♪ yousef: executive action. president trump signs four virus relief actions. nancy pelosi says his orders provide little real help. hong kong police arrest mediatech and jimmy my -- media tycoon jimmy mai for curtailing political freedom. sadia remco presses ahead with dividend plans despite -- saudi aramco presses ahead with.

dividend plans. welcome to surveillance. i'm yousef gamal el-din. we have a situation. the countdown of the trade deal between u.s. and china is being factored in the wider picture. the stoxx 600 is up three tens of 1%, traders looking at two more stimulus measures. the president's actions appears to have bought enough time to get people back to the negotiating table, slightly risk on. that's getting reflected in the brent crude trade, just below the $45 a barrel handle. we are snapping a today losing streak. indications from saudi aramco are bullish. asia getting stronger, as well, back to pre-virus levels. a little downside. a weaker dollar but the g10 players can find a narrow range ubsu.s. 10 year yields --

says go short on the five year yield. plenty to consider, plenty to get through, let's get the first word news with leigh-ann gerrans. leigh-ann: good morning. billionaire bill gates says it's mind blowing the government hasn't approved coronavirus testing. cnn, he cited long lines at commercial labs. he said it means wealthy people have quick access but others have to wait. gates says no other country has such "insanity." health and human services secretary alex azar is visiting taiwan, a move likely to feel tensions with china. he praised the government's response to the pandemic. beijing last week said it would firmly oppose that trip.

hong kong police have arrested .im eli it is the latest action under the new national security law passed in june. it comes days after the u.s. imposed sanctions against carrie lam. deadly -- week's people are pledging billions to help rebuild beirut, after a conference by emmanuel macron at the united nations. protests.mid masked demonstrators are calling for the resignation of the government over the role in the explosion. global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. i am leigh-ann gerrans. this is bloomberg. yousef? yousef: thank you. midstng in the bloomberg

the guidance or lack thereof. toy're not in a position make a forecast amid the uncertainty. seeing liquidity at 400 million euros to 900 million euros. the key line being they're currently not in a position to make a fiscal year forecast. let's flush out our top story in more detail. he willnuchin says listen to any democratic proposal for a new corona relief package. house speaker nancy pelosi says she hopes talks with the white house resume soon. over the weekend, president trump took executive actions on relief to work around the current national impasse democrats and some republicans have called the president's actions unconstitutional. to get more, we have a guest.

thanks for joining the program. immediate reaction. we put this up on a report. let me read out a key portion. as you look at the economic outlook, there are negative scenarios. the most pessimistic and of not supporting state or local government. states have to balance the budget. they are experiencing reduced tax revenues and so there will be employee meet -- employment reductions. how much time did the administration by itself with this move -- buy itself with this move? >> not enough. we only have a few weeks or so before they need to get an agreement done. i don't think we can exaggerate, we've had a bounceback in the economy -- that goes without saying. but there has been driven a lot by the policy stimulus. if that policy stimulus isn't continued, we could be looking at a drop in consumer spending. we know consumer spending is the main driver of the u.s. economy.

we could be looking at a second dip if this isn't sustained. line crossingr the bloomberg, a busy start to the show, but this is around u.s. china relations. as had been anticipated, china is going to sanction u.s. officials in retaliation over hong kong. we had been getting some lines the last few minutes around china's position when it comes to the visit of a top u.s. official to taiwan. the key line being they're going to reciprocate the latest move with sanctions on u.s. officials. he equity futures at the moment still holding on to some upside there. but seema, in terms of the u.s. stimulus, and i want to drill down to this, what is your view on u.s. assets then in light of what you could argue is a goldilocks moment, really, between recurring stimulus packages and a very accommodative fed?

seema: so, i would say that we still like the u.s. there are other regions at the moment which look a little bit better, but i think the key thing -- we generally have a consensus view that there will be a stimulus package. they will come to some kind of agreement. what this has shown is if the u.s. does need further stimulus, as will many other countries around the world, there's going to be another debate. it's going to get harder and harder to pass new packages. we need to bring this crisis under control because the support mechanism is going to have to come to an end at some point. concerns have brought us to and focusur concerns on key growth areas. we have increased some exposure within emerging asia and some in europe, as well. yousef: seema, i mean in terms of u.s. equity story, you've got

a situation where the nasdaq has considerably outperformed other indexes. last week was an exception when it came to the russell 2000. the first time, it was the other way around. nasdaqly surge and the paring its weekly climb to 2.1%. are you a believer that it is time to rotate out of tech, even if just a little bit, and into the cyclicals? think is we have maintained that exposure technology. i don't think it's a time to reduce it. this is also perspective to some increasing and a little to the value space. you have to be very picky. with bond yields so low, is difficult and seeing -- being a rotation. evaluations are very, very clearly in favor of value. but within technology, we're still really in favor. we know investors are looking

for strong balance sheets, positive cash flow, and also have got a strong secular growth story. with the pandemic, all we've seen, it's accelerate the movement already in play the last decade. technology, to us, is here to stay. in emerging asia, we like to play that technology story there, as well. yousef: hold that thought. we still have a lot to get through. seema shah. just to get you a bit of a recap as the line comes in, the chinese government making it clear they are going to sanction u.s. officials in retaliation. we are getting meat on the bone. they are sanctioning senators rubio and cruz. we're seeing the offshore yuan dropping a little on the sanctions plant. that is across the board, beginning to recalibrate. we will get into the action and implications shortly. this is bloomberg.

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♪ yousef: economic finance politics, this is bloomberg surveillance. i'm yousef gamal el-din in dubai. let's get back to the breaking mind that came in the last few minutes. china is sanctioning u.s. officials. the response is firm. it includes senators marco rubio and ted cruz and it comes hours after hong kong police arrested the media tycoon and democracy activist jimmy lai. for more on the national security law fallout with karen light, bloomberg's china government ever -- editor. is this the beginning of a bigger china response?

this is al, you know, day hong kong didn't think it would see even six months ago, between the jimmy lai arrest and the sanctioning of officials. we just saw 10 minutes ago, china sanctioned 11 u.s. figures in response to the 11 official sanctions here over the weekend by the u.s. and they include a number of interesting people, including the president of freedom has an the organization itself and the director of human rights watch. so china making a bit of a statement with that number. this is going to fuel u.s. anger over hong kong, especially coming on the back of the arrest this morning, and the things we saw this morning and hong kong with hundreds of officers storming the offices of the largest pro-democracy newspaper here, one of the most popular publications in hong kong has really been a day a lot of people have worried about ever since the enactment of the security law. people thought it would be something used crackdown on freedoms here.

and this short up a lot of those concerns. thenf: so what comes next in this cascade of events as we look to the countdown around the discussions when it comes to the review of the phase i trade deal? karen: you know, this comes days after trump made this huge move to ban wechat and tiktok. it really increased fears of the coupling of the american china economies. so people are going to be watching the hong kong here to see if things increase, and also watching health and human services secretary hayes are's trip -- azar's trip to china -- to taiwan. this really upset china. it's repeated its opposition to that visit. has are saying azar's visit

little to do with the coronavirus and is primarily aimed at sending a message to beijing. we could see more of that from the u.s., as well. yousef: we're going to leave it there. karen, thank you for that. some more big moves in some of these markets. stock specific on twitter, getting six by 4% on reports of those -- 6.4% on reports of talks,reliminary tiktok potential takeover of tiktok. in excess of 7%, we'll see where to consolidate that in the next hour or two. let's get back to seema shah, who joins us. i'm looking at some of the market reaction. as much as some of the gains are getting trimmed a little bit, it's often kind of major response given the severity of these tensions and the excavating -- escalating tit-for-tat and escalating

rhetoric. how much more thick-skinned do these markets have against these back-and-forth? well, a lot of this was priced in. it was expected there would be an increase, as you said. it would get louder and louder as we get closer to the election. i think it was to be expected. what we have seen is that it may be more than what was expected. and so it is increasing the chances we get fundamental action from the u.s., even before the elections. if that were to be the case, the market reaction would be significantly more negative than what we're seeing. but this tit-for-tat in the coming months, especially as we get november coming closer and closer. yousef: is the real redline, do you think, around the phase i trade deal? we're counting down to the review of that agreement. many ways, i feel like a kid

waiting for his school report for the midsummer. what are you expecting on that point? reiteration of cooperation? or is that going to be another front where those tensions really become visible? seema: well, what we have seen in the last couple of days is more and more people talking about potentially new tariffs coming in, as they come to the end of the phase i. as you said, the worksheet exams coming through. i think it's an increasing risk, but i would say at this stage, this is grown and markets need to expect this. from our perspective, when we look at china the coming years, we have chopped off a little growth of the china forecast for the foreseeable future. that doesn't disrupt the way we would consider investment opportunities, but it is something we need to take into context. we need to look at which sectors will be affected the most. as i said, we still like emerging asia.

it changed the way we're leaving the china opportunity. -- viewing the china opportunity. yousef: i look at some of the china five-year bond yields, and they were up 11 basis points last week. that speaks to economic recovery. then i look at cpi figures and core inflation at the weakest since 2010. that has to be a red flag. seema: it is a concern. deny't think anyone would there is a crisis, an economic crisis, not just in the u.s. and europe, but asia as well. china has not been able to avoid that. the u.s. china trade tensions do not help the situation. we look at it from a relatively value basis, china looks more attractive than other opportunities around the world. the growth story is good. we think this table is packages are at play.

they have come out of the chronic crisis relatively unscathed relative to other countries. these are things we need to keep a close eye on. inflation figures will cause some traders some concern. yousef: seema, our conversation continues. she stays with us. let's give you a snapshot of what is around the corner. her belly was u.s. economy hit by the coronavirus locked-in? we look at the key data. this is bloomberg. ♪

♪ you're. i'm you missed watching bloomberg surveillance. i'm yousef -- you're watching bloomberg surveillance. i'm yousef gamal el-din in dubai. economies shut the median forecast for 20%, a sharper slump than many european tears. the recovery is made higher by -- harder bite cases that likely hit. that gdp number is coming at us as 7:00 u.k. time. joining us is seema shah. i get we're going to see recovery in the fall. what are you going to look at for which you can extrapolate for your client? seema: yeah, i think the gdp

figures, it's very backward looking. we already know the u.k. had a horrible hit in the second quarter. we've been focusing more on high-frequency indicators. i have to say that when we do our analysis across the globe, at which our countries, we like anthe u.k. is 1 -- on evaluation basis, it looks relatively cheaper than the rest. that's for good reason. the fundamentals of the u.k. economy are worrying. this is despite having had one of the most impressive furlough schemes, globally. we have to remember this all comes against the backdrop of significant government help. this is a real worry for us. we do have concerns around brexit. when we look into 2021, we do continue to have worries there, and we also know that government, the chancellor is already thinking about how they

can pull back that money, reduce the furlough scheme as soon as october. it's going to put a lot of businesses in a very difficult position. europe,more broadly in the summer is a time more sovereigns will take a break from issuing debt. but not so much italy because they are looking to capitalize on what happened, very attractive yields. at this point, how do you include this in your asset allocation strategy when it comes to europe? seema: yeah, you're right. typically, how this would be a slow month. italy, spain all try to take advantage of these conditions. they may need additional fiscal spending over the coming months. they're not at the end of the crisis so you have to be sensible. i don't think we're looking at conditions to be as low as what we're used to.

we're quite impressed, on three separate accounts. one is the ecb is looking very credible, certainly more credible than it was back in march or april. it inspires confidence in people. the second thing is the physical mechanism, taking that big step toward debt has improved prospects for a longer-term basis. the third thing is coronavirus cases. they are looking attractive. yousef: we have to leave it there. seema shah. coming up, we talk about saudi aramco. they announced their results and they're going to push on with their dividends. we're going to dig into that. this is bloomberg. ♪

yousef: economics, finance, politics. this is "bloomberg surveillance." i'm yousef gamal el-din in dubai. -- in dubai. i've moved to dubai, that is

outdated. newsve some major breaking china. the government announced they're going to section 11 americans in retaliation for similar measures imposed the trump administration, according to the foreign ministry spokesperson. a lot of the gains have given back, especially on the equities side. .7%.toxx 600 down the moves are fairly contained. a sign of resilience at least at the moment. let's get you first word news and cross out, with leigh-ann gerrans. leigh-ann: breaking news this hour. china is sanctioning 11 u.s. officials, including senators ted cruz and marco rubio, in retaliation for similar moves against hong kong, with the u.s. sanctioning 11 chinese officials over the weekend, including the city's chief executive, carrie lam. president donald trump announced roger executive orders this

weekend, including a temporary payroll tax deferral and expanded unemployment benefits. the move was criticized by opponents for providing little real help, saying it is an attempted power grab from congress and a way to defund social security and indeed medicare. democrats and republicans are still trillions of dollars apart from key spending issues, and there is not yet a firm date for another round of negotiations. house speaker nancy pelosi is calling for a compromise on the overall package. treasury secretary jeevan mnuchin -- steven mnuchin prefers a peace deal. right.s just say we are we agreed with the democrats. let's just pound legislation on what we agree on adnoc these off one at a time, and they have refused to do that and knock these off one at a time, and they have refused to do that. after last week

votingblast, leaders are on $100 million to rebuild beirut. --comes amid mas protests mass protest in lebanon. is violence in baylor bruce after a contentious election result. -- in belarus after a contentious election result. president alexander lukashenko claims victory. international observers have long criticized elections in the country for not being free and fair. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm 120 countries, leigh-ann gerrans. this is bloomberg. yousef? yousef: thank you very much, leigh-ann gerrans. let's talk about saudi aramco

because the company is pressing ahead with a planned 75 billion dollar dividend this year, despite a slighted profits and rising debt. and a widening budget deficit. we are joined by annmarie hordern. we have seen other oil majors alter dividends. how sustainable are saudi aramco's ambitions to live up to the promise that they made yesteryear? annmarie: you can take from this report that they are going to maintain the dividend as long as they can and squeeze the business in order to maintain that dividend. they are holding firm on it. we know, for all oil majors. for saudi aramco, you know better than anyone else being in the region, it is so crucial for the government, the revenue they get from crude and the revenue they get from aramco, and the dividend is no different from that. those revenues will be funneled

through the state, and that is why it is so important for saudi aramco to maintain this dividend, especially when you look at this year, when its budget deficit is set to exceed 12% of gdp. they may end up having to issue more bonds or loans to meet that commitment. they said that back in june. but it does seem they are diverted to the dividend going forward. yousef: when a company like saudi aramco announces earnings, their impact -- their implications for supply chains around the world. what stood out to you? capex stood out to me because it was at the lower end of the rain that they announced in march. it is much lower than what they were going to start the year with. they thought they could get to a capital expenditure of as much as $40 billion. now they are looking at 25 billion dollars to $30 billion. the gearing is very important to

oil companies. that really spiked. aramco was awaiting this. oil companies want to keep a low giving. one thing is a bright spot for aramco, and that is the fact that they started this crisis with relatively little that compared to the other oil majors. that is one bright spot. that gives them the ability to borrow, which is likely why they will remain firm on the most important thing for aramco, which is that dividend. it is difficult to get any information on the road ahead from some of the senior oil i executives in the dividend, but this time around, he has given indications of his thinking. annmarie: the number one regional margin for their -- market for their exports, they see the demand there come close to precrisis levels.

nasser in the call on sunday was journalists, 2019 was 100 million barrels a day, the crucial question is going to become a when do we get the remainder 10 million barrels a day? fromill have flight far where we saw precrisis levels in traffic,airline piecemeal around the world. that will probably be the hardest for the global oil world to really make up. yousef: it has been remarkable as well, the aramco share prices hovered around 32, 33 saudi rials. here is what else is still to come. we're looking at the u.k. firms, the largest of them, and they are 10 times more profitable when they have executive boards that are at least one third women. but the industry is lagging far behind when it comes to gender equality at the top. we are going to discuss that.

this is bloomberg. ♪

it highlights the growing of a labor market crisis as government support is withdrawn. this week the bank of england

warned unemployment will rise to about 7.5% by the end of the year. and that is your bloomberg business flash. -- set the echo yousef: yousef: thank you very much. the ftse 100, there are more ceo's called peter than there are women. the disparity contributes to a sizable loss of profits. to flesh all of this out, dani burger joins us. give us a bit of a sense of sort of what the numbers are pointing to. dani: the numbers here certainly point to an economic issue as much as a social one. the pipeline, the consultancy in the u.k. have an executive board there that are at least one third women. they are 10 times more profitable than those that are only men. that means in a ftse 350, there is 195 billion pounds worth of profit that these company's could unlock if they simply

added more women onto their boards. a situation has also been worsening. last year there were equal numbers of women as there were men. not a great statistic nonetheless. the situation has been worsening because of the pandemic. unemployment is especially high among women and minorities, and the government is allowing companies to lose focus more or less on this as they deal with the fallout. they are telling companies they are no longer required to report their pay gap statistics as they deal with the pandemic. i talked to lorna fitzsimmons, the cofounder of the pipeline and also former mp herself and she said this was absolutely the wrong move for the u.k. government. take a listen. we cannot let the -- become vulnerable because with how we behaved during covid. lots of our clients are in the categories that have to collect from the core data in

terms of the gender pay gap, and they have the data sitting there. so the good companies are going to publish it. the government needs to sort of listen and say if they collected the data, we should still be looking at that data. especially during the pandemic, this is a clear way still not seeing it happen. theresa may also wrote the forward to the study from the pipeline echoing westmont one of fitzsimmons -- yousef: locker room ethics within the banking world are back in the spotlight as a trial --ng barclays is back emerged as part of the trial. remarks about her appearance and who she might be "sleeping

with." a british dealmaker with ties to the persian gulf, she was one of the few prominent women at the industry at the time, she is suing our place for 1.6 billion pounds out of -- for cheating her out of profits that were brought in. we're joined by ellen milligan. why were these phone transcripts made public to begin with? were athese transcripts part of this trial between amanda and barclays before the trial began. her lawyers men hinge -- managed to retain 1000 documents as part --evidence

>> it is no secret that ethics -- it demonstrates how sexist the banking industry can be in an incredibly stark way couple -- some of the languages explicit and cannot be repeated on television and is very demeaning towards women. in terms of the attitude toward women in the ?ndustry, has much changed ellen: i think it is easy to say these comments were made 12 years ago and the industry was different back then, but we spoke to a couple of lawyers who specialize in sex discrimination cases, and even today, similar kinds of comments crop up in

messages, text messages between colleagues when it gets to the stage of a lawsuit. -- the disclosure stage of a lawsuit. one lawyer told us that they would be a mad scramble to delete messages now that they realize the comments they make now may come back to bite them in time. appreciate those key points. that is ellen milligan, bloomberg's eagle reported based out of london. i one big at -- i want to get back to the market action where we have a decision by chinese policymakers to sanction u.s. we arels in retaliation down about .1 percent. $2034 anovering around ounce.

ranges have been confined going into early trade. it is a holiday in japan, and singapore. they areost part, unchanged at 0.56%. coming up, we will have you talking about a very heated the depthe as to conversation. bob prince will talk about why the role of government has been upended by the pandemic. we will bring you that next. this is bloomberg. ♪

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 -- yousef: economics, finance, politics. this is "bloomberg surveillance." i'm yousef gamal el-din in dubai. haschinese government decided to sanction officials in by the on similar moves trump administration. the stoxx zero 600, technology --res leading losses among

energy producers are gaining because you have crude on the up after this saudi aramco earnings announcement. a fifth of 1% broadly. marketet back to the action now, and the conversation around debt. co. cioter associates bob prince says while government and high-grade corporate jet have traditionally been a place to hold wealth, the extreme low interest rate world brought on by the covid-19 pandemic has upended the role. prince spoke with jonathan ferro. take a listen. >> bob: while everybody sort of focuses on the change in payroll, and people tend to focus on the growth rate, the big issue is the depressed level of spending and income in the economy, which is reflected in the level of the on employment rate, at around 10%. the longer that we are in that situation of a depressed level of income and spending, the more

vulnerable individuals and companies are to that set of circumstances. in the most likely timeframe for that virus impact on income and spending is 18 to 24 months or something like that. it is very uncertain. if you could imagine, we have just had kind of a four-month fiscal program, or one quarter, imagine having to do that a, third quarter, fourth, fifth, sixth, seventh, eight quarters. imagine having to do that for eight quarters in a row to make up for the low level of income and spending in the economy. imagine the potential on the dollar, the potential on inflation, and the effects of other assets. and also as that lingers on, i think you have a combination of economic destruction with liquidity expansion. jonathan: the added vulnerability is zero rates. and a world where they cannot get away from zero rates for the foreseeable future

affect the economy. can you speak to that? bob: it is a mind blowing thing when you have the zero interest rate on the treasury bond, that means there is no interest rate. if there is no interest rate, there is no discount rate on cash flows. how long is the rate of cash flows. they have no discount rate except for risk premium. there are a number of implications for bonds in the traditional 60/40 portfolio. from the bond perspective, you have virtually zero return, and you have an asymmetric return because there is no limit to how much the bond yield can go up. even if it goes to fled zero, you are only going to make maybe 5%, 7% over the next several years or so, but you could lose 20 to 30% if you have a real field rise in. so you have an asymmetry in the bond market and you're not getting paid any return. what people are not registering is how that impacts the equity

market. there are three big impacts of zero interest rates on the equity market. first of all, you have taken away the floor on an equity decline. typically if you get an equity decline and an economic decline, earnings are falling, but if bond yields fall, it lowers the discount rates. if you cannot lower the discount rate on those earnings, the downside is bigger. the second thing is if you cannot cut interest rates, you cannot put a floor under the economy except through monetization of fiscal policy that we are doing, which then threatens the currency. the third impact it has on a portfolio is if the equities are falling, normally you would get the bond rally to diversify that risk away. but that doesn't exist now. you are sort of holding the equities side of it, with not much downside protection, and you're holding the bond side of it with an asymmetric return pattern and zero yield. so it is a very problematic scenario for any sort of

traditional investment strategy. bridgewater is the co. cio there, bob prince, speaking with jonathan ferro. bloomberg surveillance continues in the next hour with tom keene in new york and guy johnson in the u.k. don't miss that conversation on commodities with the barrick gold ceo, mark bristow. meanwhile, the markets coming in a little more cautious the last 60 minutes after the announcement from the chinese government in terms of sanctions on 11 american officials, and the other big talking point is going to be around the american stimulus measures, the u.s. esident taking executive action. is that going to be enough? is it going to last long in the for the market to sustain its current leg up? this is bloomberg. ♪ experience the ultimate sports hub.

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perhaps, isrning, by executive order on hong kong. china will sanction senators rubio and cruz on taiwan, taipei, because beijing, the cabinet offers or makes the first visit in over 40 years. beijing says a candid dialogue is necessary. there are trump executive orders, some suggesting they are incomplete. perhaps executive orders will help in istanbul. the lira