>> u.s. stocks a surprise bid to the upside. coronavirusf the accelerates, with cases in america jumping the most since early may. case closed. the ecb'smakers back qe program, ending a standoff between the central bank and the nation's top court. written'ssaturday, prime minister boris johnson will tell citizens to act

responsibly. welcome to "surveillance." i am may originated in london. better-than-expected jobs data. we have u.s. stock and bond cash market closed today for labor day. if you are watching in the u.s., happy labor day. the nasdaq at a record against the s&p 500, of course, as well as a record, what blistering momentum we have seen so far this year. it is sustainable -- is it sustainable? we will discuss that with our guest this hour. in terms of the bloomberg dollar index, a weekly drop in a month. you see a little bit of weakness in oil, but it is heading for a weaker gain. toois edging higher, not much momentum on this friday, but global equities poised to cap their best week in a month at the end of this week. the first wordo

news, we have got breaking news, euro area june services pmi coming at 48.3, so we did get the german pmi coming in better than expected. it is contractionary territory. europe, better-than-expected, but still in retraction mary territory. we have also learned that the french foreign minister will be soon, as he has resigned. now we have leigh-ann gerrans. hi, leigh-ann. leigh-ann: hi, nejra. this comes as president emmanuel macron is open to revamp his right presidency, including a new top team. he wants to keep pushing for reform, controversial in france. brexiteers on a bright agreement -- broad agreement, despite talks this week ending a day

earlier than planned. they are looking to near i so cold -- a so-called landing plan. both acknowledge major sitting points do remain. passedna bill has congress and now heads to president trump for approval. the legislation would impose sanctions on chinese officials who crackdown on dissent in hong kong. the house and senate moved quickly to pass the legislation after beijing imposed a new national security law in the city. elaine maxwell has been arrested --jeeves lane maxwell ghislaine maxwell has been arrested. epstein'ss jeffrey close associate for years. u.s. prosecutor say she helped him identify, befriend, and groom his victims. declined tohave

comment on charges. global news, 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am leigh-ann gerrans. this is bloomberg. nejra? leigh-ann, thank you so much. u.s. payroll rates were higher than expected, while the jobless rates fell. initial jobless claims top forecasts in the latest week. u.s. stocks rose as the markets assess the prospects of an economic rebound and missed concerns of a second wave of coronavirus cases. the united states economy added almost 5 million jobs in the month of june, shattering all expectations. >> it is a spectacular number, and it helps the overall situation enormously. >> on a standalone basis, this is a very strong report. the jobs 3%, 4% of

coming back is a reasonable expectation, given what is happening on the ground with the progression of the virus. >> the numbers, which look impressive, are really stimulus-driven. >> the state of really underscores how rapid things change in a covid-tainted economy. we think it is way too early to declare victory. maya: -- nejra: joining us this morning, erik nielsen, chief economist at unicredit bank. for some measures, the unemployment rate in the u.s. will remain above pre-covid-19 levels for a decade, so, yes, eightobs report forecasts, if you want to call it that, but as you look forward, what do you expect to see from the labor market in the u.s. in terms of the impact of the u.s. recovery from covid-19? erik: good morning.

yeah, it is tough to say, but you have to remember, furloughed people in america are registered as unemployed, which is opposite , so we had a big spike. above --know if it is will stay above pre-covid levels forever or for many years, but there is a long way back. the thing i worry most about, the thing i think investors worry most about, is the pay gap , how does that pan out? will america eventually do what china and europe did, locked down big sectors of the economy to get this disease under control, or will they ride it out with enormous debt tolls down the line? that remains to be seen. nejra: and with those question

marks hanging over the u.s. economy, erik, a part -- are parts of the u.s. equity market severely mispriced? so comeah, i think -- and my opinion, the nasdaq is playing, right? these are companies for the future to begin discussed. from mentally, the rest of the u.s. stock market, i think, has been too excited about the fed alone, and so generally speaking, we have risky assets, for my taste, which looks a bit rich in america compared to europe and some other places. though,eah, you also, thank that u.s. investment grade credits will soon reverse. why do you think that, given all the support we have from the fed and so many investors saying they are not going to fight the fed?

erik: yeah, so this is a bit of a dangerous thing, to go again central banks. they control the market, right? let's be very clear and honest have how central banks taken the private sector away from market-making these days. but i still find that the outlook in america, on the economy, compared to, say, europe, is not so favorable, and the reason sits fundamentally with this issue of how they are dealing with the pandemic, and then within the time when they come hopefully soon, get hold of this, we will go into a mode where a lot of it will be taken to the election, and the -- and what the outcome of that could be, and how they could shift policies again, and i think markets will start to be a bit more uncertain, where we have now, for the first time in many, many years, and europe, the

policymakers have handled the pandemic quite well, which is really important. nejra: what you said about reallocating u.s. assets elsewhere, if so, will they reallocate more asset the dollar? -- more asset equities or the dollar? certainly i am starting to understand relative valuations between europe and american in the premarket's. for the rest, i mean, and a lot of good things to be said about those companies, again, but the broader american story, where you have a lot of fueling by companies into the crisis, taking credit to buy back their of theres, two-thirds credit for that, more or less, wherein europe, it is the other way around, i find europeans

trying to be more attractive than americans. the rightink this is way about it. erik, we will take that conversation up in a moment. we have got boris johnson speaking on ldc radio. of course you have restaurants reopening this weekend, saturday, july 4, tend to be called super saturday, boris johnson says britain's showed enjoy the summer "sensibly," and that the u.k. is not out of the woods yet. this is bloomberg. ♪ ♪

nejra: join bloomberg for our annual broadcast of the boston pops fireworks spectacular, a boston pops salute our heroes, carrying on the fourth of july tradition come on television, radio, and dot com.

a broad alliance voted to back the program seen as propping up the euro area economy. germany's top court ruled it could be illegal. still with us, erik nielsen from unicredit bank. erik, in terms of where the ecb goes from here, i mean, you do not see a whole lot changing until 2025. erik: that is right. think there will be holding the economy for a long, long time. the ecb remains in the game. the pandemic emergency program they have now will probably be extended a bit, depending on the pandemic, but they will have to

remain in the game and keep that minimum the balance sheet of these elevated levels, probably a little bit more, and rates that threaten probably no more for a long, long time. i am almost entirely unsure about that. nejra: does remaining in the that includeoes yield curve control, and efforts to keep spreads contained? erik: yeah, it is an interesting question, and it is something i have been talking already quite about, because what they have done is exactly what you have said. and keepingcontrol the sovereign spreads under control. saying, "we out and do control the yield curve," but during the pandemic, you do all this business stuff, and we will make sure that monetary conditions do not tighten. so that is the factor of yield

curve control. they will probably let that go. you have to give the curve back to the market at some stage, right? the other one is trickier. there i think they will have to be involved for a longer time, because one of the biggest problems they have had an europe is that monetary positions were different in different countries. that cannot be acceptable. presidency, the ecb, the chief economist, they made very clear that when they look at monetary conditions, factorsk at it and all of the ecb, as they say. i think they will be remained involved in that space for a long time. nejra: erik, you also think europe is likely to be a key recipient of the allocation by investors away from the u.s. and emerging markets. why? erik: for two reasons. i think the european policy response has been better than in

the u.s., with the pandemic and the fiscal measures, and, number two, the valuations are just more attractive now, in the broad segment of the markets. so i think this is -- when it becomes clearer, and i could add a third thing, which is in europe now, they see europe actually designing a strategy of ambition, which is basically the microphone/merkel plan, -- macron/merkel plan, the green new energy. they actually keep assets to be born, and probably, i think, a better recovery van in america -- than in america. i think that will be the effectiveness. unfortunately, for europe, that also means a stronger euro. nejra: a stronger euro, ok. will there be a former state

capitalism that might worry investors? erik: no. this is a very good question, and there is a degree of it now, with a lot of government involvement and stake holding and companies, but europe has been pretty good of getting out of this, to some extent. what i think it is more about is to set incentives, to encourage the industries that they want to develop, particularly in the green industries, but also digitalization come along overdue, by the way, in -- also digitalization, long overdue, by the way, in europe. china has true state capitalism. it is going to be nothing like china at all, in that sense. it is more a matter of saying the world has changed. we cannot really rely on america, in many ways, we cannot rely on russia or china, so we have to develop more

independence as a european economy. this is basically what macron and merkel said and what is adapted by the commission. nejra: erik nielsen, pleasure to happy with us. thank you so much. group chief economist at unicredit bank. dalio says they are no longer free. ours was a conversation with the hedge fund manager later in the program. this is bloomberg. ♪ this is bloomberg. ♪

nejra: this is "bloomberg surveillance." i am nejra cehic in london. french prime minister édouard philippe has resigned as president emmanuel macron's cabinet shakeup begins. bloomberg's caroline connan joins us on the line. update us on the latest. caroline: we should know the in theench government next two hours. it is possible that the prime minister, édouard philippe, could be reappointed, because this resignation we just had is a step in the process, and we should have an entirely new government, and the question is -- does emmanuel macron want to keep édouard philippe as prime minister? sure, he is very popular, which actually could be a problem for macron's next--

reelection in 2022. édouard philippe has already crisesndling all of the over the past 20 years, not only the pandemic, but he tried to do retirement reform last winter, and before that, you had one year of protests with the yellow vests. emmanuel macron needs to show a fresh start with this new we will have to see whether édouard philippe stays or not. nejra: right. so what could happen next, then? caroline: this weekend, we should know whether he stays or not. the alternatives, there are a few options, for example, two men are on the shortlist, the german defense minister, who used to be a specialist, so i would give -- that would give

macron a special touch to the government. you saw last week and we had the so-called municipal elections, and there was a huge green wave across the country in macron's party. pretty much in every big city. i could also be the card. --- that could also be the card. nejra: great to have you with us, bloomberg's caroline connan , thank you so much. seeing european equities actually edge into the red right now. they were green righ earlier. this is bloomberg. ♪

nejra: economics, finance, politics. this is "bloomberg surveillance," and i am nejra cehic in london.

happy july 4, anyone watching in the u.s. we are seeing u.s. futures pointing higher after gains yesterday. u.s. cash and stocks, bond markets are closed. europe stocks fluctuating slightly. get to first word news with leigh-ann gerrans. leigh-ann: good morning nejra. areas across the u.s. are tightening rules as virus cases continue to accelerate. texas is making face masks compulsory, a reversal for governor abbott, who had long opposed the move. anthony fauci is warning the virus may be mutating, and that is making it easier for the pathogen to spread. nearly 5 million new jobs were added in the u.s. in june, and president trump says this shows the economy is roaring back. democratic challenger joe biden is less optimistic. he says while it is good people are getting back to work, the

high jobless rate is no victory to be celebrated. he says the u.s. is still in a deep hole. ang kong police has charged 24-year-old man with inciting secession and committing terror attacks, charges brought under the new security law. the man was arrested for driving his motorcycle into officers, injuring several. the bike had the slogan, "liberate hong kong." german lawmakers have ended a legal standoff over the european central bank bond buying program. backad alliance voted to the program, seen as the key to propping up the euro area economy. by speech was propped itmany top's course that -- means bundesbank and stay in the program. act responsibly -- that will be the message from prime minister boris johnson today when he speaks at a press conference later.

it comes as pubs prepared to reopen across the country. johnson says the u.k. is not out of the woods, and he is prepared to shut parts of the economy again if coronavirus cases surge. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm 120 countries, leigh-ann gerrans. this is bloomberg. nejra? nejra: thank you so much. just with some dated to bring you from the u.k. at 37.1,pmi coming in better than expectations. we are looking at contraction territory. we saw a similar picture for the euro zone at the top of the hour. some difficulty in europe and the u.k. let's get to an exclusive interview from france. congress --economic conference is relocating to paris. as,ceo of utility so

welcome to bloomberg. thank you for joining us. we appreciate your time. your panel is about tackling climate change. theoptimistic are you that covid-19 crisis has changed the way we address the issue for the better. trend: thank you for the invitation. basically all the issues are relating to a global change, backed on issues as important as the water cycle, as fighting against pollution. that it shows these issues to be addressed as a key priority, all of the countries agreeing to revise the economy. e.u.ng exchanges with both

commissioner or values of the governments. we have a very good reception around redirecting investment. we have been there before, and we will be there after covid. nejra: you have mentioned the possibility previously about tracing the coronavirus in wastewater. planning tonment give you a key role in this surveillance in the pandemic? bertrand: this is a result we have been carrying out in the past month. i want to make clear there is no issue of drinking water under treatment processes. there is no risk around drinking water. but we find traces of the virus in wastewater, with water treatment.

--is sophisticated enough to we are able to correlate the and we are dna putting in place in france and several countries, the watch network to be able to anticipate what we call this wave in a couple of european countries. this is the case in france. this will be the case in spain, and we know our dutch colleagues are doing the same. nejra: talk to me about your business as well in the wake of the covid-19 crisis. how long will it take for suez to recover the volumes of water and waste treatments that has been lost by the crisis? trend: -- bertrand: all in all we expect a

loss of revenue related to the loss of volume of around 6%. the situation is very different from one continent to another. a sense of --ed it is the case in europe since mid-june. and in the u.s. and latin america. so we see a very important rebound as soon the economy is starting again to operate. but there are still sectors that are not up to speed, air transportation, manufacturing, and i'm afraid that this will take some time to get back to still levels as there is a lot of risk in terms of one country, from -- travel from one country to another.

we think volumes should get back , more inical levels the second half of 2021. nejra: ok, second half of 2021. what does that mean for asset disposals. last year you announced a plan to send -- to sell as much as 4 billion euros of assets by 2023. when will we see the first disposals, or has that plan changed since the crisis? are you planning to hold onto these assets now? bertrand: what we have seen is the crisis -- fully validates the strength of repositioning. the processes for what we call wave one is definitely promising well. we have buyers, so we have the ability to throw down for

andrial issues, announcement will be made during the second part of the year. arounds a lot of rumors around our spanish asset, and i would like to clarify that this is not part of that. you fork, well, thank that. let's go back to the environmental transition, particular in france. macron has pledged that the government would pledge an extra 15 billion euros over the next two years to facilitate that transition. prime minister edouard phillippe has resigned. the nupathe that emmanuel macron is talking about for the government -- -- this new path that emmanuel macron is talking about for the government -- is

that needed for the environmental transition? bertrand: when we see is definitely a policy of investing in industries of the future, to really accelerate the necessary adaptation,on, and climate change is clearly one of -- we need to invest europe., digital and our essential services around water management and weight management -- waste management are among those essential needs. whato invest into that -- is a decision of the president in terms of the composition of the government, i am certain that those necessary investments will be taken into account and

we will get something for that. nejra: thank you so much for speaking to us today. camas, -- after three months of quiet, a big day for england's high street streets tomorrow as the hospitality -- we will have jason atherton next. this is bloomberg. ♪

nejra: this is bloomberg surveillance, i'm nejra cehic in london. tomorrow is super saturday in

england. willurants, hotels, finally reopen 3.5 months after the coronavirus lockdown. almost a million as patellar the staff are respected to return from furlough over the course of july, a major step in restarting the u.k. economy. joining me now is restaurant your jason atherton. jasonrestaurant tour atherton. what is your reopening strategy in london? which opened -- which restaurants are opening when and why? jason: thank you for having me on. we have not dived in on july 4. we wanted to give it a few weeks to wait to see what customer perception was going to be when we come back. i am very cautious about safety. for me personally, it is all about customer comforts and making sure that when the customers come through the door, absolutely their safety is our number one concern, and also for

our employees. where --ave a grip of do people want face masks, do they not one face masks? do they want employees wearing white gloves or not? we are going to watch very closely. the first batch of restaurants will open up on august 1. then inive social, and soho. and in mid-august, and once we have had a couple of weeks, we will open up a tavern. after that we will open up in the city of london, which is our flagship restaurant in town. that's it. wanted toon, i just ask how the demand has been. withou already backed up

bookings from customers, or have you not open those books yet? what are you seeing for customer demand with these reopening's? jason: we open back up two days ago, so we have people getting back to work to get bookings back into the system. it is looking quite good the first week. and let of people miss those restaurants and wanted to come back, so that is very encouraging. they will bounce back quite quickly, and then it is all about consumer confidence and sustainability, making sure that we as a business, as a generous hospitality sector, we have to get our points much lower than they were so that the landlords deal with the overhead. the price inflation, with brexit and that bringing inflation up. we have a lot of work to do over the next two years.

the wayill bounce back it was pre-covid-19. nejra: when you talk about the industry bouncing back quickly, i wonder how it is going to do that when you said before a restaurant needs to be at 75% capacity to make any profit. but that seems to be a struggle with social distancing. absolutely, but they were pre-covid numbers. if we ran that pre-covid, we covid, backedpost with40%, going back overhead. the breaking point comes tumbling down, and that is our number one goal. it is all about survival. right now it is about putting the team back to work, getting our customers safe and getting our standards back where they were so we can compete on an international level food wise.

so that when tourists do come back -- an international travel comes back, we have to be at the top of the list. that is within our site. nejra: you have already started reopening restaurants and some of your other branches around the world. how has that don come and what have you learned to implement the reopening in the u.k.? really strange thing. in shanghai, we have no social distancing. everyone wears face masks. they take them off to eat and then they put them back on again. withhave to wear them public transport. had -- we'ree above budget in our japanese restaurant in shanghai. in dubai, because a lot of

people cannot travel, people are going out, so again, we are not packed but we are doing quite well in dubai. we we closed qatar because couldn't get it going again. each region is taking this differently. in dubai, we can only put our restaurants by 30% to start with. now it is 50. we have to take each region like .e do, like london it just goes to show that each region is different. for us, the big one after london is new york. we have a very successful restaurant there. all the personnel, the cash flows, trying to get that back up and running again as soon as possible. as we get ready, we are declaring all indoor dining now

definitely as of a few days ago. each day as it comes, it brings a different problem. we have to get on with it, face up to it, and rise to the challenge and get on and get the economy back where we can. address the challenge of cost-cutting and profitability. how will you manage cost-cutting across your restaurants while maintaining the quality customers expect from high-end restaurants such as yours. staff it is all about ratio to customers. if you have 77 staff to 100 customers, that is three quarters, 77 per 100 people. do 40 only planning to customers per lunch, 55 predinner. there's 55 predinner. that is where we are at until we

can increase numbers and bring staff back on board to service customers. so that we can encourage people to come back out eating again. nejra: as you mentioned staff, jason, it leads me to ask what you think is going to happen in terms of jobs in the restaurant industry. of course, a lot of people were at least temporarily laid off over the past 3.5 months in the u.k. do you expect there to be a lot of permanent job losses across the industry? bertrand: 100%, -- jason: 100%, yeah. that is the way it is going and there is no immediate remedy. there will be mass redundancy in our industry, unfortunately. high-end dining in people's homes, that is something we are going to explore, taking our high-end dining from our

restaurants, stepping up the platform where people can -- if they don't want to bring their group to our restaurant, for obvious reasons, then we can bring the restaurant to them. finished, meeting is we can bring in an amazing course. geter than them having to taxis, get on tubes, get on buses to come all the way to the come to us. so that is -- we have to look at new avenues, new revenue streams. and how we can make that work. interesting. so great to talk to you today. thank you so much for giving us your time, chef and restaurant eur jason atherton. this is bloomberg. ♪

>> after world war ii, the united states embarked on a path toward income equality as a top percent of earners lost a

significant share of the nation's income for a generation. in the early 1970's, the nation took an abrupt turn in earnings or distribute. flashforward two today, and the nation has the highest level of income inequality among all the g7 nations. the bottom salary for american families roughly doubled from in5 to 1973, while incomes the top 1% grew by just over one third. but between 1973 and 2007, the bottom 99% so income growth of only 15% while income for the top 1% more than tripled. role inys a large economic inequality. the pew research center found that in 2016, the net worth of a typical white american family was 10 times that of a typical black family. the recent economic downturn will likely make things only worse during the last recession the medium -- the median net

worth of black families declined more than that of black families, while white and asian americans out earned black and hispanic americans in every rung on the economic ladder. economic increasing inequality are not likely to stop anytime soon. the congressional budget office itbudget office says that 1%l grow -- boosting the commutative growth to 281% over the past 40 years. nejra: that was a look at wealth inequality in the u.s. more bloomberg surveillance next. this is bloomberg. ♪ the best tv experience just got better

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nejra: u.s. jobs figures surprise to the upside, but continuing jobless claims show labor market weakness persists. the spread of the coronavirus accelerates, with cases in america jumping the most since early may. case closed -- german lawmakers back the ecb's qe program, ending a standoff between the central bank and the nation's top court. and super saturday -- u.k. prime minister boris johnson will tell citizens to act responsibly as pubs and restaurants in england reopen tomorrow. welcome to "surveillance." i'm nejra cehic in london. happy fourth of july, happy independence day. if you are watching in the u.s., u.s. stocks and markets closed today. europe is trading. that's get the bloomberg first word news with leigh-ann gerrans. hi, nejra. french prime minister edouard phillippe has resigned according to a statement from the in these ape paris. it comes as emmanuel macron is revamping his presidency, including