divergence within the market in terms of valuation. >> there's a disconnect between public markets and what is happening on the ground. >> the worst that data looks, hopefully the more there is for fiscal stimulus. >> the pace probably slows down now that we've had this rebound. we've got demand being stimulated, and that should lead to higher prices. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning. it is a simulcast on bloomberg radio, on bloomberg television. off. off, abramowitz joining us on the simulcast through the morning, francine lacqua in london. , andcided to do this endurance test here. we are going a combined 42 hours

each year. we are thrilled francine could join us on the simulcast because we actually got lucky with what has happened with the scheduling. in france, with some shockingly weak economic data. francine: this is pmi. what a delight to be spending four or five hours together. i think they are trying to see who breaks first. my money, i don't know if it is on me are you, actually. we will see after the second hour of the simulcast. france coming out with pmi's that were pretty terrible, and that has taken the market by surprise in europe. there was that and germany. both leaders saying they are hoping not to go into full lockdown again. i know you are also watching the u.s. postmaster general testifying to the senate. it has really captured the .magination of europeans tom: we've got to postmaster general testifying today, and the huge backstory is do they

fold the post office system challenges into further stimulus . jeanne zaino made it very clear it is to mr. trump's benefit to have that deal. also as well, we will get market data coming out on pmi in the united states. can't believe it will make the same splash as we saw in europe, but there it is. let me do a data check right now. futures at negative six, dow futures -45, the vix backing up from 21 to 23, and the yield, 0.63%. most importantly, the real yield is at negative 0.99%. we've been inundated with, will ro be able to do "the real yield" this afternoon? there were many people what bloomberg it into do "the real

yield" for jon ferro. up toeve taylor riggs is that great challenge. it is a good way to bring in our first guest. this is perfect for the morning. jonathan golub joins from credit suisse. i want to go right over to james sweeney and the rest of your fixed income and economics team. what is the large negative real yield mean for equity investors? jonathan: it is interesting, tom. we have done a whole bunch of work on what it means for stock prices because i know that people looking at gold and other assets are probably obsessed with this. the market cares more about nominal interest rates than real yields. they do care about this issue of inflation, and would we are talking with clients, whether we have inflation or deflation on the back of this crisis, it is a really big discussion point because it sets a tone for what type of stocks are going to win.

but in terms of the direction of the market, it is the general level, the 63 basis points on the 10-year that matters more to stocks than this -1% you are talking about in real yield. tom: right there is worth the watching of "bloomberg surveillance." it is the nominal yield minus inflation expectations, and the residual of that is the real yield. what you are hearing from golub is look at the nominal yield is the most important determinant. what does it mean for the big banks and for banking in general? jonathan: banks don't do well when there is no interest rates. at 63 basis points on the 10 year, you could pull up on your bloomberg what a two-year bond yield is doing, which is a lot lower than that, and banks can't be profitable. one of the reasons why the u.s. poor isve done so because the yields in the united

states have fallen meaningfully, but european yields were so low going into this crisis, they couldn't go any lower. so the damage to u.s. banks has been much greater on a relative , the then the banks european banks as a result of this crisis, which i think is a surprise to many. tom: an hour ago, we saw john deere come out with a better view for their q3. certainly a surprise to the market. is that a trained we will see coming here, within the gloom of a panda been marked down -- of a pandemic markdown. tom: we saw in the second quarter -- of a pendulum markdown? the seconde saw in quarter that it was the single quarter where the market cared less then any other. people are trying to figure out where is this thing going, and

what happens to q3 earnings in the middle of this. it is probably more noise. people are really trying to figure out the trend direction, do we have a cure, what does do for rates, what does it do for inflation, which is really the key issue. but the next quarter in terms of earnings, the market really is shrugging his shoulders much more than you would think. back to this's go inflation versus deflation. if we want to see inflation, where does it come from? is it central bank action, stimulus, or simply supply chains? if you move supply chains back home, partly because of trade wars, but also because of covid, doesn't just mean that prices automatically go up? jonathan: it is a really great question because recently, we've had a pickup in actual inflation. you are starting to see if you wanted to gobuy a bicycle esco

-- if you wanted to go buy a bicycle or tennis racket or something, there are shortages, and you are seeing inflation. for people who want to leave new york city and buy an apartment or rent a home in the suburbs, the prices are up because there's no additional stock of homes to buy or rent. so you are seeing inflation now, but not the kind that is going to freak the market out. this is really transitory. it is because of the result of the crisis itself. the real question in terms of longer-term inflation, that is really what matters here, is are you going to see this as a systemic issue because the fed is printing money, and it is ultimately going to be a monetary phenomenon that prices go up broadly on a sustained basis? if that happens, it is going to affect asset prices. if it is a near-term shortage,

for example, the price of lumber is up, but that is not is something that is a long-term trend. that is really resulting from the current crisis. that is not going to make the market uncomfortable. you havequestion, if central banks everywhere printing money like crazy, prices naturally go up, and that is the thing people are focused on. with 15 a labor market million unemployed americans, it is very hard to see right now anything that looks like underlying inflation. francine: there are two things i learned in lockdown. saw aas yes, bicycles rise in inflation, and there was also a puppy shortage. i am not sure whether you can model all of that. saw three standard deviations in prices of puppies. do you buy inflation protection at this moment? jonathan: i don't think so.

we were talking about what matters. in the inflation/deflation argument, and i talked to our global strategist about this all aretime, if you think you going to have a long-term inflation problem because of all of this money printing, then value beats growth, and non-us assets beat u.s. assets. if you think we are going to have disinflation, and that is my view, then ultimately, all of the damage being done here actually pushes inflation down. but if that is the case, then andth wins and tech wins large-cap, so this discussion is not just an academic issue. it is the single most important issue for pension plans, hedge funds, mutual fund managers who want to figure out how you play this thing not over the next three weeks, but over the next 1, 2, 3 years. tom: one final question.

i was thunderstruck at a cautious james sweeney the last time your wonderful chief economist was on with us. i had never heard sweeney so cautious. that is confirmed today by the statistics out of france as well. are you investing based on sweeney's caution? jonathan: first of all, we talk all the time, and people don't always agree on everything. right now we are seeing the world the same way, that the doubts that we've had to come of this v-shaped bounce off the bottom is going to start flattening out as we go into the september-october timeframe. we believe you are going to see more data start to roll over, and we saw that for example with the jobs data yesterday on the unemployment claims. it has really stopped coming down. the improvement in the jobs situation has kind of flattened out. we think we are going to see that.

james is a big proponent of the idea of industrial production, that the industrial data which bounced really hard off the bottom is going to stop improving on a relative change basis, so he would actually -- i haven't spoken to him -- he would probably look at france and say directionally, that is not a big surprise. tom: thank you for the briefing with credit suisse. just wonderful to see that combined research. here's what we are going to do today. francine lacqua rumored to stay with us through all of "surveillance" today. we will talk to kevin cirilli and drive forward to the republican convention. i think vice president pence right now speaking on "fox and friends." and liz ann sonders will join us with charles schwab to talk about how you are going to think about your investment through the weekend. we've got lots going on this morning. not a normal friday. futures negative six, dow

futures -39. yields are in. that is important. the 10 year yield, 0.6347. francine is shocked. we quote four decimal points on "surveillance." this is bloomberg on radio, on television. ritika: joe biden slams president trump is a national embarrassment, and valves to end what he calls the darkness. biden accepted the vice president to nomination for president last night and said in his administration, there would be immediate change. mr. biden: the days of cozying up to dictators is over. , americasident biden will not turn a blind eye to russian bounties on the heads of american soldiers. with foreignut up interference on our most sacred exercise, voting.

ritika: biden also said president trump has failed in his most basic duty to protect americans. president trump warns that he will impose tariffs on american companies that refuse to move back jobs from overseas. the president says companies that do move jobs back would get tax credits. it is not clear if the white house is actually developing such a policy. pressure growing on hong kong to reopen its economy. there has been a sustained decline on covid cases in the city. reports suggest that hong kong may not ease any restrictions until after a mass testing next month. hisllionaire ended commencement speech last year at morehouse by promising to pay tuition for the entire graduating class. he's being in -- he's

being investigated for potential tax crimes. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg.

mr. biden: this is a life-changing election. this will determine what america is going to look like for a long time.

character is on the ballot. compassion is on the ballot. decency, science, democracy. tom: vice president biden last night. we are trying to drive forward the political conversation. both lisaacqua in for abramowicz and jon ferro. in for kevin cirilli is kevin cirilli, our chief washington correspondent. you nailed this in the last hour, vice president pence over at "fox and friends," and they are clearly selling the message on law & order. is that the platform of president trump forward? kevin: absolutely. it plays on two fronts. remember the issue back in the 2004 election, when bush was up for reelection against john kerry, and security moms were something we heard about? , and aftermen vote

9/11. that is also something that played out in both 2008, as well as 2012 and 2016. to take a modern twist on that, look at the racial unrest and protests that the country has experienced over the past couple of months. the republicans feel that the issue of security and law & order will help them make inroads in the suburbs. tom: the practicing candidate here would be ms. harris of california, who i believe has a little bit of legal experience. how does she help mr. biden defend against the law & order's rest of the republicans? kevin: democrats tell me, first and foremost, her record in terms of being a prosecutor. make al be able to prosecutorial case against vice president mike pence on a debate stage, as well as on a virtual or actual campaign trail. but second, her ability to

mobilize the base. you saw her remarks during the convention. they feel she will be able to bring in some new voters to the party, or to really motivate some new voters in the party because of her notion as a glass ceiling shattering vice president. francine: are they trying to get voters that voted republican last time, or just trying to get voters who have never voted? yesterdayden speech on character and decency, does it spur people that would not have gone out to vote this time? kevin: last night, the nominee joe biden really made a pitch to those voters we have been talking about all week, and terms of those voters who are vote voters, the folks who for democrats sometimes, republicans another. voted for obama, voted for trump. you saw that in terms of all of the images, in terms of john

meacham speaking, his tone and the nominee's address, all of that from the cars parked upside in delaware to watch the fireworks, all of that was a very suburban pitch. whether or not the rest of the virtual convention was that same pitch, i don't think it was. based upon the conversations i am having with republicans, they would argue that it lacked specifics as it relates to energy policy, what the first 100 days would look like, and it left a lot of question marks. those are the questions republicans are going to be asking in their speeches next republican's turn for the convention. francine: like him or hate him, president trump is very good at social media. how much social media will he do during the republican convention, and could that be a game changer for them? kevin: this is something that has been a theme throughout the

past couple of weeks. if 2016 really the start of the social media viral campaign, this is without question the extension of it. what used to be at one point when candidates and top staffers and campaign managers and advisors would be play into the front page and the photographers for the front pages of the nation's newspapers, now they are playing for people's's social media feeds. they are playing for those viral moments to get inroads on different social media platforms outlast the new cycle and the newsday to drive the conversation forward. so absolutely. just look at the ratings. ratings are down 20% on average per night, according to the most recent data we have available for us for the dnc. so i think yes, absolutely it will be fascinating to see how the ratings in this changing medium occur across industries. tom: as we go into this weekend,

i understand there is a presidential focus, brief us on the one senate race you are watching. there's always x number of senate races that are interesting, but what is the one you are studying this weekend? kevin: iowa. i think iowa is fascinating. senator joni ernst, republican of iowa, is up for a tough fight against a progressive, theresa greenfield. it has the culture war class, energy policy, with ethanol so crucial to the hawkeye state, and how that is going to play, especially with progressives and degree green new deal. -- end the green new deal. tom: does grassley help senator ernst? kevin: chuck grassley, i would argue, based on the conversations i have, is the could essential republican in the trump era -- is the

quintessential republican in the trump era. president inst the the way he uses social media, and they are two peas in a political pod, grassley and ernst. they are all embracing the ethanol industry, they don't hide it, and they are not afraid to take it to the president when they disagree with him. tom: kevin cirilli, thank you so much. really informative, just encyclopedic knowledge there. there is a convention -- no, it is not tonight, the democrats. david westin leading our coverage on the republican convention. of course, one of the great distinctions here is i believe the president will be much more evident through each night of the convention. francine, this is so different than over in england, isn't it?

francine: it certainly is because, first of all, if you look at our election campaigns, they are much shorter. the money is also a fraction of the price. in terms of the show and tell, it is a different kind of dynamic. in the u.s., it is much more about personality. it is interesting to have parallels between the two. tom: i wish we had some of the british attributes, but you are not going to get that with a pearl entry system. what you are going -- with a parliamentary system. what you are going to get on in for jonathan ferro and abramowitz, is francine lacqua. an ounce,936 painful for people like me who bought it at $2038.

up next, liz ann sonders of charles schwab. thank you for joining us on bloomberg radio and bloomberg television. we continue. good morning. ♪ hike!

simon pagenaud takes the lead at the indy 500! coming to the green flag, racing at daytona. they're off... in the kentucky derby. rory mcllroy is a two time champion at east lake. he scores! stanley cup champions! touchdown! only mahomes. the big events are back and xfinity is your home for the return of live sports.

tom: good morning, everyone. "bloomberg surveillance," our simulcast, bloomberg radio, bloomberg television. lisaine lacqua in for abramowicz and jonathan ferro. we have been talking about the slowdown in france. i want to really digress here. this isn't something you normally do, but like brexit is a new brexit because of the pandemic, how hasbro exit changed -- how has brexit changed because of this huge catastrophe? francine: first of all, i would like to qualify it, it is a well caffeinated francine lacqua that joins you. we are looking at michel barnier , the chief negotiator on the european commission side, briefing reporters in brussels about the fact that there just wasn't enough progress.

that is having an impact on sterling, and it does seem that both the eu and the u.k. are worried that there is just not enough progress for the moment to find a deal before the end of december. but remember, they still have two months to negotiate. the u.k. has once again said they won't ask for an extension. it could be like the eu, where at the 11th hour, they find an u.k.ment, or that the would rather not find any agreement and go to wto rules. tom: is europe heading back to recession? is that the right phrase? francine: this time you are talking about, for example, the german numbers and the french numbers, which were really quite shocking. what was interesting if you look at the pattern sets the lockdown started in march, initially we had better-than-expected figures in terms of gdp growth, and today the pmi numbers were pretty bad. some of it may be seasonal

because even though there's covid-19, a lot of france and many parts of europe stopped, but it is going to be an interesting trajectory. it is not as smooth sailing as maybe we thought six or seven weeks ago. tom: i wanted to bring this up because there's the slow down, the shock of the french pmi numbers, and now to america, we welcome all of you on bloomberg radio and bloomberg television, and we go to liz ann sonders of charles schwab. her experience is extraordinary. i want to go back to the moments of a few years ago, where there were big events. we are now into not a big event, but almost a weekly and indeed monthly numbness of struggling news. how do you invest given a numbness? liz ann: it is an extraordinary say this, iwould

suppose, in a normal market environment, but investors have to remember that some of the basics around rebalancing, broad diversification i think really come into play in this environment. i continually get questions about whether to be in this market, given high valuations or election uncertainty. should i get out now, get in or get out? ofhink that is the moxie some of the newly minted day traders as a long-term strategy. in this environment, driven by volatility when asset classes are telling you when it is time to do something, keeping us in year by forcing us to add into weakness, which is ultimately the best path to long-term success. tom: some of your research is about volume, about retail trades, about the confidences that are out there. measure for us a pile of money on the sidelines. liz ann: it really depends on

what type of investor you are looking at. if you look at the most active investors, their equity exposure has gone well up. there's not a lot of cash there. if you look at more traditional investors, there was a recent gallup poll, you can look at overall household exposure to equities, that is another unique part of this market environment. you really have significant divergence in terms of both measuresl and attitude of sentiment. ofyou look at the cohort newer, younger, more active day traders, their exposure exists ordinarily high. -- their exposure is extorted nearly high. if you look at other investors, they have had more skepticism about this and are holding larger amounts of cash. so it really is a unique environment where you have to break investors into various cohorts. in some cases, as a function of

age, to get a sense of where there is still access and opportunity. do -- is where volatility, more volatility a given because the number of infections are rising, and it will be much more difficult to read the economy? liz ann: i think economic volatility is absolutely a given. into the fall, that is likely to pick up absent any news on the virus. i think election-related volatility tends to pick up in the post labor day environment, so i would expect that to be the case this time. but i think economic volatility, not just driven by a number of cases. there's been a number of focus on vaccines, and i think the market would be pleasant lee surprised if we do get near-term news on a vaccine, but i think just as important would be news on therapeutics.

we have to remember that upon announcement of a vaccine that is ready for humans, there will be all the follow-on questions on efficacy, availability, the percentage of people willing to take it. so i don't think the headline we are looking for on a vaccine answers all the questions that we have now or will then. should we spend a lot more time trying to figure out what companies will go into liquidation, will go bankrupt? and is this because of covid-19, or just on acceleration of trend? liz ann: we are seeing heightened level of bankruptcies akin to what we saw in 2009, but we also have fed facilities that have been able to stand that tied a little bit. i still think it is a factor, particularly when we look at the relationship between temporarily unemployed and permanent job losses. those have been going effectively in the wrong direction. we have seen a decline in temporary layoffs and a rise in permanent job losses.

i think that will continue to be tied to bankruptcy filings. defaults have been held at bay do in large part to what the fed has done. that may be what is different in this environment versus last time. i think there are some companies that are just throwing in the towel right now. bloomberg radio, bloomberg television, the simulcast. we welcome all of you on this friday. i didn't know this would be the theme of the week on monday, but here it is. and that is diversification. are we over diversified in our retirement plans? liz ann: actually, we think not. if we look at the lack of rebalancing that is done, particularly u.s. versus rest of world, there is a significant

bias within portfolios toward u.s. equity exposure, largely because of the lack of rebalancing and the outperformance. what tends to happen as you move from one cycle into another cycle, you tend to see a reversal in leadership, and we do think there is an opportunity for non-us to provide some diversification, which hasn't been the case in the last 10 years. tom: well, let me interrupt. this is really important. are you talking about european multinational? liz ann: i am not talking about individual names or companies. tom: but are you talking big cap or talking e.m.? liz ann: development of markets, emerging markets at the broad asset class level, not specific to any country. i do still think that large caps both in the united states and globally will be in the leadership position. i think the fundamental inferential from a percentage of zombie companies' debt to equity

ratios, all of the performance across asset classes, across sectors, i think that quality bias in factors will define leadership more than things like sectors or even countries. tom: in the time we've got left with you, with your public service in the bush administration on fiscal policy as well, house troubled should our listeners and viewers be over the size of these deficits, the rapidity with which we have seen these trillion dollar deficits? liz ann: i think we should be troubled long term. ers right now. there doesn't seem to be much concern about this. i don't view this as a data bubble bursting -- as a debt bubble bursting. i view this as a simmering crisis over time because of what has been shown not just in the

united states, but anywhere around the globe. a rising burden of debt, even if it doesn't cause a moment in time crisis, it is an impediment to an economy being able to grow at a robust pace. we also droid -- we all economicd the longest momentum and history, the recent one, but it was also the weakest. a no rise interest-rate environment, just increasing the debt at the pace we are means that interest payments, even in a flat yield environment, start to really swamp spending on anything else. i think it is absolutely a long-term problem, and the effective it is a slower pace in growth then what would otherwise be possible. tom: liz ann sonders, thank you very much. this is really what we have tried to do all of this week, is give you differing opinions on fixed income and equity as well.

francine, i thought james ath interestingy about he doesn't want to be in europe. francine: he was actually quite scathing, which was interesting because many analysts and fixed income specialists we have been speaking to thought that the e.u. recovery plan was a real game changer. but he was saying if you look at the economic patterns, and i guess this has been validated with the unexpected pmi figure out of france this morning, it could be more difficult ahead. -- you have difficult economies, especially with the year ahead. tom: it is a simulcast on bloomberg television and bloomberg radio. oner on radio, gene munster

any number of techy topics. maybe we will talk about cupertino. futures deteriorate 11. gold, $1926. i'm getting crushed. good morning. simulcast. ♪ ritika: -- duty to protect americans. the night, biden accepted democratic nomination for president and made clear what a biden administration would tackle first. thebiden: as president, first step i will take is to get control of the virus that has ruined so many lives because i understand something this president hasn't from the beginning. we will never get our economy back on track, never get our kids safely back in schools, never have our lives back until we deal with this virus. ritika: biden also said the u.s.

doesn't need to reward wealth more than it rewards work. he says it is time for the biggest corporations to pay their fair share. secretary of state mike pompeo requested that allies we impose sanctions on iran. president trump says that this will be the most fraudulent election in history. he told fox news, "they are election."teal the he says that mail-in voting will lead to widespread cheating, even though there has been no evidence of that in previous elections. actress lori loughlin and her husband appear to be headed for prison. they will be sentenced today after paying $500,000 in bribes to get their child into college. the scandal showed just how far some parents would go -- some

wealthy parents would go to get their kids admitted. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ m ritika gupta. this is bloomberg. ♪

>> valuations tell you nothing about what the market is going to do in the next six or 12 months. it is really an indication of longer-term trends.

tom: dan suzuki there, very good with the mathematics. thrilled to see him making comments as well. to set this up, sarah hall's halzack with us of bloomberg intelligence. francine lacqua, very active in the london fashion scene. what was it like just before the pandemic to see the lastgasp of luxury fashion? francine: when you say very active on the fashion scene, it is basically very actively trying to get an interview with the burberry chief executive. that is not quite come through yet, but we persist, so we go to the catwalks and try to get a bit of time with him to understand some of the nuances behind these luxury numbers.

it was in february. it was interesting because it was in the west end, and at the time one of the first really big shows because burberry, because it is a listed company, puts on a pretty big show, but is also a money spinning. it was also one of the first one or chinese buyers weren't there because covid-19 was really rampant in wuhan. the big question amongst the financial analysts at the catwalk was what are we going to do without the chinese buyers. then you fast-forward six months , and actually there were no buyers at all. the last catwalks were in, and if you -- were empty, and you wonder how big a hit some of these companies have had. tom: extremely well said. that brings in our expert on this, sarah halzack. it is a textile business. what is the crisis in luxury

retail right now? sarah: it is definitely bad, but also that luxury is an industry that really depends on tourism. clearly, that has just been decimated by this pandemic. you think about a company like tiffany, their fifth avenue flagship store is frequented by international tourists, and that is a huge portion of their business. so without that in place, there's a lot of questions on how they are going to grow sales. i think another interesting one we saw this quarter, procter & 2amble, they own the sk skincare line, which has $300 ums and that kind of things. airports are a huge source of business for that brand, and there are no people walking through airports. tom: is this survival of the fittest? 18% keeps doing better, up year for the last 10 years. do the bigs win?

sarah: i think the bigs do win. it has some advantages in that it is not just concentrated in fashion. it has still continued to move in some sort of way, but clothing across the board, whether we are talking luxuries or mid tier, is just going to be a tough sell for a very long time, especially when we are talking high-fashion. buy with a particular invent in mind. vacation, going to prom, go into -- tellinging to a, -- going to a wedding, going a. a gal francine: you are breaking my heart. we don't need a new coat just to walk into the kitchen? [laughter] are we seeing too many luxury groups?

is the consumer confused? do we need to have some of them go bust? sarah: i think this is going to be a time of shakeout's certainly across-the-board, whether we are talking luxury or lower tiers. clearly there's not going to be enough consumer demand for all of the products out there, so i think we probably will see some smaller groups fail, or it is possible we could see some consolidation. clearly, luxury is the space where that kind of dealmaking happened sometimes. francine: what happens to the chinese buyers going forward? if we are traveling less, who survives? it is the -- is it the company's less dependent on china? sarah: i think it is probably the companies that are the most diversified. that has always been the kind of psychology behind these luxury groups being conglomerates. that's the reason why the u.s. companies like tapestry, the company behind coach, has tried

to diversify. it has exposure to lots of different geographies in different product categories so that whatever happens with the economy, they can indoor it -- they can endure it. tom: i looked at nordstrom's stock chart the other day, and it is beyond graham. -- beyond grim. how does the department store handled the next 24 months of this new digital dominant? sarah: it is going to be extra nearly difficult, but i focus on online is their best bet. nordstrom is pretty strong on that front, and has been good about rolling out things like curbside pickup, which obviously amid safety that, concerns around crowds, is an effective way of courting consumers. but no matter what they do, it is going to be a really tough holiday season, and malls in

particular are going to suffer and have a really low foot traffic. tom: see you on the roadway. sarah halzack, thank you so much. we've got a deteriorating tape, -15, dow futures -119. , $1.30. comes in what is the research into this weekend? aancine: remember, just couple of months ago the bank of england said negative yield is not what we want. then gradually, because of market pressure, i think they had to come around, saying they are not ruling anything out. at the last bank of england meeting, it was whether the governor was suggesting that if you look at the cycle, we have to time it wrapped. -- time it right. so to say we will go into negative rates may be better timed when we are going up

rather than in a downturn. we have the complexity of exit -- of brexit. both sides said talks aren't coming great. that may add more uncertainty to the u.k. economy, and that could push the bank of england to negative rates. but from what i am hearing, they don't want to do it. tom: really the theme of the week, as we continue and have guests at drive forward this conversation, the tea leaves and the size of flatness, i don't want to be gloomy and say recession or anything worse than ness of thehe tepid economic data across all of these nations, really exceptional. i want to do one story from earlier in the week. turkish lira want out to 7.40. certainly mr. ed one has had a better week -- mr. erdogan has had a better week. lira into turkish

the weekend. , was aup with invesco more complete macro view, brian levitt will join us. it is a simulcast on bloomberg radio, bloomberg television. this is "bloomberg surveillance ." ♪

>> you are seeing a lot of divergence within the market in terms of valuation. >> there is a disconnect between what is happening in public equity markets and what is happening on the ground. >> the worse the data looks, hopefully the more impetus for fiscal stimulus. , we got got less supply demand being stimulated, and that should lead to higher prices. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. it is a simulcast on bloomberg radio, bloomberg