that could begin this second half of 2020. 30% off the bottom in the march stock market, gold up 10% per year. that over the last decade. , looking good in the washington nationals mask. republicans this morning, they begged their president to get with the pandemic script. later on this morning on russia, paying cash to kill american marines. it is a failure to communicate. john bolton on trump and politicians committing intelligence. good morning, "bloomberg surveillance." the most interesting day for bloomberg television and radio. francine lacqua in london and i am tom keene in new york. up,ok at the guests lined paul krugman later and investor bolton, jeffrey currie on gold and at the tenneco market. -- 10:00 market.

i look at gold as the gold capital of the world. still in we are lockdown pays, although the economy is gradually reopening. i don't think we are effervescent at the moment about anything. but certainly, it did move the markets quite a lot when you saw it above that line. we had a good conversation with jay hambro about that. i know we will look at metals a little more in depth later on. tom: going to be interesting, to say the least. serious dues on the pandemic worldwide. i emphasized this is not just about america and united kingdom, but real worldwide pandemic. that news here and there some of optimism but it is a challenging story. diseasesectious anthony fauci once the u.s. is going in the wrong direction. he told the senate committee the

country could see 100,000 new coronavirus cases a day, from the current level of about 40,000. several dozen in western states are seeing increases in infections. that is prompting some to put reopening plans on hold. a new poll shows joe biden with a two percentage point lead over president trump. the survey by pew research center also found that almost 90% of americans are dissatisfied with the state of the country. the president's approval rating fell to 39%. and it u.k. come hopes of us with recovery for the economy may be sinking according to a survey from the british chambers of commerce. sector 31 year low. demand for manufactured goods also dropped in the second quarter. disgrace movie producer harvey weinstein has reached a settlement with more than a half-dozen women who say he assaulted or mistreated them. a federal judge has been asked to approve 19.9 million deal.

he is serving a 23 year sentence for sex crimes at a prison in upstate new york. 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. tom, francine? a strong closing on june 30. i will call it windowdressing and maybe some surprise earnings as well. this morning a churn, i will call it across all, bond yields a little higher. the vix from a 32 into a 30. that is a pretty good sign to begin this second half. gold, up, up, up. francine? francine: i was also looking at gold and also looking at some of the reopenings. we did have technical glitches in europe. mostly reopening. european stocks are edging up in a muted start to the third

quarter. i'm looking at use futures drifting. treasury slipping. a couple of things we wanted to keep an eye on, euro-dollar because it makes data in europe. tom:. good. you could hear the emotion the other day of our anna edwards and stephen engle in conversation with lord patton. this has been a surprise, moving from what we all witnessed 20 something years ago to now this abrupt change in hong kong. it is a change of beijing, indeed of taiwan, indeed of washington. but nowhere more than on the streets of hong kong. from central square in mandarin down to the east, sophie kamaruddin is on the street. what do the streets look like in this initial hours of protest under new law? sophie: over the course of the day, we saw more and more people gather seemingly without any real direction as police were

out in force to dispel crowds from assembling, raising a new purple flag, warning people moving against the new security law targeting secession or subversion -- subversive activities. the neighborhoods we have walked through, we have seen people milling about trying to find each other, really, to unite. [indiscernible] some minorbeen altercations between police and individuals. we have seen the deployment of water cannon, tear gas, water bullets -- rubber bullets been used by officers. than 180 have been arrested for a variety of offenses including a little simpler seven have been arrested linked to the national security law. the interpretation was

one of the things we did not really know how the law authority would interpret it. if you look at secession, collusion with foreign forces, given what has happened today, do we think they are interpreting it quite loosely? that this is a police force that is really cracking down? sophie: rule of law seems to be the priority for the hong kong police and keeping civility and order. [indiscernible] streets and sidewalks that would break up the movement of people toward the designated location, for example, a march that was headed for central government complex, they were stopped by blockade in the middle-of-the-road set up by police. direction sense of that the police have under this new law. what is fake is the

implementation and enforcement once the arrest have been made. it's a maximum sentence is life imprisonment for the offense as in the new bill. tom: sophie, you and our team have lived this in hong kong. i'm fascinated by the makeup of "hong kong police." my experience in beijing and shanghai is police come in different flavors. e flavors change in hong kong? sophie: from what i understand, the police force was more respected and tackling crime and gangsters. the controversial bill was introduced and set up demonstrations, the tradition of the police came under extreme criticism because of there being seen as a defense for the government and cracking down on protests the protests happening. we see them learn lessons over

-- pastor, how we have seen a platoon ready with their various devices on their belts, wearing their tools -- vests, helmets. there's a different heads up for civil society and the police come together. francine: sophie, thank you so much. coming up next, we talk markets with david bailin. this is "bloomberg." ♪

good morning, everyone. "bloomberg surveillance." we say good morning on this 7/ 1/20. -- well,ancie was say, should have that are excellent. later on, paul krugman. jeffrey currie of goldman sachs on gold come on commodities. john bolton will join us. really timely interview on this uproar over russian bounties in his book. great, nobody cares. what you care about is david bailin of citigroup. what everyone needs after the last six months is some kind of

reset to what is the plan forward for investment. advising clients of citigroup. reset?what is your it has been such an odd six months. how do you reset forward? >> great question. i think for investors, you have to stop paying attention to indices and start paying attention to what still has value in markets. obviously, talked about gold this morning. what is interesting about this market is have it has bifurcated into two groups. the defense stocks and the cyclical stocks. defensive stocks are the technology and things that have been incredibly resilient and are up for the year. huge number of stocks that are down for the year and these are industrials, small and medium-size companies, stuck in mexico and brazil, certain emerging markets in asia. these have done incredibly poorly. as we look to the future, we want people to reposition their

portfolios. they have less cash, more of oure defensive -- keep defensive chairs and then pile into the cyclicals that have not yet recovered and are going to recover based upon what happens over the next six to 12 months. tom: what i find fascinating, david, and this leads into the fixed income market, there seems to be a reset on what the actual assumption is which means the growth of revenues and growth of morens is ever, ever, ever important. is there a permanence to that actuary a lower assumption or is it a one-off? >> great question. it is not a one hour. you're the first person who has asked me this. we had to redo the second half of the year for the next 10 .ears, our assumption for example, our assumption about interest rates earnings on cash went from 1.9% 2.6%.

government bonds, -- for the next 10 years. cash went from 1.9% to .6%. as a result of that, you're forced to shift into equities and into gold over the next 10 years actually have a substantial return. our long-term return assumptions at the private bank for equities are 6% for the next 10 years but our assumption for emerging markets or for small and medium-size companies is 11% over that time. what you hit upon is the critical thing which is our assumptions as a result of what changed at the beginning of this new economic cycle have markedly been materially altered what we want clients to do. francine: david, good morning from london. what exactly is priced in the markets and how much volatility are we going to see until what

you were mentioning could happen from now until 10 years? a volatility standpoint 3,tween now, let's say, and q we are going to see quite a bit of volatility. the news about the virus i think could get considerably worse for a time and its impact on the economy in the near term could be significant -- meaning, will we take a look at people going back to work in small businesses, in terms of traveling, restaurant purchases -- the things that indicate mobility -- all of those are definitely going to be impact by the degree to which the virus is present or might be present. when we look at six to nine months, we're going to a recovery of well over 90% to 95% normal in terms of what people are going to be doing. as they come back to work and as they begin to spend at a regular work -- level, we will normalize the economy.

when we look at 2021 and 2022, we see significant growth possibilities. growth becauseal there is been so much stimulus and that tailwind will be there. when people have to live through now is a relatively volatile period for the next three to six months followed by what i they will be a considerable recover as we go in next year. tom: david bailin with us with citigroup. we will continue. extraordinary comments, folks, and the lack of return forward for a decade in fixed income. i just put that out on twitter. that is such an important comment. we will have an interview at 8:30 this morning. onill begin with john bolton president biden. then we will address what happened in the room, his book, and we will address at the end of that book the idea of russia and counties to kill marines in afghanistan.

john bolton at 8:30. this is "bloomberg." ♪

tom: francine: this is "bloomberg surveillance." we were having a great conversation with david bailin about what was priced on the markets come the possibly of a second way. ugly david was also telling us he expects emerging markets to wasr -- i believe david

also telling us he expects emerging markets? four. david, why is that? >> first of all, they're starting from the basis points. when you look at the growth that is the rise of the middle class, the fundamental demographics of those markets and the amount they physically can grow in terms of their ability to both supply the population and the world with goods and services, we think those are the predominate trends that will drive those markets higher. francine: when you look at currencies across the world, how much volatility will we see in currencies compared to other asset classes? in 2020 to 2021? >> probably lower for currencies at this point in time. certainly come the stock market where i think we will see considerably high volatility. the reason largely is because the dollar is really -- everything is pegged to what the u.s. is going to do. the u.s. is clearly signaling

what they're going to do and everyone is awaiting the amount of growth to come out of the united states. where you will see a lot of action is in gold. people are worried about what the fed may do in terms of the yield curve and people are worried about the amount of printing and money taken place, that is driving them to the belief that gold is a secure place to park cash when rates are this low. tom: david, i want you to speak to people who are scared stiff. quite frankly, not just the individual investor, but institutions that are essentially petrified. how should they move forward? aboutjust did a survey how to get invested. the most important part of the survey was we look at people who invest today, invest a little over the next few months, or people who wait for a market debt. the people who do worse are those who wait for the market dip. they're waiting for the right entry point. looking over the next 10 years, rates pegged incredibly low with

the amount of stimulus out there, what we believe is going to happen is you will have this growth surge that takes place in 2021. certainly if there is a vaccine or treatment for the disease that takes place in 2021, will have incredible tailwind of growth. second of all, you will have the scarcity of equity. the number of shares to buy. 1% or less interest rate environment will be the story once we get to that place. companies are going to earn a great deal of money. based upon the restructuring. you hinted upon his earlier when you're talking about what is going to happen. efficiency driving revenues higher, adopting these new technologies, including all of the things that have happened with health care, the delivery of goods and services. all of this is rapidly shifting. asset classes, even real estate itself, is now more of a cyclical asset class. all of these are opportunities. in order for people to invest in

this market, up to have a view that is a year or two out and then everything makes a great deal of sense. but if you're watching the news day-to-day an hour to hour, it looks as if the world could in and the next day. that is not going to happen. as investors, we know that. that is what we get paid. tom: in that broad statement, let zero in on real estate. real estate could be all sorts of things. i think of simon property group and the rest. how does commercial real estate move forward out of this pandemic? opportunity or minefield? >> generally speaking, opportunity. for example, when you think about it, people are going to want to continue to work in offices, probably less, but when you think about they're going to want to work closer to home. so someone commuting from connecticut to new york, and our outside of london, would probably like to work in a more suburban environment. density and commercial real

estate is going to go down. density in commercial real estate is going to go down. the growth demand for real estate may rise. where the real estate is in terms of desirability is going to change. the big story in the negative story is in real take -- retail real estate. i think you will see a change in streets and malls. it will take probably two years to four years before we see an evolution of better stories in real estate for real take -- retail. francine: this is what the markets are doing. a lot of the focus is on these volumes on some of the european forces, well below average. this is because of the technical glitch earlier on and it affected trading in the region. gold nearing 1800 and.

krugman at, paul 4:30 in new york, 9:30 p.m. here in london. this is "bloomberg." ♪

this legislation is considered the most important development in the relationship between the central and hong kong government since the

handover. in theme the loopholes hong kong's legal system and law enforcement mechanisms for safeguarding national security. >> the china, and his party had promised to continue -- communist party had promised to continue in law. it is a disturbing development. >> innovation, buildup livelihood. get more land. but stay away from politics. chinather example of why are the chinese companies regime -- red card. day onoombergquint the bloomberg television, bloomberg radio, and the great work of our brent crude orders that are very reporters.int this is a delicate time, to say the least. we have really seen that this morning with sophie kamaruddin on the streets as well. francine, really wonder where this goes to the protests and

also where does it go for global wall street position in hong kong? francine: we have a great story on the bloomberg terminal that has been following some of the police clashes with protesters and some of the arrests under this new law. this is a hong kong waking up to a new reality today after china began enforcing this tripping security law that could really 23hape the financial hub years after to control of the british colony. i think that is something we should not forget, the timing of this is quite spectacular. trying to gauge and figure out how hong kong gets to the weekend. with our news in new york city come here is really a good debt. rikita: china has described its new hong kong's it could be law as a sort of demo cleaned, hanging over its most vocal critics. legislation allows for life

sentences for crimes including subversion and collision with foreign forces. police have made their first arrest under the law, when was an with a hong kong independence flag. new york, new jersey, connecticut have doubled or quarantine list to 16 states. visitors from the states are not welcome unless they agree to self-isolate for 14 days. big jumps in infections. the number of positive coronavirus tests in new york continues to remain low. president trump is standing firm in his defense of military bases with the names of confederate leaders. he vows to veto the defense been enveloping contains a provision that would remove the names of the rebel leaders from the bases. that was included in the measure approved by the republican-led senate armed services committee. in russia, president vladimir putin on track for a big win. exit polls show 76% of voters support a revised constitution

that would let him stay in office until 2036. the current mandate expires in 2024. his approval ratings have slumped while russia's economy reels under the impact of the pandemic. 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 is bloomberg. so much.k you greatly appreciated. 592 page book. bolton, we will attempt to do a book review this morning except the news is overwhelming this. kevin cirilli joins us on what occurred after mr. bolton left the white house. cabin, what is so important to me is the dynamics here are profound and center on the gang of eight who will get a briefing today. if the white house has to explain russians giving bounties

to taliban to kill marines, what will the gang of eight on the hill listen for this morning? kevin: first and foremost, they're going to listen for what would u.s. response be? secondly is that largely the way this issue has played in washington is that it has fallen along partisan lines. i will be fascinated to hear from john bolton. first and foremost, whether or not he in fact believes that president trump, despite his denials, new about this, but more importantly perhaps, if it is in fact true, what does john bolton think should happen even beyond additional sanctions against russia officials? a still, john bolton is wart in washington, particularly among certain foreign policy circles as it relates to russia and china. who in here if that worldview

and is the leader of that worldview from a foreign policy perspective now that he has divorced himself from the president? tom: that is a nice way of putting it. i would not know anything about that, kevin. and at the time we have compressed here this morning, what i find absolutely fascinating is the path forward of our intelligence community. it is no news the president of the united states really has no time for the intelligence community. how should that community convey this atrocious news, true or not, whatever, to our military authorities? where does the pentagon fit in to this uproar? out theap to figure leak situation. this is something that has plagued republican and democratic administration's. it is not links at the top level, it is at the staff level. it has been in the current news climate as well as back in the

obama administration, really something that leaders of both parties have struggled to keep some of the lower ranks from speaking to reporters. francine: kevin, what is joe biden doing? he is not holding any rallies. it is a pretty unusual campaign. how does he muster support? kevin: them or he has stayed out of public view, the higher his poll numbers have gone -- the more he has stayed out of public view, the higher his poll numbers have gone. yesterday he said the president's response to the pandemic has been one of "historic failure." i think as we move forward through this, the trump reelection campaign is going to try to pressure biden to come out more and to have to answer questions. but until that happens, i'm told they really -- yesterday i spoke with a prominent democratic strategist and said they don't

feel like that is a necessity. francine: kevin, weiss president trump losing so much in the polls? does it have anything to do with foreign policy or what we read in bolton's book or how he is dealing some the withheld crisis? kevin: there is a poll that came out that shows 86% of americans are unhappy at the direction of the united states. granted, that could follow -- follow along polarizing lines. however, i think if you look at the unrest of the last few months, whether it is the unrest -- civil unrest or the pandemic and closures and whatnot, i think all of that juxtaposed together has led to significant declines in battleground states for the president. it is very, very, very, very early to count him out. we should note at this time in the last cycle, he was trailing significantly to clinton. tom: kevin, this will be my

first question to ambassador bolton. he is a textbook goldwater republican and goldwater conservative. i believe he is essentially saying he's going to vote for president biden. what kind of foreign policy does john bolton want out of the biden administration? kevin: hawkish. hawkish against china, hawkish against russia. probably even -- i think if you talk to progressives, there were critical of former secretary clinton for being too hawkish on foreign policy but i think john bolton would think this hillary clinton was too progressive. i don't want to put words in anyone's mouth, but, look, he wants to pull biden to the bush wing of republicanism. tom: well said. well said. great britain. cirilli, thank you. this comes on the back of leon

panetta and susan rice's blistering op-ed's we have seen in the last 24 hours. we will have complete coverage of this out of washington as we speak to ambassador bolton and move forward from there. kevin cirilli, thank you so much. it is an interesting day, to say the least. much more coming up. we have not touched really this morning on the pandemic stop we will go to johns hopkins university. lauren sauer with an update as the cases mount about. stay with us. this is "bloomberg." ♪

is "bloomberg surveillance."

track the continue to virus, we have a partnership with leading authority from covid-19, johns hopkins has been at the forefront of the international response. every day we will bring insight from experts in public health and emergency preparedness. today we're delighted to be joined by lauren sauer, johns hopkins university assistant professor of emergency medicine. professor, thank you for joining us. when you look at the number of cases in the u.s. and the number of people in hospital, what needs to be done today for that to go down dramatically? >> i think that most important thing we can do today is publice to encourage the andwearally distance masks. a lot of the research is showing that is working. i think we all want to move toward reopening but looking at the growing case counts, looking at the cases across the united

states, i think it is absolutely critical to maintain as basic public health interventions. get lauren, it is july 1, out the calendar, back-to-school shopping begins in 42 days. are we going to go back to school? what does the pandemic due to the classroom of elementary schools, middle schools, and those disease ridden seniors and juniors in high school? >> everybody wants kids to go back to school. probably parents the most. we have to take a cautious approach to opening. we have a lot more research to do on how kids are affected and how kids transmit the virus. so there are a few things that are important in the planning. understanding how you can keep kids safe and in the classroom, how you can get them back safely, and how you can keep the families of the kids and the teachers and the teachers families say. these are adults, some may be -- you have to figure out ways you

can keep them as they pass possible. that may mean increased testing of kids were going back to school, better access to testing were broadly further family -- more broadly for their families, for teachers, administrators in the school, everyone involved in the process. tom: what do you think will be the process when somebody in chemistry class in the 10th grade gets the virus or their father get the virus? how are we going to do that? >> it will be really hard. i think access to testing remains so critical to all of these reopening strategies. schools are not immune to that just because it seems like kids get less sick or transmit less. there is still a risk. if you have someone back at a school who starts to be symptomatic or has asymptomatic family member, then you backtrack. so you do the things that we

know work. you identify the kid, isolate them from school work pull them out of cash or pull them out of school, to contact tracing. it is hard work. have the only option we right now. those basic public health interventions. francine: lauren sauer, how to encourage people or maybe even force people to wear masks? mask is politically quite divisive right now. it is really challenging. it is something we have been doing a lot of work on. it is a basic intervention. it is safe. we are seeing data that it works. in the early times of the outbreak, there was a lot of mixed messaging because we did not have enough masks for health-care workers, did not know if people could use them safely, had not educated the public on how to wear them. a lot of people, myself included, were skeptical on

their utility. i think we have seen a lot of data come out to know that they are effective, not just keeping themselves safe, but keeping other people say. the message -- my mask is for you and your mask is for me and if we all wear them, we get this through this with fewer deaths. francine: lauren sauer, thank you so much. be sure to check out the latest information and tune in every day for our exclusive conversations with johns hopkins experts for an inside look at battling covid-19. in program note, join bloomberg for the annual broadcast of the boston pops fireworks spectacular. heroes caring on the orchestras fourth of july tradition, this time from the comfort of your own home starting 8:00 p.m. eastern on bloomberg tv, radio. this is "bloomberg." ♪

this is bloomberg.com "bloomberg surveillance." goma sex and the final stages of resolving its biggest legal threat --

malaysia solvent of element fund. could result in a guilty plea for the first time in goldman's history. shares of fedex award after he reported better-than-expected earnings for the last quarter. the company gives the credit to a search healthy health equal and deliveries during the pandemic, plus fedex launched efficiency drive and at home deliveries. google is pushing back at a plan to reopen its u.s. offices. the reason, a surge in coronavirus cases in several western and southern states. all google offices in the u.s. will remain closed until september 7 at the latest. the company had planned to start bringing back some workers next week. that is the bloomberg business flash. francine: thank you so much. airbus has embarked on its most extensive restructuring in the company's history, setting up plans to cut 15,000 jobs worldwide as it intends to circular crisis brought on by

the coronavirus crisis. is benedict.r more where exactly will these cuts be? >> the cuts are predominantly in europe and within europe they are fairly equally split between germany and france. the reason for this is sort of a pan-european company and that equilibrium between france and germany has been very closely guarded in both good and bad times. so when there is extra work to be done, the company is very keen to spread that out over these and when times are tough, the same thing happens in terms of job cuts. we are seeing about 5000 cuts in germany, about 5000 in france, 1700 in the u.k. those are the big numbers. a couple of sprinkled around the rest of the world. it will be interesting to see how those cuts are implemented. the ceo says he wants to do this

without having to fire people outright. he wants to do this through early retirement as best as he can, but he also injected a word of caution and said, look, these are extraordinary times, i can't guarantee this will be done entirely without firing folks. we will have to see how things go. francine: how has the governments reacted to the news so far? close france and germany -- >> france in particular quite recently injected some funds into the aerospace industry. also with companies [indiscernible] there's some dismay on the government side. shortly after receiving these funds, these companies are turning around in the eyes of the government and making these job cuts. from the french government, we heard some grumblings about this much andle too excessive. it will be interesting to see

how those negotiations pan out between the government and the company. cutting: if airbus is so many jobs, are we going to see similar job cuts by boeing or is it just a more streamlined operation? >> no, it is more streamlined. boeing has issues of their own making, as it were posted remember, the 737 max crisis which predates the pandemic, and that is the plane that is still grounded. only yesterday we heard there were new revelations in terms of the certification of this aircraft, that there were -- withthat the faa certifying this plane did not have all the information so both of these companies are in trouble as is the wider industry. we have seen it with lufthansa on a massive bailout, with calen, with qantas. this is something that is rippling through the entire aerospace industry from the manufacturers all the way to the

suppliers and the airlines in between. francine: with the fact -- you mentioned this probe, basically showing boeing withheld data on the system linked to crashes. ae we going through more of criminal investigation or anything like that or it doesn't just look bad for going right now? >> right now it looks bad for a boeing and it has looked bad for going for a while. you might remember these very damaging emails that surfaced a couple of months ago about people inside the company saying this plane was rubbish and it should not be certified. so there is a lot of doubt inside the company about the quality of the aircraft. what we're hearing now and the latest revelations have shown is there is a disconnect between regulators and the airline in terms of what the new aircraft was capable of doing, how some of these stabilizing systems in the words of the

faa, what they said they have is an incomplete understanding of this. this is obviously a problem when your job is to certify an aircraft that you have an incomplete understanding of the operations. to, will sort of come back what is the interaction between regulators and the manufacturer, is there too much pressure on the regulator to see through these planes and then not enough checks and balances? that is something that is being worked through the system. we do not know when the 737 will be back in the air, but this does not look great on boeing. francine: but, thank you so much, senior editor for global business. we're looking at live pictures from hong kong. we have seen the passage of a sweeping security law and the first arrests. breaking news according to the press association, the u.k. is now saying that china long hong kong is a violation of the joint

-- joint treaty. hong kong woke up to a new reality after china began enforcing this security law that could reshape the character that the financial hub has had for the last 23 years. the interview of the day. later on, john bolton. he wrote a book. he will join tom keene, jonathan ferro, lisa abramowicz at 8:30 a.m. this is "bloomberg." ♪

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no one has a sense of what ornings will be in 2020 2021. that says, wefed are just printing the money. >> i think you settle at levels where you do not know where things are going. >> this is bloomberg surveillance with john keenan, jonathan ferro, and lisa abramowicz. >> this is bloomberg surveillance. where live on bloomberg radio and on bloomberg tv alongside. what a way to start. in 90 minutes, we catch up with ambassador bolton right here on bloomberg surveillance. >>