. greatlynk you so much, appreciated. an update on private equity, which is certainly becoming more visible. coming up, we continue our discussion on the pandemic. doctor with johns hopkins university joins us. this is bloomberg. good morning. ♪

we continue to track the virus. has been at the forefront of international response every day. we are getting insight from public health experts. by a doctor joined from johns hopkins university. thank you for joining us. seemuch more of we going to infections rise? are these being contained in the u.s. or will we see a resurgence in cases? for having me.

it does seem like we are seeing a significant resurgence in u.s. across the southwest there's every reason to expect these patients will continue to rise. thank you for joining us today. you are truly one of the nation's experts in emergency medicine. you wrote a larder -- an article on what you learned during the first week of this virus. what now, from where you sit, what is next for this virus? this virus is spreading in states that opened up their economies early and aggressively. we've been seeing case rises since it out day as one would

expect with more interaction between people. i expect this will continue. we will see more states and newly all of the states have opened up to some extent. in some of these cases, particularly in the south, we will see very dramatic rises. you should know that in some of south,ounties in the they are seeing per capita levels in cases and deaths that are higher than at new york city. tom: i saw that yesterday, john burns murdoch had a great capital analysis. tothat's the case, we need go to something i think it is a mystery for some people. what is the update on what the virus does to those younger who

feel they are immune? thetoner: this is one of paradoxical things. most healthy people tolerate the virus quite well. they have a mild illness. but have severe illness most have mild illness. they could become a major carriers in transmitters of the virus. it is true that right now we are seeing many new cases being young people and and subsequent generations, they could spread to other people. it could be spreading amongst the entire population. we will see it more in middle-aged and elderly people as well. this is ominous. see a bigwe going to resurgence as we get into our winter? is falling critical moment? what could hospital do now to prepare for that? a. toner: i think it is

mistake to expect a fall wave. the subsequent wave is happening now. it could be a summer wave. these cases are arising now. basis ison a national nearly back to where we were in april in terms of total cases. we don't have to wait until the fall. hospitals who haven't gotten ready, really need to get ready. there is no time to spare. many of these hospitals, many of these counties that are now being affected have limited resources.

they don't have the resources of new york city. are in a vulnerable situation. you look at any good news out there, is there anything that gives you hope that either we find a vaccine sooner than expected or people that have contracted to coronavirus can't re-catch it? is toner: what we have seen the measures we used to decrease transmission, masks, distance, avoiding crowds, these things really work. they worked dramatically well so far. outbreak in new , if not so catastrophic yo everyone wears masks and avoids crowds, even with reopening the

economy, we should be able to maintain some control over this virus. particularly if we are doing widespread testing and widespread contact tracing. it is possible to keep control of this virus. i'm afraid of people don't wear masks and don't maintain distance we could end up back like we were 6-8 weeks ago. usncine: thanks so much for -- for joining us. for an update on covid-19 check the bloomberg terminal. theng up, we will hear from founder of pershing square capital management. this is bloomberg. ♪

let's get the bloomberg business flash in germany, the arrested, its been

was part of an investigation into the company's accounting practice. wirecard is struggling for survival. japan's and softbank is the companylitics, also plans to sell a 5% share of its japanese business. softbank has a strategy to unload $42 billion of assets. that is the bloomberg business flash. pershing square's bill ackman says recovery could begin by year end but re-openings be sloppy. he says the outcome of the upcoming u.s. election will impact his strategy. he spoke with david rubenstein. bill: i think we will begin a recovery by year-end. i don't think we will be near

anything close until probably the second half of 2021. , wee have an early vaccine talking about a potential vaccine by the fall, that will make an enormous difference. virus, it washe telemedicine for the doctor to and youa prescription could stay home for two weeks and be fine, those things will make it fairly significant positive impact. we had kind of a sloppy closure of the country. we are having a bit of a sloppy opening. you will not have business confidence return and consumer conflict return until people -- feel safe. that is more like the second half of next year. in the beginning of quarter for.

cases ine's a lot of texas and florida. it doesn't seem like it has disappeared. are you worried this could keep on going through 2021? bill: i think what will happen is the health care system is getting better and better at treating the virus. they are learning web to put people on a ventilator and when not to. they are learning to will have which drugs could have the positive effect. the medication. testing is improving. i think all of these things are and reducing risk. things will be a lot better in a few months. you will have states with a lot more cases because people have not been careful. i know states will have to moderate economic activity.

they will be more cautious, all things that will temper the economic recovery. will see a more gradual improvement from the global healthcare system. every researcher in the world basically solving one problem. lothe fall, we will feel a better. you could take death off the table. you could take severe illness off the table. that is possible this calendar year. better abouteel going out. if jay powell called you tomorrow and set i'm not sure what i should do, if steve mnuchin called you tomorrow, could i pass another bill working with congress? what would you tell both of them? would you say we need more help from the fed? or would you say we had enough help? to protectnk we have the most vulnerable people economically.

when do these programs precisely run out? you need to design programs -- we have made a lot of investments into the restaurant industry. we have some levels where they are better than $15 an hour minimum. it discourages people returning to work. we designed them in such a way that you don't reduce economic percentages. you have to have a large enough to protect people during the more challenging times. particularly for people at the lower end of the economic scale. what if i told you that no doubt about it, the next president will be donald trump, he will be elected. would you short the market, go along? would you do? bill: it would not change anything we are doing. our strategy is to buy dominant ampanies that could withstand pandemic or traumatic movement in interest rates.

it is not something we would make a bet on one way or the other. david: same thing with joe biden, if i told you he would be president you won't change your bills, right? bill: no. francine: that was bill ackman from pershing square. the focus is not only on the data that came out but the incess of what we are seeing the u.s. had a flurry of market activity and after a very -- coming up, more bloomberg surveillance. ♪

♪ >> what we need to realize is we

are going to be in a slow growth world for a very long period of time. >> trade is very much on the back foot, and there's a lot of negative consequent is that come from that. >> we've come to a point that we realize that the economy and have to coexist. we can choose one or the other. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ." we are live on bloomberg tv and bloomberg radio. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. this is bloomberg. confusion over the relationship between china and the united states, and it got a whole lot more confusing overnight. you listen to the interview on fox with navarro, and it is stunning, the