francine: another round of new virus cases search across the u.s. throwing re-openings into disarray. eu officials consider barring americans when borders reopen. steve mnuchin says an additional stimulus package could be passed in july. on small's impact businesses is still unknown. a dramatic lifting of lockdown measures in england. the chief medical officer warns the virus will persist into 2021. good morning, everyone.

this is "bloomberg surveillance." this is what the markets are focused on. the markets are looking at some of the data out of germany. business confidence coming in. 86.2. instead of the estimated 85. we are watching out for the case surges in the virus. something i don't look at very often, but we decided to put in aussie-dollar. it did reverse gains. it does seem that european stocks are slumping as investors figure out asset types. now let's get straight to the bloomberg first word news. here is dani burger. dani: the pandemic spread in the u.s. is leaving some state officials to consider slowing or even reversing plans to reopen.

infectious disease expert anthony fauci is concerned about the uptick. struggling to pump out its $2 trillion of virus aid. much of it remains stuck in tokyo's aging bureaucracy. still 40% of the funds have not reached people despite being approved in late april. for loans to small businesses, only 14% have been lent out. for job protection subsidies, it is even worse. a strong earthquake hit southern mexico yesterday. it killed at least six people, trapping others under debris. away, buildings shook, and tiles were shaken loose in mexico city. shut production at its refinery.

powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. with the risks of a second wave continuing to linger, when will the u.s. and global economy bounce back? here are some of our top guests at bloomberg invest. >> i think you will see a very bad second quarter. i think you will see a very spectacular rebound off the bottom in the third order. gdp to come real back to the 2019 level by the end of 2021. >> i do think the resiliency of our economy is such that we will power through this, but it is not going to be a classic v-shaped. it is going to be more of a u-shaped recovery rather than a v-shaped. of thingsseeing a lot

rebound and that is taken as a sign that we are on the path to recovery. we are in that way into the u.s. and even much more so in the developing world. >> we will not have every gust -- robust global economy unless all the world is recovered. francine: those were some of our top guests weighing in on when they expect to see an economic recovery. we will have plenty more on this coming up on bloomberg surveillance. we will also talk to the legal general chief executive. that is at 9:30 a.m. u.k. time. we have a full conversation about the markets and a full conversation on treasuries. this is bloomberg. ♪ is is bloomberg. ♪

francine: this is "bloomberg surveillance." let's kick it off with the markets. investors weighing their appetite for risk assets against a continuing acceleration for coronavirus cases across the american sun belt. here in the u.k., plans were revealed to loosen the lockdown while in germany some local restrictions returned as infections rose. joining us now is rachel lord from blackrock. she was previously head of the em ea ishares program. thanks for coming in. we look at overall volatility and appetite for investors. how has covid-19 changed the appetite? >> thank you, francine. it is a pleasure to be here.

so, it is really interesting. if you look at etf flows in the market, they are a quickest way of seeing how investors are responding. this has been a game of three sections. , then an lockdown immediate period where obviously all assets are falling out and we saw significant outflows across the industry as people were trying to understand what was going on. then really since the beginning of april, it has been about positioning in the markets in order to express your view on what you think the markets are doing as a result of covid. , a fewre a few things decisions that we can draw. in addition, we have seen flows

in active and etf's and everything that is tech related and health-related, which is understandable. we are all now living in this more digital world and the focus on health care, how we are going to get our heads around the virus, those two things have been huge. in fixed income, the clear winners have been credit. the strength and speed with which central banks around the world, where monetary policy has stepped in to support the markets has buoyed up credit in particular. those of the two big winners we the seen really i guess in last two months. francine: is there going to be much more appetite for virus themed etf's? i don't think it is virus themed per se. is theid earlier, it

health care and the tech side of things. there are a number of ways of saying that. i think there may be some gimmicky, virus type products, but the reality is if you look through and think about what are going to be the structural winners in this new environment? i think the products are already out there that let you construct a portfolio that is designed to pick up in those sectors. francine: if you look at how markets price risk and you look at different asset classes, how much do central-bank action skew that? back tonk you can go the financial crisis. the central bank had a huge impact on the winners and the losers. rates, we use the phrase

lower for longer, with interest rates at zero to negative, pretty much in every major market, anything that can create a return, a yield is going to be well bought. areiding the fundamentals there to underline that market. you can say that central-bank action happens. nothing in the market leads you to expect that interest rates will rise in any material way in any short-term timeframe, so the support will be very strong because of the central bank policy, the monetary policy environment. support is going to be very strong for anything that can create a stable return and resiliency in your fully go. francine: does resilience go with sustainability? is that by looking at places in the markets that are resilient that you are better prepared for

future crises? >> i absolutely think it does. sustainability is the definition. you are not sustainable if you are not resilient. are thetion is what factors that lead to better resiliency, better sustainability? if you look at the evidence of not even the last 3-6 months, the last 18 months, whether it ,as the general rally last year whether it was the height of the financial crisis more in this rebound we have seen over the last few months, in each of those market conditions, companies with a better sustainability and to have better sustainability factors were not just climate, it is the entirety of the esg.

we see this in looking at major indices. indicesf 57 sustainable have out formed their comparable benchmarks. i think that there is a coming-of-age that is going on and what we have seen over the last six months. i think that will continue. characteristics will be well bought in the market. i think companies will be rewarded for capitalism coming in if they are available. francine: if you look at these preferences toward sustainability and you are telling me what we are hearing about inflows, what does it tell us about what parts of the world are more keen on sustainability? do you break it down like that? are european investors better at sustainability or want more sustainability than other parts of the world? >> there are clear preferences between countries, between

client types. just look at etf flows as an easy proximate measure, which is very public data. your to date, sustainable assets have grown by around $20 billion. now, that $20 billion is actually split. there is a clear european market , we just crossed $1 trillion in the industry in europe. well north of $4 trillion. of thes you a sense desire for european investors versus u.s. investors with sustainable assets. but it is important. if you looked back at this, you

would have seen no interest coming out of the states years ago. that is changing. in europe, we have been ahead for quite a while. but even here, it is picking up a pace that we have not seen before. francine: how much more? if you look at which the pace has picked up, will it be sustained from now on? if you look at all the market turmoil and as you have told me, sustainability products were not dented by market turmoil, does it mean that the trend will only accelerate from here for the wanting of these sustainable products? >> yes, i think it will. there are sustainable aspects of this. if you think about the impact that coronavirus has had on our daily lives, it has forced us to thation how we live and means we question how we invest.

it has been really quite nice. environmental to emissions, carbon emissions. isi don't think that there anything around coronavirus itself that changes in individual's perception to better balance environmental and social risks in particular. if you look at some of the social forces that have been , the whole questioning of what is a key worker which has been hugely covered over the last few months. those things are going to lean into people wanting to invest in companies that have a better social contribution. i think the forces that are unleashed by coronavirus are accelerating the things already going on. francine: do you think that when

we talk about esg, in the past we were only thinking about climate change, but now we moreht an out and we are implicated in diversity and gender already. >> i think that's right. i think it is about what is your social contribution? we have talked a lot. larry has talked a lot about the need to have purpose. he has talked about stakeholder capitalism, not just shareholder capitalism. this trend is not new to europe. think if you go to somewhere like the nordic countries, this is a natural trend in the way in which they manage their countries and the way in which countries are managed. it has been forgotten about a with climate-related

and environmental related initiatives. on gender and racial equality, again, the impacts of coronavirus have been harder on nonwhite people in general and also on women. we know from the discussions we are having in our work environment or our virtual work environment that working from home has been a particular burden on women. gender orink that will be in the spotlight. francine: thank you for joining us. we will have plenty more from blackrock through the day. putin meantime, president is putting russia's military might on display to mark the 75th anniversary of the world war ii defeat of nazi germany ahead of a referendum that may

allow vladimir putin to rule until 2036. that referendum vote is on july 1. we will have plenty more on this parade throughout the day. this is bloomberg. ♪

francine: this is "bloomberg surveillance." on europe'se latest biggest economy right now. german businesses are growing more confident that government support and rebound on private spending will work.

a gauge of expectations rose for a second month. the president is of the e foe institute -- ifo institute. were you surprised by the volatility in the data and the pickup recently? >> in a way, the pickup was expected because the lockdown is easing. and may we saw in april was extreme pessimism come up tobably partly related companies did not know what was coming. now they do know what is coming. concentrated. it seems that these things can be managed. why the that that is

extreme pessimism has gone away. francine: how much boost will germany's fiscal stimulus packages provide? >> i think this is another reason why expectations have improved. stimulus cannot undo the fact undo the fact that there is a lot of stimulus will only arrive only in the second half of the , but certainlyar in terms of january mood, the stimulus has helped. francine: should we ask or should i ask you how much worse without anye been idea of the real impact of coronavirus? >> what we have seen is declining readings and expectations even before the virus.

it is clear that the virus had a massive impact in the data. i don't think we have seen a in april. fast the virus has had a massive impact and this is far from over. we see improved expectations. situation, many businesses tell us there is little improvement, in particular in manufacturing. it is coming from services again because services are opening up. we do see some signs of improvement. over the euaking presidency next week. how do you expect that to shape the crisis going forward? >> expectations are very high

regarding this presidency and i would expect presidency to generate agreement on the eu recovery fund, that is not an i think a veryut that germanyect is will somehow manage to get to an the medium term for inope, the more cooperation providing certain other goods independent of areas. francine: thank you so much for joining us. the president of the ifo institute there. ♪

you know probably hard lessons are going to be learned, but if nothing is ever allowed to go down, maybe dave portnoy

is far smarter than i am and i'm just working and trying to hard at making money on the market. francine: those of the thoughts of fame short seller carson block on the rise of the retail trader. let's get straight to the bloomberg first word news. here's dani burger. dani: the pandemic spread in the states leaving some officials to consider slowing or reversing plans to reopen. cases are rising in texas, florida, and california, which posted its biggest daily jump of infections and hospitalizations. is concernedauci about the uptick. >> we are now seeing a disturbing surge of infections that looks like it is a combination, but one of the things is an increase in community spread. that is something i'm really quite concerned about. you know that this is something that has been in the press over the past couple of days. dani: the european union may

decide to keep the door shut to americans. that is because officials convened to discuss easing controls on external borders. one criteria up for discussion is reciprocity, meaning u.s. citizens are not allowed in because europeans are still barred from the u.s. a new setback for u.s.-china trade. beijing wants international shippers of meat and soybeans to sign a document saying their cargo is not contaminated with coronavirus. it is a step too far for many .uppliers 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. burger. this is bloomberg. francine? francine: let's focus on the u.k.. boris johnson has announced a dramatic lifting of coronavirus

lockdowns. think that this is a reasonable balance of risk. nobody thinks -- some may it is too much with the benefit of hindsight and we have to go back on it. us now isjoining nigel wilson, the chief executive officer of legal & general. the coronavirus changed your working habits, the working habits of legal & general? nigel: it has been a profound change on everybody's working habits. because we can see how effective people have been working from home. that is going to make a big difference to lots of people's lives. we are very comfortable with

working from home now. getting people back to work. mean for what does it real estate across the spectrum? has it changed a lot or is it still too soon to know? nigel: it has been changing a lot all of the time. we have underinvested in many parts of the economy. inhave not invested enough research and development. there are large opportunities to invest. is going to be a lot of physical retailing, which is going to come under tremendous pressure. francine: doesn't mean we are

going to be much more digital? does it change your risk appetite? that that increase your risk appetite? had a we have always measured approach to things. i think people get obsessed with the word cautious. cautious,e mention be they think, i don't want to be reckless, i better be cautious. we have had a very measured approach to lots of things. our risk appetite reflects the environment that we are in right now. , weinvestments in the u.k. have to make sure that climate well-being,th and all of these huge growth

industries are well-financed. francine: are you worried they take a step back in terms of financing and there is also brexit looming? nigel: yes, i do worry about that. because the economy is in a steep decline, we got a reassurance that it is going to be a v, but in reality we think the risk of growth in the future is going to be less. there are going to be bumps along the road, in part because of the emergence of the health issues. [indiscernible] u.k.blem in parts of the even today.

[indiscernible] francine: what do you think its biggest legacy will? lockdowns? is there a danger we go back on lockdowns and that the recovery will be patchy? because we have to stop and start the recovery every month? nigel: we need a more measured reaction. we had an under-reaction to start with and then an overreaction based on how much of the economy we closed down. in hindsight, we should have responded much earlier. the u.k. is not strong in diagnostics and we weren't good at testing, etc., from the start. but there will be a next time. in my hope is that people will

react in a measured time. it is like leading to at the moment a better economic outcome then we have seen here in the u.k. and the united states. francine: nigel, what do you worry about most? is it job losses or lack of consumption? and how does that impact your industry? nigel: under producing come under consuming, and under investing. the part that we have control over is the investing part and there are huge opportunities in the u.k. i think the big issue for government is they haven't really thought too carefully how we are going to create new jobs. ,fter the financial crisis

everyone overestimated how much unemployment there would be. of service jobs and lots of innovation going on as a consequence of that. time, we are not sure where it is going to come from. people will probably not go back to work, therefore we must be thinking very deeply about which areas of the economy we need to stimulate. need to think city by city, region by region, how much money needs to be put into stimulate the economy? every town across the u.k. needs to have an economic response to what is going on, rather than just and i on the central government to come to the rescue.

they need more local business people stepping up to figure out what we can do to make a positive difference in our area? businesses like ours need to be ready to provide equity and debt to help these businesses grow. francine: nigel wilson, thank you so much. we will get back to nigel shortly and we will talk about that. the chief executive of legal & general. coming up, how long until the world economy gets back on track? we will your guests at a bloomberg global invest. this is bloomberg. ♪

francine: this is "bloomberg

surveillance." wilson,t back to nigel the ceo of legal & general. how long will it take for the u.k. economy specifically to also change and recuperate? how long do you think until we get back to normal? will we ever get back to normal? i think we are still joined by nigel wilson, i hope we are joined by nigel wilson. otherwise, we will get back to nigel wilson in a couple of minutes. are you still there? let's do a market check. focusingts are really on a couple of things. they are looking at u.s. futures and they are slumping. there has been a resurgence in tokyo, and the american south, and germany in cases. that led to concerns about the pace of the economic recovery.

the european union is considering a ban on american travel to the bloc. we will have plenty more on that. coming up come out of recession by year-end, that is the optimistic forecast by treasury secretary steve mnuchin for the u.k. economy -- u.s. economy. this is bloomberg. ♪

this is "bloomberg surveillance." i'm francine lacqua in london. we have established connection with nigel wilson, ceo at legal & general. let's get straight back to our conversation with nigel. we were talking about what kind of recovery we will see. i guess the purpose of big businesses and big companies such as legal and general in all of this. what kind of questions do your employees have you -- have for you? them stay at home or will it go back to the way it was five months ago? nigel: the teams are doing an excellent job.

it is a very measured response, week by week looking at different ways that we can look after funds in a more efficient way. ironically not so much about working in the workplace, but coming in on public transport. one wen issue around need to get more signs on. more people are coming by bike. people are walking to work. it is absolutely fantastic. there are a few thousand right now. we need a lot more people to come back for all the small and medium-sized companies, which make up the bulk of the people working in the city. it is going to be a long and not linear journey to achieve that.

francine: do you think it will ever go back to the way it was? a long-lasting impact. we have all learned that we have done a tremendous amount of technological change in a short period of time. we can do this from technology and working from home. what could we do with climate change if we applied ourselves with the same purpose of getting technology and investment to become more effective? change ourto business models incredibly successfully very quickly to make them much more efficient. francine: we often think about insurance companies.

do you worry about the bank of england going into negative territory. i've never been a fan of negative interest rates because they cause such distortions in the economy. it is not one of my favorite tools. prefer if we concentrated on how to get more investment into the economy and have a much more hands-on approach to that than actually having negative interest rates. it is going to be an interesting debate to have. i would prefer them to focus on driving jobs and that is going to be the problem going into

2021. francine: have the government beenes in the u.k. so far ok? have they been aggressive enough. nigel: a response that we didn't know about six or seven months ago. it has resulted in a lot of excess cost. theme over and over again. there are huge investment opportunities. projects from 100 million to one billion that really make a difference in people's lives. we have always been a fan of

those projects. prefer if we really focused on how we get these projects up and running to create more jobs and that is what we have been focusing on legal and general. that surprised us. the amount of success. much,ne: thank you so nigel wilson, the chief executive officer of legal & general joining us today. plenty more on the markets. plenty more on the lockdown. treasury secretary steven mnuchin is striking an optimistic tone on the road to recovery. he believes the u.s. could be out of its recession by the year-end. a stimulus package could come as early as next month. >> the president has been clear that we put a lot of money into the economy.

it has been a bipartisan response. there is no question that money is having a major impact on the ppp,my, whether it is the which impacted 50 million workers or whether it is the direct payments of over 160 million or enhanced unemployment, these are all having an important part of protecting american workers and the american business. i actually just left the republican senate lunch and we are beginning to discuss what a bill would look like. we want to take our time. we want to make sure that whatever we do going forward is what is more targeted to the businesses that are most impacted? >> do you think that is likely that by sometime in july and bill might pass both houses? >> i do. that would be the timing. >> so right now, would you say that the legislation that you have passed is working

reasonably well? would you say the fed has done as good a job as you would like him to do? can you say whether the president is happy today or happier today with the head of the federal reserve? i think the federal reserve has done a phenomenal job. we speak to them almost on a daily basis. is a work of the federal reserve and the treasury. every single one of these programs is now up and running. we now have a municipal bond program, we have a money market program, we have a commercial paper program. we have a corporate primary and secondary. we had a program that lent to banks and nonbanks for ppp loans. the fed acted in unprecedented response. i think you have seen the president is very pleased with

what the fed has been doing. >> in this quarter we have slipped into a recession. do you think by the end of this year we might be out of the recession? >> david, i do, but the traditional economic metrics aren't really appropriate given we shut down the economy. too manyere were way people that lost their jobs and got laid off and again, we are not going to be done until we get every single one of those people back to work. i'm not really focused on the technical issue of it is a recession or it is not a recession. i'm focused on helping all these small businesses and all the workers. that is what our job and i think you saw the recent employment numbers, people thought there would be another eight oh young people unemployed. we put 2.5 million people back to work. clearly, this is the ppp

working. you saw great retail sales. i think you will see the economy had a very bad second quarter, i think you will see a spectacular rebound off the bottom and the third quarter. >> you were one of the principal negotiators bob lighthizer of the deal with china. are you confident the chinese can honor their commitment? >> i have every expectation that they will. they have continued to tell us that they will. as recently as last week when secretary pompeo met with one of the senior people. that flew in from china. they had a summit. i have that expectation that they will lead up to their obligation. having said that, let me just comment -- i think the world wants a lot more transparency on covid.

we shouldn't confuse these two issues? yes, we have expectations that they will live up to their trade agreements, but we have expectations that we need a lot more transparency around the disease. francine: that is u.s. treasury secretary steve mnuchin speaking to david rubenstein. this is the markets. the markets are focusing on two things. they are looking at the number of infections and they are looking at the impact of the economic recovery. trying to figure out exactly the impact of a second lockdown. sentiment is turning a little bit more negative over the can learn -- the concern that it could slow the pace of business is reopening. this is bloomberg. ♪

♪ >> another round of new virus

cases across the u.s. throwing re-openings into disarray. barrings consider americans from entry when borders reopen. steven mnuchin speaks on a stimulus pack passed in july and the virus's impact on small businesses is still unknown. easing of lockdown measures in england and experts insist the virus will persist until 2021. tom keene in new york. the markets trying to figure out the number of cases increasing in coronavirus and the impact it has had on the economy through the lockdown and that is driving the markets today. tom: markets may be adjusting but i can't emphasize enough that reversal of mood in america.