millions of americans are furloughed, and they may become laid off or fired. it is a grim actor. the jobless report is at 830. vice president biden will travel to his scranton, pennsylvania. he pictures a path to victory. he says no to the hard left and will offer "an incremental path," to economic prosperity. you know the story and drill. tocks surge, gold surges 1800 and ounce. -- 1820 an ounce. china will provide -- united k will abide stimulus. trump and biden will provide stimulus. good morning, everyone. tom keene in new york, francine lacqua in london. thrilled you are with us. everyone is really talking, and this goes back to the chancellor's speech yesterday and what we will hear from biden

today about a labor picture. and the shift from a pandemic and furloughed over to a real question about job layoffs. francine: yeah. i think this is the time. in the u.k., we had the many budget yesterday that gives a little more support to workers. if you look at most of the furlough schemes in the u.k. and what is happening in the u.s., you can assume some of the money would run out by the end of the summer. this is the exact time to look at the permanent shift to the labor economy and what did come in two to three years. tom: we have a terrific our for you. we will talk to our guest about mr. buffett, mergers, and acquisitions. we acquired the first word news in new york city. ritika: joe biden will call for a moderate approach toward reviving the u.s. economy today.

in his speech in pennsylvania, the democratic nominee will stay away from more ambitious proposals pushed by progressives. he plans covers several areas including a push to buy american and incentivize american jobs. the u.s. has set another record for coronavirus cases according to the new york times. more than 59,000 cases were reported yesterday. california and texas accounted for 20,000 of them. the rates of positive tests in california has jumped to more than 7%. gavin newsom warned it could spike into double digits. sealed anresident has unlikely partnership with president trump. in his visit to the white house, he offered for more north american trade integration and hail president trump for his "kindness and respect."

it was a record-setting first half of the year for hedge funds, and not in a good way according to hedge research. any asset-weighted basis. none of the four major strategies made money and driven funds for the worst performers. global news, 24 hours a day, on air and on quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. francine: thanks -- tom: thank you so much. equities, bonds, currencies, commodities. flat right now. nasdaq right now showing strength. it will be amazing to see where we are in two hours. yield is not part of the story. -- francine?

francine: i wish we could spend a bit of time looking at the shanghai composite in general. there has been a lot going on in the last few days. chinese equities outperforming. buy signals of support but strong demand by traders. gold, i know we talked about it yesterday, today, holding above 1800 per ounce. european stocks are snapping this losing streak. tom: right now, we would like to go to the system. the deepest part of the system is foreign-exchange. it's where you measure the markets, gauge the correlations to other asset classes. dmp, claimedhat at for their mathematical acuity, particularly in derivatives. we are thrilled that david katzive can join us.

what is the signal of stronger yuan and a relatively resilient u.s. dollar? what is that signal, giving all of the stimulus out there? david: good morning. i think that's a good question. the stronger yuan that you have been talking about, these are signals of vulnerability and they are starting to pileup. we saw a big move in lower in dollar rates, a collapse in u.s. real rates this year -- this month, and to us, it seems like the dollar is on the brink of a potentially big adjustment lower versus the core currencies. tom: i've got to go right to the idea of making money here. how do you play a weaker dollar? which pair is more advocate just? -- advocatious? and usd.llar-yen

at these been held levels, dollar has been strong or a couple years because rates have been high and there has been a willingness to hold dollar exposure. for dollarsons strength are beginning to evaporate or have evaporated. we think there is pretty big vulnerability in the main pairs. francine: good morning from london. what is the reader cross for gold? i don't know whether it is signaling something we should be looking at or if is symptomatic of -- it is symptomatic of what we are looking at. david: i think it is signaling something, telling us the dollar vulnerability in gold will do well in an environment where rates are low, where there is uncertainty on geopolitical front, on the monetary growth front, all of these things people look at pointing them toward stronger gold. gold also does well during periods of dollar weakness, so to us, it could be an indicator that the dollar -- the beginning

of the adjustment a lot of us have been waiting for. g10 fx has been remarkably stable considering the adjustments in the global economy in the last six to 12 months. seeing in some of these other places like gold that there are macro things appening, which could be signal something big will happen at the g10 fx as well. francine: i was going to ask you, as head of -- head of strategy, do you have to have -- david: for us, a lot of the gold moves they have been looking for have already happened. -- that isconsistent consistent with our expectation. we think gold will come off a little bit in q4 as the dollar is beginning to weaken more steadily versus g10 currencies. gold has kind of moved and fx needs to catch up.

old might lose ground versus some of the g10 currencies. tom: david katzive, what is the actual mechanism or thing that will cause dollar weakness? --arshall differential basis on a parshall differential basis, there has to be one thing that forces the move -- partial differential basis, there has to be one thing that focuses the move. david: to me, the main drivers of weaker dollar is already in place. we may be surprised that we see dollar weakness become a driver for other things. and fx, we are looking at rate differentials, commodities to tell us where fx will go. begins a big adjustment lower, this will happen in the second half of the year, we may find other markets say why is my market moving? it is because of the dollar. tom: but this is critical, david katzive. i understand what you said, but can you do it at the zero

balance? can you make a study of interest rate dynamics and bring it over to an eye fx call -- bring it over to any fx call with lower rates? david: when nominal rates get movered and zero and don't around much, their explanatory power for fx collapses as well. tom: yeah. david: we think the explanatory power of real rates can rise at that point. nominal rates don't move but as inflation expectations go up in the u.s., you can see u.s. real rates come down quickly. that creates the dynamic where good news in the u.s. seems excess at reflecting the economy. the dollar starts to get in this -- forws for the yor the u.s. economy means bad news for the global economy. francine: what is going on offshore yuan? , its strongest

since mid-march. how does that translate into your expectations are dollar? david: i think it is consistent with the pattern abroad dollar weakness. there was a period a few months ago where it seemed u.s.-china tensions might push dollar china sharply higher. people were talking about levels like 720 breaking. itthat had happened, could have fed back into an adjustment higher in the dollar. people thought it was engineered weaker, and you could see pressure on the dollar broadly. that has not happens, and i think we see dollar be traded like more dollar payers. tom: that was beautifully explained. david katzive on real yield dynamics. we will continue with david katzive. looking forward to jon ferro's conversation with michael wilson of morgan stanley i believe in the 9:00 hour.

morgan stanley has been lights out on market moves, negative, and very positive in the recent months. stay with us. from london. this is bloomberg. ♪

francine: this is "bloomberg surveillance" comment francine from london and new york. we were talking about dollar. let's get back to your exchange with david katzive, head of fx strategy for known for america. daniel, thank you for staying with us. when you look at euro, i don't know whether euro at the moment seems to be fairly valued but there is a lot of political risk, brexit, you don't know whether this recovery fund will get through because of the frugal countries, and it seems

this could be a make or break point for europe again. david: i think you're right. there is political risk with respect to the euro. the point we make from any fx perspective is that whatever europe does does not have to be -- it is not going to be perfect. they are probably not going to deliver a recovery plan that ticks everyone's boxes and is conducive to the kind of framework a lot of people want to see. you just have to be good enough. you need to avoid systemic stress in europe. as long as you see peripheral bond spreads tightening, you don't see any concerns about ability to find at auction, things like that, the concerns we saw in 2010-2011. the longer those remain at bay, and it seems to us what europe will deliver will be sufficient for that, the dollar is the driver. euro-dollar can move up from what we think are pretty

depressed levels. a few months ago, it seemed like systemic problems would keep the euro anchored. it now seems like europe will do a sufficient amount to keep the systemic concerns at bay. francine: where do you see the most value, depending on where it is now? i don't know if there is a currency that is particularly volatile or you think is not fairly valued at the moment. david: in g10, it is euro, ust, and dollar-yen was the biggest move -- usd, and dollar-yen was the biggest move. dollar-yen in particular has been incredibly stable and has not moved, even during periods of big swings of equity markets has not moved nearly as much as we have gotten used to seeing it over historical times. to us, there is a big exposure that could be hedged, could

create a momentum move lower in dollar-yen. we watch that pair closely. it has not happened yet, but that is one if you see momentum build, it could be a snowball effect for dollar-yen falling back to 100 quickly. tom: this has been the great miss call. to be clear, on dollar yen, if you go from 107 to 100, that is a stronger japanese yen. i get the idea that everyone is looking for stronger yen, but it has not happened. watch will be the mechanism to make the big shift to a truly stronger yen? even over four to five years to ¥95. how will that happen? david: that's a great question. the main challenge to the weak dollar thesis, if it was going to happen, why has it not happened? it is hard to argue against that. it is observationally true. with dollar-yen, the market was looking for the wrong catalyst for a long time. people were looking for risk

aversion episode, a big move lower in equities, a spike in equity volatility to create the spark which leads dollar-yen lower. not -- i think that has not really worked out. the real route to a sustainably lower dollar-yen is the dollar route. you could wind up in a period with u.s. real yields falling, staying exposed to dollars us do -- dollars is too attractive. with rate differentials being tight, you can start to see this hedging process and the dollar begins to fall during periods where equities are going up. that would create this snowball effect. tom: david katzive, is a weak dollar good for america? david: yeah. i mean, i think the dollar is

on the expensive side of the equilibrium. there should be some negative for u.s. growth associated with that if you erased some of that. -- that. if you erased some of that, it would probably be net positive. the kind of moves we are looking for, likely in fx, are really not big enough to move the needle too much in terms of u.s. growth. the u.s. does not have a huge external sector, so unless you get a really big move in the dollar, and even bears like us are not looking for a really big move, it will probably not be something that moves the needle all that much. francine: what do you do with brexit and pound? david: this is a huge month for brexit, as you know. we think the most likely scenario out of this month is that there will be some kind of deal which allows the pound to retain some of the gains it has made and extend some of the gains versus an otherwise strong

euro. these scenario, in negotiations, if they are not successful, the pound could reverse the upside we have seen quickly. it is quite binary. it makes it very difficult for investors to manage risk. overall, when you look at emerging markets, how difficult is it to make a difference because of structural reforms, or does it just depend on how they deal with the pandemic and covid-19? david: i think the bigger challenge for emerging markets is that we are looking at a less globalized world, and when we come out of the pandemic, whenever that is, hopefully soon, the world will not go back to the same framework we saw over the past 30 to 40 years area we are him -- 30-40 years.

we are moving in a less , accelerated by these developments. a lot of these frameworks people have used in the past may not work as well. i think that is the big talents, that we have turned a corner from ag -- from a geopolitical standpoint and no one knows quite what the parameters will look like, regardless of what happens with the virus, regardless of who the next u.s. president is. we don't know what world we are heading into. otherwise, valuations look attractive. currencies are cheap, really you look slow, dollar looks vulnerable, liquidity out of the central banks, all of these things in the old world point you toward a big recovery in e.m. tom: dan, this has been outstanding. david katzive, thank you so much this morning. you can see the entire interview on bloomberg digital in a bit.

coming up, much more to talk about. i want to bring to your attention, a former dean of columbia business school, a in thegood discussion 12:00 hour with the gentleman from florida. this is bloomberg. ♪

ritika: this is "bloomberg surveillance." let's get the bloomberg business flash. elon musk predicts tesla may

crack the full autonomy puzzle this year. electric car maker is close to developing self driving vehicles. tesla is in a race with alphabets, gm, and others to develop the first 100% driverless car. sales have started to recover at europe's largest tech company. better's sap reported than expected preliminary results for second-quarter revenue. 21%, cloud revenue jumped boosted by assumption of software deals in asia. u.s. companies slashed dividends in the second quarter at the fastest pace since 2009, according to dow jones shareholders. the pace of the cuts appears to have slowed down. that is your bloomberg business flash. francine: thank you, riddick. -- ritika gupta. first, we look at gold since the huge increase we saw the last couple of days. --also look at for nimby

rename be. havei think we better-than-expected figures from sap that gave a boost to technology stocks in europe as well. tom: you see technology do better here as well. the nasdaq 100, green on the screen. coming up, without question, your must listen conversation on mergers and acquisitions. william janeway will join us. this is bloomberg. ♪ good morning. ♪ you doing okay?

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transfer your service online in a few easy steps. now that's simple, easy, awesome. transfer your service in minutes, making moving with xfinity a breeze. visit xfinity.com/moving today. tom: "bloomberg surveillance" from new york and london. we welcome all of you today. without question, our conversation on the day of state

of globalization in the state of all of that money out there -- and the state of all of that money out there. call it mergers and acquisitions. william janeway is joining us. his book was definitive a number of years ago, but far more is his high technology and innovation study across all of his career always associated with [inaudible] it has been way too long. thank you for joining us. you have just written an essay on the death of globalization. how dead is globalization? william: i called at the retreat from globalization because it is a working process. -- work in process. of it has, different rates speed. the impact of the financial crisis had a major impact with things that knew they were global in their business, finding out they were local in their need for support for their own national -- that was the first real extreme

thent, but similarly, in impact of the pandemic, the multinational corporations developed extraordinarily extended supply chains, discovering they had to turn to local governments, national governments for support, for bailouts, when the crisis disrupted those supply chains and ability to deliver goods and pay for them, and meet their obligations. globalupside, what was on the upside turned out to be national on the downside -- what was global on the upside turned out to be national on the downside. you see mr. buffett taking out the midstream pipelines of dominion the other day. where is all of that money going to end up? what does apple do with their money? what does google and microsoft do with their money? what does carlyle group or any other server and all of them,

where does all of that money and up? -- end up? glenn: the cash flow -- william: the cash flow surplus did not begin with the pandemic. it was particularly from the was supposed which to stimulate investment in the fundamentals of economy. instead, it financed and -- an and norma surge that was already -- goneif that funding had into national, individual, corporate investments, which mostly it did not, it would not have done the work that is truly u.s. economy, not just building infrastructure that for the last 30 years has

been crumbling away right across the country. but transforming that infrastructure into much lower basis, much lower green for economic growth in the future. this is a huge opportunity, and it is tragic. a friend of yours as well as mine wrote another project syndicate article that american exceptionalism looks like the distinctive ability to screw up response to the pandemic, but also, the u.s. is exceptional in its national government, in denial over the reality of climate change and the enormous opportunity it represents to invest productively in creating jobs and bringing the country back together. that's an opportunity for the next administration. francine: bill, you talk about the retreat from globalization.

even if there is a new team in charge of the white house come november, how difficult is it going to be to reengage with globalization like it was in peak 2013-2014? william: i think the way to think about this is that multinational -- the multinational corporations that constructed those supply chains were animated by the drive to reduce costs to the minimum. that thea great line financial times used, that we moved it to a just in time economy and gave up the sense of needing insurance backups, second sources, just in case the supply chain management policy. just as theill see, banks did as a whole, greater reserves to protect themselves from financial embarrassment. corporations are going to have invest in resilience and

robustness, which were would do's profitability -- which will reduce profitability. i think it is inevitable as management comes to grips with how vulnerable their operation turned out to be. look at trade,u technology, the economy, and finance, where will the most radical changes come from? william: i think one of the opportunities here, as we began this conversation john was saying merger and acquisitions are the big subjects of the day. the fact is we have been living for 25 years essentially without any competition policy in the u.s.. to a concentration in the tech industry of an extraordinary extent. not easy to forget it was

just the u.s. defense department and our pie that was responsible for making the you -- and darpa that was responsible for making the u.s. -- it forced at&t to license the fundamental technology to the world and forced ibm to create an independent software industry, allowing the digital facebook, to microsoft, and back again, to sweep up any possible challenger to their extraordinarily monopoly positions in the market. it has been a great failure of public policy. i think the debate over that is active, real, and will lead to change going forward. william janeway, u.n. your family have been definitive in the linkage of princeton university to cambridge.

your commitment to that dialogue has been noted across all of economics. tell me what you see now is the reigning theory forward in economics at those two institutions. do we have to radically adapt to adjust our theories out of the financial crisis and coming out of this shock, this pandemic. william: i think it's clear we must. theory,nant economic into the financial crisis, assumed the aggregate economic performance of an economy and world economy was the result of the optimizing utility maximizing behavior of a rational representative agent who understood all of the consequences of her action and could adjust those actions in order to get the best possible world. that blew up thoroughly in 2008. what we see now across the board

is the construction of a new what are called micro-foundations, more economics generally, which reflect the revolution of behavioral economics, which reflect the fact that we have many people with different characteristics with different amount of wealth, different degrees of risk aversion, live in different networks, behave differently, and even when they are doing the best they can for themselves, they can produce what we call a coordination failure. that is what happened in 2008, and the most interesting economic statistic of the , before is the way that there were any lockdowns, anti-lockdown's, consumer demand , consumer purchasing fell off. people moved to protect themselves and produce a slowdown in demand, even before the lockdown killed supply. that is fascinating.

you can't account for that in the old theory. it needs the new economic that is coming up globally. , we will do janeway this again soon. right now in new york city, our first word news. here is ritika gupta. ritika: the number of coronavirus infections worldwide has gone over 12 million, and many of those have been in the u.s. the u.s. at another record yesterday with more than 59,000. texas and california accounted for almost 40% of them. the supreme court is expected to rule on president trump's tax records, whether congress and the manhattan district attorney can see tax returns and other financial documents the president has fought to keep private. the president has lost every step at the records have not been turned over, pending a final court ruling. china's top diplomat blasted u.s. policy toward beijing.

the foreign minister accused the trump administration of being driven by "mccarthy style paranoia." he proposed a blueprint to getting relations between the two biggest economies back on track. he also called for cooperation on the coronavirus. isjamin netanyahu consolidating powers as he tries to rein in a second coronavirus outbreak. parliament has given his cabinet the power to curb the disease, and the domestic security agency has been given the authority to resume contact tracing. not in yahoo! says this requires extraordinary steps. his critics say he is undermining democracy. global news, 24 hours a day, on air and on quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. francine: thank you so much. oner today on conversation

covid-19 and masks, new jersey governor phil murphy joins us at 5:00 p.m. in new york, 10:00 p.m. in london. this is after new jersey has required face masks i believe to to curb theoor spread of covid-19. eve don't want to miss that interview coming up later. this is bloomberg. ♪ this is bloomberg. ♪

tom: good morning, everyone. "bloomberg surveillance." angst for being with us. the bullet -- thank you for being with us. the political front is not about the president, it is about the vice president, vice president biden. the line they are using as he

comes out of the basement to give a really important speech. jared bernstein advising vice president biden about an economic speech in scranton, pennsylvania. jack fitzpatrick joins us now for a briefing. what will be the goal for the vice president, jack? plan to will lay out a respond economically to the coronavirus, that in some ways you could describe as moderate, but in some ways, aggressive. leeway, orlot of whoever the president will be after after the election will have a lot of leeway to keep spending money, to try to rebuild the economy, but this will not be focused on some of the more progressive stuff you have heard from other democratic candidates. tom: come on. jack: it won't be like a medicare for all, green new deal kind of thing. it will be about incentivizing american jobs. clean energy, things he wants to talk about, childcare, that kind

of thing. tom: well said. that's what, he is running down the middle because he has to take pennsylvania in the election or he is toast. how upset is elizabeth warren? how upset is the senator from vermont? jack: he has this task force working with bernie sanders to try to come up with a middle ground, a venn diagram of the issue they care about. obviously, biden is not going to turn into bernie sanders, but there seems to be cooperation there. honest, probably everybody agrees with you, he needs pennsylvania. in the polls we have seen so far, there are a lot of pathways forward provide an -- forward for biden and few pathways forward for trump. i think he is simultaneously

trying to take a pragmatic approach, but he is not ignoring in the name of center is him the the votersenterism at preferred sanders, warren, or those types. francine: how important is the pickup vice president? does it need someone who rallies the troops or someone from one states he needs to win? jack: what we've heard from him is that he wants to pick a woman of color. that is kind of the specific area that he pointed to, which is not surprising, especially with the focus now on civil rights issues and leasing. -- and policing. i don't think the state the future vp picks for him is necessarily pivotal. i think there's going to be some ideological agreement. maybe playingis

both sides in somewhat of a centrist approach but not abandoning progressives. i think that is still an x factor as long as there is more diversity on the tickets, and it is someone who personally can work with. francine: jack, thank you for the update. jack fitzpatrick, a bloomberg government reporter. up next, a johns hopkins professor of nursing. we try covid-19, looking at the number of deaths and infections are us the world. this is bloomberg. ♪

ritika: this is "bloomberg surveillance," i'm ritika gupta. let's get the bloomberg business flash. bed, bath & beyond plans to close 20% of its stores over the next two years. thanetailer operates more 950 locations in the u.s. and canada. like many retailers, they have tried to scale down increasing e-commerce business and negotiate with landlords. in the latest9% quarter. the drought has gotten worse.

the european plane maker failed to get orders. airbus plans to cut 15,000 jobs at its jet lining unit. the company lowered its bill rate by one third in april. warren buffett is dropping down the ranks of the world's richest. his fortune puts him in place on the bloomberg billionaires list, the lowest he has been since the index started. you can blame his generosity and parts. he gave away almost $3 billion in birth of -- $3 billion of birth sure hathaway stock this hathaway stockre this week. global news, 24 hours a day, on air and on quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. francine: bloomberg has developed a leading partnership with the authority on covid-19. john hopkins has been the forefront of the international response and every day will bring you insights from infectious disease and emergency preparedness. joining us today from john hopkins is professor of nursing,

jason farley. thank you for joining us. first, we are collecting data to see who has had antibodies. does it tell it's only who has had the virus? what have we learned of the percentage of the population that has had the virus and possibly now? just cameent data out from six to 10 different state and local regions area -- regions. it uses the blood supply. if you have had blood obtained for any particular reason in a commercial lab in those regions, they took samples used for other test and tested them antibodies. what they found was that the increase, actual prevalence of antibody positivity was between six and 24 times higher than current estimates.

just really large estimates of population penetration of the virus. means to be determined -- means is to be determined. we don't know how many people might have tested false positive, although we think it is a smaller proportion. there are people who contest false positive for antibodies, so it is a really important data point. it really tells us that we are missing still a lot of cases in the community. francine: jason, infection between six to 24 times higher rates. what does that give us? 10% of the population could have already had covid-19? jason: most estimates are generally less than 5%. when you look at the numbers, you are showing upwards of 10% in some localities. it is really critical people continue all of the nonfarm illogical interventions.

and understand a fairly large number of people in the geographic region have been exposed to the virus. francine: another repercussion because of covid-19 is that the student and exchange visitor program in the u.s. has been modified. people that had a visa but are now on online courses have been asked to maybe go back to the countries where they were initially from. does that mean this is being used as an immigration policy? jason: it is certainly putting whichints on the ways in colleges and universities across the country can flex our programs for the fall. we had restrictions for the f-1 visa program, the visa program that allows foreign nationals to study in the united states, but

to loosened in the spring semester through the summer. we have now received word that is not going to be the case for the fall, suggesting anyone on their visa, for academic purposes, must attend face-to-face classes. they can attend at most one class fully online, which really hampers our ability to think about the ways in which we plan for the fall semester. in other words, faculty, students, staff on f-1 visas, the students in particular, must be in a classroom base, face-to-face, not online. it does put universities in a aboute when we think ways we can offer education to those students. francine: jason, thank you for your time. jason farley of johns hopkins. theure to check out bloomberg for the latest information and tune in every day for exclusive conversations with john hopkins experts for an

inside look at battling covid-19. u.s. equity futures are fluctuating. we are getting the american jobs data tomorrow. it could offer insight, a key insight into the world's biggest economy. the dollar, we did have a bit of move. treasuries edging higher, gold holding above 1800 and ounce. for more onoin bloomberg radio and bloomberg tv. this is bloomberg. ♪ ♪

>> the economy is not ready to

be taken off the ventilator here. >> it's got to be the real economy that performs. otherwise, none of these companies will be able to make it through to 2021. >> what are the global tensions going on? right now, the biggest is the war between china and u.s. for global positioning. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: good morning, good morning. this is "bloomberg surveillance ." we are live on bloomberg tv and radio. alongside tom keene, together with lisa abramowicz, i'm jonathan ferro. in 90 minutes, jobless claims and america speaking to the pain in the labor market. later, former vice president joe biden going to pennsylvania to tell us why he is best placed to deliver the recovery t