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 a new top team.

he wants to keep pushing for pension reform, controversial in france. brexit negotiators appear to be homing in on a broad agreement despite talks this week ending a day earlier than planned. officials told us the two teams are beginning to near a so-called landing zone that could form the basis of a deal. the two sides will regroup in london next week. -- majorowledge meter sticking points to remain. a turkish court has opened a trial to two aides of mohammed selman -- mohammed bin salman. other saudi nationals are being tried. prosecutors are seeking life in prison for the defendants, who have all left turkey. areas across the u.s. are tightening rules as virus cases continue to accelerate. texas is making face masks compulsory. it is reversal of governor greg abbott's long opposing the move.

warns that theci virus may be mutating, making it easier for pathogens to spread. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, i'm leigh-ann gerrans, this is bloomberg. nejra? nejra: leigh-ann, thank you so much. let's get a look at the markets. u.s. stock and bond markets closed today for independence day. we did see again in u.s. equities after that better than expected jobs data. in terms of europe, fluctuating a little bit, not getting a lot of indication from the stoxx 600 right now u.s. futures in terms of s&p mne, slightly positive, as our nasdaq futures, nasdaq hitting another record yesterday, and a record gap for the s&p 500 as well. can it continue? we are looking at a little bit of dollar weakness for the week. it is heading for his first weekly drop in a month -- it's

first weekly drop in a month, and in terms of oil, that is slipping slightly today, but heading for a weekly gain. gold in new york has hit 1800, trading at 1775, unchanged today. joining us is nigel bolton. nigel, great to have you on the show with us. we have seen quite a bit of risk on in equity markets this week. global equities .2 cap their best week in a month, partly on improving economic data. this has been happening despite the fact that we have been seeing a resurgence of cases in many places, including the u.s. are we done with the post covid rally that we have seen in global equities?

nejra: i think we have a little bit of an issue there. i thought it was just me. we are not able to hear our guest, nigel bolton will stay with us. that conversation will stay with us -- that conversation is coming up next. this is bloomberg. ♪

nejra: this is "bloomberg surveillance." i'm nejra cherish in london. centralo says recent bank actions -- i am nejra cehic in london. ray dalio says recent central bank actions, he spoke with us.

take a listen. ray: today the economy and the markets are driven by the theral banks, and coordination with the central government. what i mean by that is the purchases right now of financial assets by the federal reserve or the purchases by the purchases by the federal reserve of government securities are the drivers of that market. so of the production of the money, if you look at money, and you look at who is in the market -- so the federal reserve, for example, set an interest rate that, for different types of creditors, based on its economic objective, in the old days, let's say when we had the 2008 financial crisis, we needed to protect banks because they were systemically important. and then money market funds and commercial paper and the like. now it is much broader than

that. the world economy is systemically important. if they did not go out and make lending to companies, including what we call fallen angels, those that were just above investment grade and fell into investment-grade, we would lose large parts of our economy. so we are in a situation now they are the market makers. take the market out, take the central banks out, and you have a different story. including the value of money. what is the value of money? think about it in europe. the central bank will lend to bank at a -1%. so that means you don't have interest payments. in fact, you have interest credits. in the central banks will take that debt on. they will own it, and they have a political agenda, not an

economic agenda, in which they will determine whether they will be paid back or when they want to be paid back, based on how the economy is doing and what will happen. so in that case, like for example in europe, and the similar situations in the united states and japan to varying degrees, they will make loans that will have interest credits zero -- youet's say don't have to pay interest back -- and you may not have to pay principal back. it depends on the conditions. those are markets which are driven by central banks not only actions but their desire to be an owner of those assets, and their priorities about that ownership when they buy and when they sell are not the same as the classic free market allocations. as a result, the capital markets allocatinge markets resources in traditional raise

-- traditional ways. >> one of the questions investors are wrestling with is how far central banks are willing to go in their effort to reflate financial assets to begin with, and then of course they hope, transmit something through to the real economy that would result in growth and jobs. how far are central banks willing to go with this power they have discovered they have? banks are willing go, as far asd to it takes in order to keep the system afloat. because when the late stages, we have a lot of debt, you are going to cease -- to see central bank balance sheets explode. they have to because the choice is a sinking ship.

nejra: joining us is nigel bolton of blackrock. what is the trajectory for global equity markets on the headline level going the second quarter that we had? nejra.good morning, it is positive for equity markets and it is down to the policy we are seeing come from essential banks, augmented by fiscal policy as well. this sets a positive background for equity assets. when you look at how bond markets have reacted and the yields that are available in bond markets, particularly government bonds, and you compare that to the free cash flow yield available from equity markets -- if you look at europe, through cashel yield is canbout 5% is around 4% you see by equities look very attractive. despite the run that they have had, relative to bonds. i think that is the underlying driver here, which is really seeing this very strong recovery

in equity market level, from the lows we saw in march. it is less to do with the immediate earnings in the immediate slow around the recovery, although that is relatively positive at the moment. this is really thinking through over the next 6, 12, 18 months and beyond. where do you put your money as an investor? when you look at it in that like an equities look attractive place to be. much moreonder how the tech heavyweights can be attractive. thes outperformance versus s&p 500, also at a record, which means it is surpassing the dot-com bubble. how much more can this continue -- the dot-com era. how much more can this continue happening? nigel: the fallout coming out of this pandemic is that we have seen an acceleration in a number

of trends. digitalization, online, the use of technology has just accelerated through this pandemic, and we expect that to continue as we come of the other side. although valuations do look expensive, you can see that that is actually backed up by very strong and resilient growth. i think that is going to be a continuing driver for that technology sector. but saying that, i do think that you will need to be increasingly stock selective. you are going to have to be very picky about the individual companies you are going into because it is going to be down to the results of those individual companies as we move through the next 12 to 18 months. nejra: nigel, on the stock selection, where are the best active opportunities in a post-pandemic world? nigel: i think europe is looking increasingly attractive. there are a few key reasons why that is the case. europe has been out of favor for a number of years, and the u.s.

has significantly outperformed during that whole period. during have seen post or the pandemic and the reactions of policymakers to that is actually a pretty swift response from europe. that compares with maybe a slightly more mixed response from the u.s. that is both in terms of what the central bank has done, particularly with what we have seen coming through on the fiscal side, the combination of that monetary and fiscal response is putting europe into a pretty good place, where valuations are also very attractive. in our analysis, europe is probably around 15% or 20% cheap relative to the u.s. equity market. that is not to say we don't like u.s. equities, but relative, europe actually looks in a very attractive position. the other thing you need to think about is that we have the forthcoming presidential elections in the u.s. and that for become a focus investors during the autumn

period, and that will be a risk factor that i don't think is fully reflected in u.s. equity prices. emma: talk to me more -- nejra: talk to me more about the strategy you would take to equity investing right now. i spoke to socgen this week. they have a basket that they look at which benefits from the theme of continuing social distancing because they believe that that is here to stay. investmentslgebra's . they look at investment. you look at a strong company but within a strong economy, and that is where they are seeing the best opportunities. what is your strategy? nigel: it is very much bottom-up. company management is where we build our thesis and models from. what we're hearing from management -- it is quite easy when you compare a number of different company management's over a few days and a few weeks and you can see those companies

are reacting quite quickly, taking advantage of this, and maybe some other companies that are struggling a little bit. if you look at the broad areas that we think are interesting, i areioned european equities attractive. i think health care has some good interesting growth opportunities there, but there are some new areas that may we have not really been focused on too much over the last few years. i think european banks are interesting again after many years of underperformance. i do think that areas of the industrial sector are also very attractive, and i think the construction of materials -- that partly reflects the new regime we are moving into with the fiscal and monetary background. but it has to be stock specific. you do need to do your homework. understand the cash flow and the balance sheets of those companies and what is happening to that business model, how the management is adapting. this has become a stock pickers

market. probably quite different than the market has seen over the last five or six years or so. nejra: you could pretty much rely on multiple expansion. nigel bolton, thank you for your time. next, yotam ottolenghi. this is bloomberg. no no

nejra: tomorrow is super saturday in england. restaurants, cinemas, and hairdressers will reopen 3.5 months after the coronavirus lockdown. most one million hospitality staff are expected to return to work from furlough over july, marking a major step to restarting the u.k. economy. joining me now is yotam ottolenghi, chef and ottolenghi co-founder. you don't need an introduction, certainly not in london. thank you for joining. let's start by talking about the reopening. officially, you are allowed to reopen tomorrow, but how are you approaching the reopening in london? how would you characterize the way you are doing it? open one ofing to our restaurants, and central london. we will be opening on thursday, not quite tomorrow because we thought we needed a bit more time to get together and create

a safe environment for our customers and staff. with the social distancing, byre we have separation screens to create bubbles of teams, so if one team goes down we have another team to come in and replace it. we have a whole set of measures that we needed to put together in order to reopen on thursday, and we are taking a cautious approach. we are opening first, seeing what situation we can learn from this reopening that happens on thursday, and then we will carry on an open are other restaurants accordingly. those picturesat that have just come on the tv, i have sat on one of those barstools and had a great experience. how will the experience be different for customers going to the restaurants from july 9 and

onwards? tablesyou will see fewer and chairs inside the restaurant. we are going to lose about a third of our seats inside, but we are going to try to use some of our outside space. there is a space outside the restaurant. it is perfect to eat outdoors, so we will create that and create a little bar outside to cater to people who are -- who want to eat or have to eat --side, and we are going to staff are going to wear masks, and we are going to have disposable menus. we are going to try to make it fun, but keep it really safe because people go out to eat for -- it is it is really an experience that we are giving. i think london restaurants have become world renowned, because

-- we have been incredibly creative in making an attractive and delicious come and as a result we have become a massive industry in the whole country many.employees nejra: you have approached click and collect, including hot meals. do you see yourself considering down that path, doing more of it then in-restaurant dining, or do you see a return to normality? yotam: i don't think we are seeing a return to normality any time soon, so we are carrying on with all the revenue streams -- delivery, click and collect, dinners, so that people can reheat at home, all those kinds areew revenue streams definitely going to stay there for the foreseeable future.

there is so much uncertainty. this is what i am constantly talking about to my colleague chefs about. the level of uncertainty does not allow us to give up any revenue stream. as we know, the high streams are very quiet at the moment. businesses have not gotten back to full operation. people are waiting for the summer. all these factors make it really difficult for us to operate just based on the revenues that we have been receiving pre-corona at times. have much time left, but are you satisfied with the support the government is giving you in terms of being able to pay your rent? yotam: that is a very difficult situation we have with rent. out to not have to pay rent for a substantial time. we are not fighting against the landlord, we are playing with

the landlord. and now it is crunch time. every individual restaurant needs to negotiate with their landlords because we obviously cannot pay the same rent because we do not have the income. so over the next three months, it is real crunch time. some restaurants will survive and others won't, based on how much collaboration with landlords we will be able to create. but it will be very difficult conversations to be had. nejra: yes. well, we wish you luck. think you for joining us. ottolenghi, great to have you with us. with benoite speak coeure. this is bloomberg. ♪

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["stars and stripes forever"] >> join bloomberg for our annual broadcast of the fireworks spectacular, carrying on the fourth of july tradition, starting at 8:00 p.m. on bloomberg television, radio and .com. here is bloomberg first word news. >> areas across the u.s. are tightening rules as virus cases accelerate.

texas is making face masks compulsory, a reversal for the governor who long opposed the move. dr. fauci is warning the virus may be mutating and making it easier for the pathogens to spread. nearly 5 million new jobs were added in the u.s. in june, and the president says it shows the economy is roaring back. but joe biden is less optimistic and says, while it is good people are going back to work, the high jobless rate is no victory to be celebrated. he says the u.s. is still in a deep hole. kim jong-un is urging officials to stay alert and keep up the fight against the coronavirus. he warns that complacency could lead to "unimaginable crisis." he has reaffirmed north korea's claim did not have had a single case of covid-19. this is highly doubted by global health officials. and act responsibly, the message

from prime minister boris johnson when he speaks at a press conference. it comes as pubs prepared to reopen across the country, but johnson says of the country is not out of the woods and he is prepared to shut down parts of the economy again if coronavirus cases surge. 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. german lawmakers have ended a legal standoff over the european central bank's broad buying -- bond buying. the program has been key to propping up the economy. the dispute was sparked by the top card that ruled purchases could be illegal. but the vote means the bone e bone disdain th

can stay in the program. joining us is benoit coeure. great to have you. thank you for joining us. they put out a report a few days ago talking about the fact that the crisis fighting measures taken by central banks to not constitute monetary financing, but there is a key risk of fiscal dominance. as we look ahead to the second half and the risk of second waves, does this risk of fiscal dominance become even greater? benoit: good morning. i am very happy to join you. indeed, in our annual report, we blurred line. central banks have had to do a lot in this crisis, and it is not over. as we heard, some cases are picking up. and central banks must continue

taking uncertainty and helping households to face uncertainty. the more they do, the more they have to invent new instruments and blurff the risks the line between fiscal policy and monetary policy. nejra: do you actually see that readjusting at any point, or are they more likely to cross the line they are getting closer to? benoit: they have readjusted. if you take europe as an example, you have seen strong action from all european governments, and also for the to useime the plan is common resources, coordinated resources to face the crisis. king up,al policy is wa

and that is good news and a move in the right direction. nejra: i want to lean on your expertise from being a former board member at the ecb, because i spoke to a guest earlier who said we will not see positive interest rates in europe, a stupor curve, or balance sheet reduction this side of 2025. do you find that problematic? benoit: we are listening to what markets have to say. it depends on how the european economy will get out of this crisis, which is honestly hard to tell. it is a likely scenario. and the thing here is about raising productivity in the euro zone, trying to get where we were before the crisis. and so that ultimately the ecb

can raise rates. the key is productivity. nejra: and what are some of the steps that can be taken to lift that productivity? benoit: well, it is a lot to do -- i mean, governments are focused on the crisis today. there is so much uncertainty, and you have to help people walk through that foggy outlook that is the coronavirus outlet.a to do withs unemployment going providing liquidity, and that is what governments are focused on. they should keep in mind productivity, indeed commanded that means continued reforms in europe, and it is also about innovation. there should be a massive effort to support innovation and to support innovation in a way that is planet friendly, that is

helpful for the clients, and that is a big challenge for europe moving out of this crisis. but, unfortunately, we are not even yet there. nejra: i will ask about the recovery in a moment, because you talked about us not being there yet, but state capitalism has come up a lot in my conversations with various investors, when we talk about the fiscal response globally. he will be on a panel entitled "region, state, who should respond to crises?" do you see us moving into an area of some form of state capitalism, and is that the right direction for the global economy? benoit: i do not think it would be the right direction for the global economy. free markets have served the global economy well. that said, free markets have the haveyfficiency,

created growth and productivity, but they have failed to produce fairness and instability. so, we will need a little bit of government intervention to turn the dial, so that market forces can not only produce productivity, but also stability. that would be a big discussion in the next year, but it does not imply that we should walk back to a planned economy. i do nothing that is good for innovation. nejra: right. let me ask about the recovery, just before we wrap up this part of the conversation. what is your outlook? you get all kinds of alphabet soup letters thrown out, i do not know how useful you find them. what does the recovery look like for you in 2021? benoit: i think it is too early

to discuss letters, or even the amount of uncertainty we face with the virus itself. you see it coming back in asia, in europe. you see the situation is not yet under control in the americas. so, we are really still in the first phase of this crisis. to --is not even useful we are still at the beginning. and the challenges central banks are facing now is to manage the crisis. nejra: the bank of international istlements's benoit coeure staying with us. 6:30 a.m., we will hear from

.ay dalio this is bumper. ♪ -- this is bloomberg. ♪

nejra: this is "bloomberg surveillance." still with us is benoit coeure of bank for international settlements. a form or ecb executive board member. we had a wide-ranging discussion just now over the role of central banks in dealing with the coronavirus crisis, but in your role as head of the innovation hub, i wanted to ask about what sort of rule innovation or digital innovation is going to play over the next few years. benoit: i think that innovation will be absolutely crucial to lift us out of this crisis. we see the crisis already being

-- bringing a push to our digitalization in some areas, like trade, obviously. and payments, also. it's really jumping in market economies. pushow we now have a big toward innovation, a great opportunity to live productivity. but what we are doing is harnessing innovation on financial markets, that is what we do. nejra: yeah, and which countries do you see sort of leading that digital innovation push? that's actually a good question because we had recently to decide on opening new centers for our innovation hub, and we just announced we will have centers in four new countries.

we already have centers in singapore, switzerland and hong kong. and we are going to open new stockholm,london, in toronto and in paris. and we are going to have a strategic partnership with the federal reserve in new york. that gives you a view of how global the initiative is going to be. of people know, a lot i speak to across our programs talk about one of the impacts of covid-19 long-term, actually spurring more digital innovation. that we will see changes in that space, and that will have an impact on investors. what roles will central banks play in fostering that, but also in making sure that in terms of regulation, we do not have instances that are problematic

for consumers or investors? benoit: that is a big part of our economic report, which was released earlier this week. and we believe that central y ins will continue to be ke fostering innovations in payments. central banks may have to keep providing core infrastructures, end we also believe that at som point looking forward, central banks and digital currency could be the right way to provide innovation and payments for the public. in terms of regulation, that's more about the financial board, but they are also working hard to make sure that all these new kinds of payments will be overseen or supervised based on

principles that [indiscernible] here. nejra: i want to ask a question about france, because the french government is looking at ways to extend crisis measures with a long-term furlough turning loan guarantees into partial equity. what are the risks of governments prolonging emergency support, in france and elsewhere? benoit: it is a transition. i think that in europe, the most acute phase of the crisis is behind us. and we do not see signs of the crisis coming back, or the virus coming back to the extent that policies, butnew you never know. ist the government has to do

take us on a path that is more sustainable, but also means moving from liquidity issues to solvent issues. will have as solvency issues and we will have to move to solve that. i also need to ask -- of course, we are aware of the scandal of wirecard, it has captured the attention of investors globally. does it show a gap in regulation? benoit: it is hard for me to comment on that regulatory issue. it's very high level. but i can say that given the bonds, not only payments, but in financial markets generally, we need

regulation that addresses bond. and it is up to the european commission to do that. that is all i can say. nejra: we appreciate your time and your responses. thank you for joining us, benoit coeure, former ecb executive board member. broadcastour annual of the boston pops spectacular, a salute to heroes, this saturday at 8:00 p.m. on bloomberg television, radio and bloomberg.com. this is bloomberg. ♪

nejra: this is "bloomberg surveillance." from the campaign trail to the halls of congress, the wealth gap is a frequent topic, but less than a century ago things looked different from today. david westin has more. : after world war ii, the u.s. embarked on a path toward income inequality. as the top one percent of

earners lost a significant share of the nation's income for a generation. in the early 1970's, the nation took a turn in how earnings are distributed. flash forward to today in america has the highest level of wealth inequality among all of the g7 nations. income tax data shows the average salary for the bottom 99% of american families roughly doubled from 1945 to 1973, while incomes for the top 1% grew by over one third. 1973-2007, the bottom 99% saw an income growth of only 15%, while income for the top 1% more than tripled. race plays a large role in economic inequality. the p research center found 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 median net worth of black families declined more than that of white families. while white and asian americans out earned black and hispanic americans at every wrong on the economic ladder. trends in income inequality are not likely to stop soon. the budget office projects incomes for the wealthiest americans will continue to grow significantly faster for the poor and middle class through camillaosting the 1%'s div growth to 281% over the past 40 years. nejra: that was a look at the wealth inequality in the u.s. looks into special economic inequality in america and how it may play in the november elections commit tonight at medical p.m. in new york on bloomberg tv. let's get the business flash now. >> hi.

boeing is pulling the plug on at 747 jumbo jet, ending production after half a century run for the airplane. the decision has not been reported, but sources tell us it can be worked out from the changes in their financial statements. despite their popularity with travelers, the final version of the 747 never caught on commercially. citigroup will bring more than 40% of their workers back to the office until a vaccine is available. they have started to bring a small percentage of staff back. they have run into consistent problems, employees hesitant to use as subways and buses to get to work. the firm has around 200,000 employees globally. elon musk is taunting the securities and exchanges commission once again, commenting on his twitter about tesla's surging share price, you

started joking about short-sellers, then referred to the regulator as the short seller enrichment commission, a phrase he started using in 2018 after they sued him for securities fraud. that ended in a settlement agreement. that is your bloomberg business flash. nejra: thank you. we are seeing risk a sentiment turned sour, european equities edging into the red, u.s. futures are pointing lower. the stock and bond market, cash trade closed today. happy independence day to those watching in the u.s. the nasdaq outperforming at a record. we will discuss that and more in the next hour. up, sebastien galy. this is bloomberg. ♪ it's pretty inspiring the way families

redefined the word 'school' this year. it's why, at xfinity, we're committed to helping kids keep learning through the summer. and help college students studying at home stay connected through our university program. we're providing affordable internet access to low income families through our internet essentials program. and this summer, xfinity is creating a virtual summer camp

for kids at home- all on xfinity x1. we're committed to helping all families stay connected. learn more at xfinity.com/education. ♪ nejra: u.s. jobs figures surprised to the upside, but

jobless claims show that weakness persists. and the coronavirus is accelerating in america. case closed, german lawmakers back the ecb's qe program, ending a standoff between the central bank and the nation's top court. boris johnson will tell citizens to act responsibly as restaurants and pubs to reopen tomorrow. this is "bloomberg surveillance." happy independence day in the u.s. bond marketsck and are closed in america. sentiment going to the downside in europe. now let's get first word news. >> hi. the french prime minister has redesigned according to a statement from the palace. it comes as the president is hoping to revamp his presidency, including a new top team.