>> fiscal stimulus gives us that shot in the arm and buys us time to get there. >> the next part of the v may flatten out a bit because then you reach some social and psychological issues about people's confidence, and that i think will take some time to recover. >> we talk about a correction. at this point we are talking about a normal amount of turbulence in the equity market, which would be about a 10% correction. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. an interesting "bloomberg

surveillance" today on television, on radio. we welcome all of you worldwide, across this nation, where the linkage, the urgency that we see within our politics and our economics is truly front and center. get out the calendar. i believe it is 23 july, and this is a nation staggering to the first week of august. jonathan: what urgency? it is sunshine and rainbows in the equity market. in washington, d.c., we haven't seen the urgency we actually need. there are a lot of people still out of work. this market is in a lot of pain, and it is not going to heal as quickly as we needed to. in about 30 minutes, initial jobless claims set to come in at around 1.3 million again. we need to see much bigger improvement. tom: that will be a key statistic of the week. rule number one in the equity market is follow bonds. i continue to see yield compression, lower yields and flatter curves. jonathan: sunshine and rainbows

--lisa: sunshine and rainbows very much funded by real yield that is negative by the most since 2012. it is -0.90% yesterday. there's a question how long this compression can go on. greg pierce yesterday was talking about how it could go on for longer. junk bonds set to hit a new record low. greg peters with pgim, that is a portfolio management field, may be a longer-term institutional money feel. futures up nine, not quite with the optimism of an hour or so ago, but the vix, 23.96, says it all. $1873 on gold, as you begin to look at $2000 an ounce.

jon ferro, that is a reason for you to bring in our next guest, who looks not only at the nominal yield, but always at the real yield. jonathan: thank you for the honor, tom. lale topcuoglo joins us now, johcm portfolio manager. the pain trade in europe for quite a while was the ecb going guns blazing. yields and spreads became tighter, tighter, even though the economy didn't improve that much. are we seeing the same dynamic play out stateside? lale: good morning. you certainly are. i think you sort of set it up well. a look at the negative yielding assets, it is on the growth again. we are steadily rising, and the income grab is desperate. look at the dividend yielding stocks. look at high-yield, as you just highlighted, and em. people are chasing down assets, which is a very dangerous game to play.

one less thing i will leave you with is you highlight the central banks. ecb and bank of england have been buying since 2016. that did not prevent spreads blowing out in march. markets, you have to respect what the market is telling you, but it doesn't mean you can't disagree. ask i have been dying to you this question, which is simple. what is your estimate of what issuance does here forward? this market is so odd, some would say artificial. how do ceos, cfos, and government officials react? lale: it is certainly artificial when you have an indiscriminate thee buyer, which are central banks, that will buy regardless of what is happening. there's no analysis being done. if you are company, liquidity is paramount. i think everybody is right now focused on that.

the most common question i get is will this company go bankrupt in the next year. that is not always the right question to ask. it is one of the questions to ask, but it is not always the right question because, especially as you get to the leverage, they will issue to basically plug the gap being posed by the crisis. but you have to be able to see the white at the end of the tunnel. otherwise you are bridging to nowhere, and the second leg be distressed exchanges, which in the land of no covenants, that is where that will come. lisa: when do we move into a time where fundamentals matter, even though you have a price in the fed,buyer the ecb, the boj? lale: it will take time. right now, if you look at q2 earnings, numbers are better-than-expected, but i think the companies are hoping this is a temporary lit.

they are all talking about cost cuts and reduced expenditures. real number, the other -- remember, the other side of that is lost income for somebody else. maybe it takes six months. maybe it takes 12 months. but there's a chance that the economy ends up being a lot slower recovery than people expect. tom: that's right where i wanted to go. you are not doing the macroeconomic dance, but nevertheless it is part of the call. are we doing nothing more than extending out any kind of economic covering -- economic recovery? if you look ate: the initial claims, that is what it suggests. the numbers are staggering, and it is way worse than what you saw in 2008, 2009. the economy is telling you that the recovery is going to take a little while, but the financial conditions are easy. benefiting thes

investors at this point, but it is not benefiting the main street. at the end of the day, i go to this central metric. it is a zero-sum game. bills have to be paid, debt has to be restructured. tom: how does the revenue shortfall affect debt? coca-cola down 20%, and many others. what does it do to your world? leverage, that is difficult. i think if you look at -- you have to differentiate between the better capitalized investment grade coca-cola versus the high-yield in the leveraged universe. there's a reason why companies go high-yield. the carry a lot of leverage. they are smaller. they don't have the competitive advantage and they don't generate much free cash file. soap -- free cash flow. so when you have a gap in funding, it affects your ability to pay down debt. interest costs are low. people looking at interest

coverage are looking at the wrong metric. it tells you you are kicking the problem a little further down the road. eventually business models come to a halt. otherwise, we wouldn't have any other defaults. lale: what is the fraud --lisa: iest parthe fraud- right now? lale: if you look at the performance that has come through these recovery plays as the economy opens, for leveraged universe, i think that is a challenge. there's aensives, lot of chasing and hiding out happening. bonds are trading above full prices. investment grade on the front end, it is getting a little frothy. it definitely feels a little frothy. lisa: greg peters of pgim yesterday said there was still terrific opportunity within credit, talking about credit spreads collapsing going forward. a lot of people think this is the case, based on the fed

backstop. where do you see possible opportunity, given what you're talking about was fundamentals may be mattering again? credit is all about avoiding the pitfalls, so the number one thing you can do for your client is avoid the ones that are not going to make it through this crisis. the negative skew can be absolutely brutal. number two is we are looking for what i would call second derivative plays. issued debt,t have but the capture is investment grade rated where there is a pull-through effect. that trade is running its course as well. you look ataybe dividend paying equities because you may have visibility on that cash flow. oa.: wh lale: i know. [laughter] if you are comfortable and that dividend stream, there's a price

you should pay as opposed to taking a duration risk in the credit market. jonathan: why did you save this for the end of the interview? lisa: seriously. [laughter] jonathan: you know i am going to invite you back. it is always great to have you. you are stunned, tom. tom: look at the procter & gamble dividend, and the world stops. it is puny compared to lale. who cares what the stock did? talkingnd people dividend growth, that tells you something about the times. jonathan: your equity market, still up seven points on the s&p 500, up 0.2%. headline in the u.k., review and develop into aid to china. this coming from the prime minister's spokesperson. about 70 million sterling, not a huge amount, but there's a lot of aid that goes from the u.k. to the rest of the world. the budget has been cut to about 15 billion sterling annually.

these are the kind of things i don't think the electric in the u.k. really quite understand -- the electorate in the u.k. really quite understand. they are thinking, why did we send money to china? that is what is playing out in the west. why are we sending money to china when china is subsidizing companies to compete with hours? we were in chengdu visiting the consulate this morning, and then there is wuhan, but i have to tilt to hong kong and the substantial consulates there for america and the united kingdom. jonathan: we are on consulate watch. next?one gets shut this is "bloomberg surveillance ." the s&p 500 up zero point percent. -- up 0.2%. 6 basis points on the 10 year. up next on the program, we catch

up with shannon cross of cross research. a ton of earnings coming in after the close yesterday. tesla and microsoft a big focus going into month-end. we will hear from apple, facebook, and amazon. this is bloomberg. ritika: with the first word news, i'm ritika gupta. thea may retaliate to closing of its consulate in houston by closing the u.s. consulate in hong kong, according to the editor of the chinese communist party newspaper "global times." he writes that the u.s. has over 1000 staffers there, and that means it is obviously a spy center. the editor's comments have frequently been a tip-off to what the government does. it is unlikely that the white house and lawmakers will agree on a broad stimulus bill before benefits expire. millions of americans received the supplemental payments included in the last coronavirus

rescue package. president trump is expanding a federal law enforcement operation to chicago and albuquerque. that sets up a showdown with state and local democratic leaders who denounced the president's federal agents in portland. the presidents has his goal is combating violent crime, seen as an appeal to his conservative base. tesla is paving the way for its soaring stock to join the s&p 500 index. the electric carmaker reported rising earnings for the fourth quarter marrow. still, elon musk thinks tesla isn't growing fast enough. shares have quadrupled since march. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> the most important thing for every company to look at in the period we have just been through has been liquidity.

do we have the cash to survive? jonathan: survival the keyword for a lot of companies and a lot of industries over the last several months. that was ralph schlosstein, evercore cochairman and co-ceo. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your thursday morning price action, 12 minutes away from jobless claims, shaping up as follows. equity futures up 0.25%. we had some weight to the benchmark for the fifth straight session. euro dollar rose over, now $1.1568. at 20.58% -- 10-year to 58%. tom: i'm sorry, the shade that schlosstein was throwing downtown with something.

he really went after goldman sachs. jonathan: we won't characterize it that way. it was interesting for him to say that if i was goldman, i would not be doing this. i'm not sure he was quite going after them. tom: fair. i exaggerate. i am just jealous of his beard. jonathan: you should grow one. i think it would look great. i have seen the vacation beard on you in jamaica. you should go for it. tom: no debate on the success of technology. shannon cross, in tough times for technology, was brave enough to say acquire shares, and someday it will pay off. it has paid off in spades, including microsoft. shannon cross joining us from cross research. i believe it is 130 $6 billion large for microsoft. in this tech boom, what are they going to do with all that cash? shannon: at this point, they are

investing very aggressively in their core business. spending for data centers. you have seen significant growth in their azure and cloud business. if you look at what azure has done, and one quarter on a year-over-year basis, they grew as much as they generated three or four years ago in the total business. so microsoft continues to focus on organic investments, and they have made some smart inorganic investments. github, linkedin. they are clearly not done on that front. tom: there's an understanding that amazon has a retail world they can take out over two, five, 10, 20 years. is at the same for the cloud, and for microsoft and azure, is it the same idea that the cloud just grows and grows? shannon: it does slow. one of the things the covid crisis has shown is that remote

work is something very important. remote learn is something, at least if you have the capabilities. to do that, to a large extent, you need to move to a work cloud -- to do that to a large extent, you need to move to a more cloud-based world. lisa: are they losing this fight for market share? shannon: no, i don't think they are. i think they are extremely well-positioned. amazon was very well-positioned as the new economies, the internet companies, all of that. microsoft, really where cloud is going to drive over the next several years is in the mass market, middle of the country, where microsoft has such a stronghold at this point, given all of these companies have used soft for so long. they are a trusted partner. amazon will continue to do well, microsoft has an extreme position on the cloud chair front.

jonathan: on the last earning calls a couple of quarters ago, same we have seen two years of digital transformation into months. how difficult is it to keep up with what is happening for these companies? shannon: talking with them last night, they are learning a lot from their own experience. their employees are coming back to be office, how flexible. i think it is kind of a brave new world for everybody, but when you think about the building blocks microsoft has put in place over the years, the fact that you can do subscriptions for all of their to bees, but i don't have in the office to set it up, and with one email, i can have access to all the products i need. i can talk to my coworkers on teams, whether it is video or through a chat. i think their platform is something that is really sustainable.

again, one of the things that is important in this world right now is that customers need someone they can really trust and rely on. if you are a customer in the middle of the country, you may not know how to embrace cloud, but you need your tech partner to do it. jonathan: on a call with the pepsico cfo, totally different industry, he said exactly the same thing about the food and beverage business. that in this pandemic, people went to the brands they know. does that speak to the big get bigger in this environment? shannon: you are definitely seeing that, certainly from a stock perspective. when you have companies that can offer a full breadth of product, microsoft, dell -- i know dell has had some issues -- but there are certain companies where their customers trust them. i mean,trust -- everything is so uncertain right now. you want to feel like you can

trust to her you're working with. that is really -- trust who you are working with. that is really playing out through this pandemic. jonathan: if you want companies with solid revenues come of the struggle people are having on wall street is what they should pay for those earnings. how do you come to that kind of decision, that calculation? shannon: it is very difficult. i tend to be very much a value bent person. some of these multiples seem a bit stretched for me. but when you think about the company's that can generate recurring cash flow, if you trust with the management does with the cash flow, i think people are looking at it as who is going to be there in five years. to some extent, there's less playing the next quarter or the next two quarters. customers are really looking at where we are going to be in two years. jonathan: really thoughtful stuff. shannon cross, cross research co-founder.

reliable revenue growth, a management team you trust. what is the premium on all of that? this goes back to what we talked about over the last couple of hours, the deeply negative real yields in america, pushing you out to dependable cash flow. tom: it becomes almost monopoly characteristics. it comes down to the revenue and. . all of that when you sum up the -- the revenue and all of that. the accounts,p does that continue to go on? does that look like the standard oil company of a few years ago? amazon, apple, facebook earnings on deck for the end of july. coming up, the initial jobless claims in july. your estimate, 1.3 million. fromreakdown comes

bloomberg's michael mckee and former new york fed president bill dudley. looking forward to that conversation on the data and some interesting pix for the federal reserve. that is next, right here on "bloomberg surveillance." ♪

jonathan: from new york city, this is "bloomberg surveillance." we are live on bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. just seconds away from jobless claims in america. let's bring in michael mckee with more. michael: everybody was watching to see if the bike in covid cases would have an impact. it has. claims,er of initial 1,416,000, an increase of 109,000 from the number last week. forexpectation was 1,300,000. the street is paying attention to the continuing claims number to see if that is making any difference. that has gone down. it is a decrease of 1.1 million.

however, there are two things we have to keep in mind. the weekly jobless claims numbers are a week old, and the continuing claim numbers are two weeks old. weekly continuing claim numbers do not include the extra money, the pandemic emergency money for those who are self-employed or gig workers. thater 975,000 people got last week as initial claims. you are looking at almost 2 million people getting initial jobless claims. the number that matters, especially with the negotiations in washington is how many people in total. 31 million 802,000. that is a slight increase from 32 million last week -- a slight decrease from last week, but does show you there a lot of people getting those $600 checks and will be affected if those stopped coming at the end of the

month. the rowing of the v starting to break. that is what many people might expect. that is what is playing out before our eyes. jobless claims rising for the first time since march. is that what you are expecting, that this data is about to start rolling over? michael: it does look that way. one of the important things about today's number is it represents last week, the week the july payroll survey was taken. it does put downward pressure on estimates for what might happen in july in terms of payrolls. track howwatches to the economy is doing. quicklyook at this very . we see immediate curve flattening. estimate the economy will continue to -- michael: we are putting a lot of stock in these contemporaneous numbers. the staleness of the monthly

data does not tell us where we are. when you get a number like this, a big surprise, you will have a reaction in the markets as people start discussing what might happen ahead. greatly appreciate that. with us is william dudley, former president of the new york federal reserve. there 810 topics we could speak william dudley about, but there is only one topic and you have seen it percolate. that is the new governor of the federal reserve system. her name is judy shelton. degree.an education this is a delicate conversation, but let me begin with a blunt question. how does the system deal with the potential governor this uniquely qualified? there been governors in

the past that are outside the mainstream and there are seven will be sevenre governors if waller and shelton are confirmed. they will have a voice. tom: back to another time of a more closed american system, more static economy, to the many people that support judy shelton and that desire, that feeling of another time and place, how do you respond in this time of an open america and an open economy? she has advocated returning to the gold standard, and returning to the gold standard would result in an tremendous increase in the volatility of interest rate.

the fed would have to lower interest rates regardless of what was happening in the real economy. the gold standard is not a good answer for u.s. monetary policy. jonathan: how would you be reacting to the data starting to come through in america. we saw in the high-frequency data, we got a flavor things were starting to stall. now we see it in jobless claims. they are strumming to pick up. i said it looks like the right wing of the v is starting to break. what would that mean for you as a policymaker? the recovering economic activity is flattening out as the shutdowns are recurring and social distancing is increasing. i do not think we will see us back to where we were in march and april, but the recovery will be subdued. the employment rate will stay high for some time, and as a

consequence monetary policy will be on hold. the fed will be looking around for what things they can do to provide additional monetary -- jonathan: what things do you think they could and should do? william: they do not have a lot of great weapons. they will continue with our large-scale asset purchases. they may come forward with more definitive forward guidance in terms of interest rates until the end employment rate falls below a particular level. be -- wefocus should are right at the edge of a huge fiscal cliff with the expiration of the $600 a week unemployment compensation benefits. is not replaced by something significant soon, the economy will be weaker. lisa: jay powell agreeing with you, saying fiscal policy is

necessary, but the fed has control over monetary policy and right now monetary policy is pushing investors into equities. we are looking at futures unchanged or higher on the day ahead of the open, even after these worsening labor statistics. how much should the equity market be engaged in financial conditions for the federal reserve, something to shoot for with higher equity values being a good thing? fediam: i do not think the wants the equity market to go to any level. they want markets to be well-functioning. that is what they achieved. there are people on the federal reserve about how high the equity market -- a couple people talking about financial stability issues. i think the stock market is high because bond yields are low and bond yields are low because monetary policy has been accommodative for a number of years. the extent the fed is

worried about the widening gap between wealthy and poor vigils, how concerned are they -- but are not leaving to a better market given the fact we are seeing a reversal in the claims numbers. william: they are frustrated by the fact they do not have good tools for income inequality. they wish they did. monetary policy is not well-suited for that. it is for congress and the administration to address the fact that the burden of the pandemic is falling disproportionately. tom: bill dudley with us. we welcome all of you on bloomberg radio and bloomberg television. a flip in the market. futures come back, the dollar stronger, and we have to look as we continue with bill dudley, we have to look at the substantial curve flattening. it has broken down. talk to me about the

qe program and the scope for adjusting that to sit at the long end. the front end is already so well anchored. what have you learned coming out of the last crisis? william: the fed has assetscally used their to buy treasuries across the yield curve. the treasury market is well anchored by expectations for several years. shift indicated they will their purchase programs and focus on market function, which is not good. i think that does imply they will buy a greater proportion of longer dated treasuries. forthan: i need a message fiscal policymakers in washington. there is discussion about perhaps allowing the enhanced unemployment benefits to expire, may be to taper them aggressively. maybe that is the best case we can hope for. do you happens, what

expect august and september data to look like? william: i think it will depend more on the course of the pandemic and what social distancing that requires. if there is no extension of unemployment benefits, i think you will see consequences in consumer spending. consumer spending has held up well because household incomes have been supported. areconsequences of what we seeing in the labor market will start to be more important. jonathan: appreciate your time and patience. william dudley, former new york fed president. equity futures are not doing a lot. wayee that in the data, the that people expected, people worried. large upside surprise was on the payrolls report, for so many economists that was not an indication of what was to come. outrisk was we extrapolated that improvement too far, too quickly.

we are learning the recovery is constrained. we are just turning to see it in the data. overemphasize the importance of mapping. i look at moving averages come in the series is beyond elegant of the blight path in the vicinity of where we are. i am not predicting up or down on claims. it is unimaginable to everyone listening, watching, every expert we talk to, that we sustain over one million units per every thursday on claims. it is not in the realm of anyone thinking we sustain at one million claims. datahan: if there is one point that sharpens the focus in washington, d.c., it has to be the labor market. equity new jersey positive five points. tom keene speaking to a flatter yield curve. comes in two basis points. jobless claims in america rising for the first time since march.

will it continue and does this speak to an economy starting to stall? camporeale, jp morgan asset management specialist. this is "bloomberg surveillance." now overhe world has 15 million coronavirus cases. the u.s. and brazil account for half of all infections. deaths, theed 197 most ever in one day. , -- in the u.k., a panel of lawmakers says boris johnson's government had no economic plan for the pandemic. according to the house of commons public accounts committee, the response to the coronavirus was "rushed and reactive." despite it being identified as a top risk for years.

the fight over the chinese consulate in houston shows hardliners now have the upper hand in the trump administration. president trump has rallied a small group advisors led by mike pompeo. as. official say china has history of espionage and intellectual property theft. in an excerpt from a video released today, joe biden sonusses the death of his and president obama. he discussed it in the context of protections provided by obamacare. he wonders what it would be like if insurance ran out and that that could've happened before obamacare. the parent company of mercedes-benz set to make a profit. daimler weathered the industry slumped better than expected. the company is counting on the economy improving and no second wave of the coronavirus. global news 24 hours a day, on

air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> as we going to september, the risks are very much skewed towards a more aggressive fed which compresses yields,

flattens the u.s. curve, and that would be an additional dollar negative dynamic. saravelos ofrge deutsche bank. initial jobless claims rising this march. i will be catching up with priya misra on that. a crucial discussion. are we starting to see the right end of the weighing of the v starting to break down. tom: jonathan ferro will be off to the open. it will be a changed open. this is different where it was it 8:29. we have a second tranche of lower yields off of the statistic. 30 year bonds printing a 1.26. 10-year yield comes in a solid two basis points. the two year has not broken in but there is curve flattening. to bring the conversation forward with real observation of flows is philip camporeale.

we are thrilled he can join us. you have a great statistic of the money walking out of equity, the money walking out of bonds. tell us what flows tell you that. philip: what it says to us is that equities in general are under honed. if you look at the u.s. equity mutual complex, it saw record 72 billion in the second quarter. the really important one part international equity. this is where we think opportunity is. international equity has been insolvent since 2017. it had a record outflows in the second quarter. i cannot impress upon you enough how important that fiscal announcement was this week by europe. it was eight years in the making. it was july 26, 2012 when mario draghi said we will do whatever it takes to preserve the euro.

lisa: it has been an amazing moment. this has been a pivotal moment for the euro region and we are seeing this with respect to the dollar breaking down versus the euro. the euro gaining strength. how much is your international equity call a call on a weaker dollar? philip: that is part of it. similar to 2017. that is the last year the morgan stanley all country world index outperform the u.s.. since then it has been a one-way u.s. trade. you need dollar weakness. you also need a catalyst. the catalyst is that not only is baseball starting tonight, but we think we are in the early innings of a new business cycle. it is rare. we are seeing the largest percent of countries with an increase in their pmi since 2009. lisa: hold on. that does not necessarily mean a change in the business cycle,

the start of a new upward tilt. it could just be what base are we coming off of. this has been a historic moment where the entire world shut down based on the pandemic doesn't that factor in? philip: the base case is policymakers are not only willing to avoid the scenario, but they have the ability to do it. a powerful combination of monetary and fiscal policy. why chariman powell is saying we are not thinking about raising rates. it is because we believe will be a 10%. a very slow improvement next year. that is the bottom line. thethan: the bottom -- tom: bottom line with philip camporeale jp morgan. we welcome all of you on bloomberg radio and bloomberg television. futures green on the screen. futures do an abrupt reversal.

dow futures -33. even the vix with a 23 handle. 24.52. two year breaks to a slightly lower yield. , two basis points. the 30 year bond in three basis points. as i begin inr your note of the flows that are out there. it is an unloved market. is tech unloved? philip: tech is probably the most love. tech became not only way to get upside in the equity market, but became a defensive. any kind of headline use on negative on the virus, tech was off. unloved,ot say tech is but if you look at the price-to-book of the russell 2000 versus the s&p, it is only

cheaper 3% of the timer or last 20 years. is trading at high levels. we think there are plenty of places which is a value story where that rotation will happen. tom: this has been very valuable. morgan withreale jp great data on this unloved market. futures flat. on the debt start we had secretary of treasury speaking. we had larry kudlow speaking. they do not want to speak to us today given these challenges that are out there. one of them from the secretary was the challenge of getting republicans on board. lisa: that does seem to be moving forward with some sort of stopgap measure. that is the worry, the concern you have a fiscal cliff and will we just get another fiscal cliff when they finish coming up with a temporary enhanced unemployment benefit extension.

in talking about the death star we have steven mnuchin saying no payroll tax cut is in the senate gop stimulus bill. this has been a huge point of contention with respect to democrats and republicans, even though president trump wants it. tom: they can delay and move the can down the road on part of this, but i get out the calendar and i know what you will say. and it is about the rent is due august 1 for millions of people in america. flat out, they cannot pay it. lisa: this is the big issue. where's the political will to not pass some sort of extension? i should know as an futures -- i should note s&p futures did turn positive. if you would read into it, that is what i would read into it. it is interesting to see going forward how the white house

spends the worsening labor market. how inevitable was this versus a less effective health policy in controlling the virus? tom: to set up the next hour, let me do a data check. i wonder if the president speaking at 5:00 this afternoon, that will be interesting. what you need to know right now is on the claims and perhaps on the comments from the trump administration, yields are in and we have had a decisive break down and the difference of yield between the 10 year and the two two-10 year-called spread. if you're not part of global wall street, you know it is just a number. it signifies curve flattening, that is the 10 year yield coming in with a vengeance compared to the yield you get for two year paper. this is important. .t has been widely anticipated it will be interesting to see how it rebounds over to equities. now we are negative one on spx.

this sets us up for an eventful morning. jonathan ferro on bloomberg television. paul sweeney and i -- cannot wait to talk to paul sweeney about microsoft forward views. stay with us. this is bloomberg. ♪

♪ jonathan: from new york city for our viewers worldwide, good

morning, good morning. the countdown to the open starts right now. equity futures fading. that's begin with the big issue. mitch mcconnell hoping to unveil the gop stimulus bill. one major sticking point -- enhanced unemployment benefits. republicans said to be discussing a short-term expansion. it would be graded as separate -- ohio $1 trillion senator rob portman weighing in. senator portman: most agree there needs to be something in its place. most of us also agree the $600 flat amount for every work is not a good idea going or were because it is creating a disincentive to work. this is a crisis. we need to respond to it, but we cannot play politics as usual. if we do that, i think we get something done by the end of next week. tom: the problem -- jonathan: the problem is appeals like politics as usual. chuck schumer not holding back. senator