500of the bottom, the s&p up 51% off the bottom. the difference is american digital dominance. there are sure signs of inflation. lumbar in america a moonshot. iron ore in china, a moonshot. to get to the "incomplete recovery," look for sustained unemployment. and virtual trump will be different from virtual biden. pham, trump junior tonight, then the first lady, then mrs. eric trump, then mrs. kushner interviewing -- introducing her father. this is "bloomberg surveillance ." anna edwards is in london, in for francine lacqua. i looked at the death statistics of the pandemic, and the success of the united kingdom is absolutely extraordinary. the way they have brought down deaths from the pandemic is just

superb compared to america, and frankly, many other countries. can you feel that in the nation? is the nation aware of the success of that? feels very different, i have to say, tom. bringing them down is one thing, allowing them to spike up in the first place is another. and a lot of criticism around the govern how it handled the initial stages of the outbreak, and in particular the care for the elderly, allowing it to take off the way it did in care homes. tom: it is interesting to see and we will be covering this throughout the week, from johns hopkins university as well. this final week of the summer -- in america, late labor day, september 7. so it is sort of an odd and to the summer at least here in america. right now on monday, here is ritika gupta. from recovered patients

will be expanded to more sick americans, access to the promising therapy even before we fully understand how it works. the financial times recording that the white house is considering crosschecking the oxford astrazeneca vaccine. epilogue aide is leaving the white house at the end of the month. kellyanne conway, the first woman to managing a presidential campaign, is quitting to spend more time with her family. she says the two may disagree but they united on what matters most, their kids. and the u.k., boris johnson is urging to send children back to school next week. as concerns grow among teachers and union officials that it is not safe to do so, the government argues that the risk to a child's development is greater than the risk of the coronavirus. league, finalever

only a fewends -- hundred people were allowed in the stadium due to pandemic resurgence. psg has yet to list the european cup this binding -- despite sending players -- francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. -- global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, i retake gupta. this is bloomberg. tom: thanks so much. it is an a store in a 2020. we have never seen a year like this. it is an extraordinary august, and be only equivalent to the trauma of 1998. with it is a swirl, back-and-forth, of all the data, particularly looking over the weekend of the inflation dynamics. futures up 23, a surge here. a continuous -- a continuance from what we saw friday. tips,r tips, just the

negative one .00% as well. dollar churning as well. what do you have on the data from this morning, anna? anna: i bring you on the upside on my data check this morning, tom. stocks in europe flying up by only 2% in these markets. the cac and the dax up by 2%. sentiment,a mixing the listing holds 30% or so, so when we see better talking between the u.s. and china on tech, that has lifted $.10 in hong kong, but astrazeneca in as well because of the story over the weekend that suggested perhaps we will see earlier than previously thought approval for the vaccine from astrazeneca and oxford. lots to talk about this morning. lot that we had a have had lots of talks -- we have had lots of talk recurrence over the weekend, folks.

whorategist and economist melts both things of that, our guest to start us off strong on a monday is one of those guys who is a strategist and an economist at the same time. absolutely, so let's get to peter dixon, commerzbank global equities economist. peter, good to talk to you this morning. lets talk with european stocks. tom mentioned this at the start of the program. european stocks far behind u.s. stocks when you look at year to date performance. obviously that has a lot to do with tack -- with tech. can europe catch up? peter: probably not, i think is the answer. index.own to the if you look at the ftse, for example, it is overweight banks, it is overweight energy, both of which are sectors that have struggled relative to tech, and it is unlikely that we are going

to see any great turnaround anytime soon, and i think that aztec has been soaring into the -- as tech soars into the stratosphere, the tech heavy indices and the rest of the world, if you like, will continue to widen, but it is probably fair to point out that the performance of the european stocks is probably more representative of the sort of average corporate performance, if you like, than the s&p, because it has been driven by effectively five stocks, which is shooting into the stratosphere. that is not representative of the pain that many corporate's are feeling right now. ana: do you have a sense of catalyst that could change the path for tech dominance, peter? is a vaccine -- more news on the vaccine, is that going to dethrone tech? peter: good point. it could be one of the things that cause the market to catch up. i don't think it would d3 and

tech in that sense. i don't think there has been a significant shift in the language. we are going to work in future, and that will be embedded in tech value for a long time to come. so long as the tech sector continues to post additional earnings growth, more or less in line with expectations, the market is expected to hold up. i don't think there is anything likely between now and the third-quarter earnings numbers, which is going to destabilize that. of course, there is always the roundup of tech, and that is what we are concerned about. tom: one of the great things i saw over the weekend was raging debate over inflation, clear and short-term inflation due to supply shocks -- lumber, iron ore, groceries, and we all see it at the grocery store. what is the medium-term outlook? do you suggest new or pernicious rising inflation, or will it be one be -- one big fake

medium-term? peter: i think my view on inflation is that it is going to be very difficult to generate much inflation in the medium-term, largely because we are not going to see much wage growth. in certain markets there are shortages which are leading to short-term price thets, and things in short-term commodity market for sure. it is going to be relatively high unemployment compared to the past, that is likely to continue to depress wage inflation, and that will spill over into price inflation. i think central banks will likely continue to struggle to get inflation back to the 2% target for some time to come. tom: how big is the supply disruption right now? we look at the price of lumber, which is a moonshot. do you think that the supply disruption theme is valid?

peter: definitely. i certainly think it is a big story. --cdotal evidence yes you anecdotal evidence -- you go online shopping, and the huge range of products that existed prior to the pandemic really no longer exist. small rangeuch more of choices come and that is reflective of the supply disruptions that we are facing. it is going to take some time before a large number of companies can rebuild an inventory. i don't know how long that is going to last, certainly it is not something i would expect to see normalize very quickly, and over the course of the remainder of this year, that normalization process will likely be a fairly slow one. anna: do you think the fed has to rethink and will rethink a source on inflation targeting this week, or will we have to wait until september for that? peter: i think this is a

long-running story. i think basically the fed is probably going to have to rethink what their monetary strategy will be in the medium to longer term. in the short-term, they have done a great job, they have pumped the markets full of liquidity as they probably can, and they would say they can do more. but in the longer term, and this goes back to the inflation story, the question is, do they think high inflation is going to be a problem in the future? i suspect the answer is that they think it won't be. maybeng the price that -- not immediately, but certainly for the longer term, i think this week might see the first discussion about that, in which they target price levels rather than single year inflation rates and what that will mean, as in the medium-term they may be prepared to allow inflation to overshoot the target, if we get to that position, rather than combat it with tightening outtary policy, averaging

to 2% over the cycle. tom: peter dixon, thank you so much. as commerzbank. he will continue with us this morning. as we look at the republican convention plans that we will see through the week. lots to talk about there, certainly. of work onand a lot quantitative strategies, really tying and wonderfully to ebs g. that is a wonderful update in the second clock hour. up 23, the vixs 22.69. this is bloomberg. stay with us. ♪

."m: "bloomberg surveillance good morning, everyone. tom keene in new york, francine lacqua in london. dixon of comer bank -- of commerzbank as we look at equities. one of the things that we notice this morning in risk on, risk on, yields don't go with it. are yields and equities linked right now? i don't see yields driving higher, as you would expect amid a risk on field? peter: it is true. if you look at what is happening to the bond markets overall, they seem fairly static. we are in a comfortable position where they are being supported by government purchases, investors are still key to getting involved, but they are not driving the price higher. or indeed lower. we have a stable yield

environment, a stable discount back to work off, and i think that given the markets expect yields to remain low for a very long time to come, as we get more clarity on earnings numbers, it is likely to drive equities a little bit higher. tom: this is an important insight, folks, the idea that equities are driving higher, and, you know, not just tech but equities in general. but we are not doing it within a higher yield regime. what happens, peter, if we get to a higher yield regime? about ok, we are talking distribution, but it is not impossible. there, and i guess it depends on how much higher yield you are talking about here, but if we start to see a significant rally in yields or selloff in bond market, we start to see investors i think looking a little bit more askance at the equity market. one of the reasons to continue to buy at the moment is that we are getting decent dividend

yields. certainly the 10 year yield. i think that would certainly be sick efficient -- sufficient to take the edge off the equity market. not an outright decline, but it would take the edge off. i don't think we will see any action from central banks, which has upset that particular picture. the only thing which might change things is -- and this goes back to your previous point about inflation -- is if we see a large pickup and brought inflation. that would change the picture for the bond market. but again, it would also mean that selling points would go up as well. it might also support equities as well. it might not change the picture as much as you think. anna: talk of where inflation and illness go makes me think about where the gold price is going to head soon. clearly it has been a strong haven during times of crisis, but it is stronger today. some of these equities markets are up by 2%, yet gold prices go

higher. does it suggest there is more of a liquidity role for gold prices? they are pretty liquid, so people don't necessarily buy and sell them as a haven, but more because it is a liquid place to put money? peter: certainly that is possibly true, and i think a thee chunk of the -- in first half of the year was driven by etf buying. obviously that enhances liquidity in the market. i think we are in a situation where investors do need to have some form of diversification. going back to your point, that is enhanced by liquidity, but if we look at a marketing which equities are going up, it is great. you need some opportunity of assets. have pretty much zero opportunity of holding gold, and it makes sense to diversify the gold mark a little bit. it is not necessarily going to give you a huge lift where we are now, but it adds a little

more certainty to their portfolios. about thingsnking that move the gold price. another when i did not mention is the dollar, peter. we have talked a lot and the last week or so about the weakness in the dollar and what that means. are you somebody who believes that we have questions to answer about dollar dominance, about dollar as the global currency, or is that a red herring? actually dollar dominance is here to stay? peter: this theme comes up periodically every time the dollar goes into a bout of week is. -- of weakness. most of the time we look at the dollar and think there are good reasons why the dollar may not be as dominant in the future as it has been. but i think we have got to be careful not to conflict the dollar's position with general market sentiment concerns regarding the trump administration, for example. that could easily dissipate over the course of the next three or

four months if joe biden is elected into the white house. and that of course i think there is a lot of -- there has been a lot of positive sentiment to the euro, finding a deal that provides support to weaker members of the euro zone. but don't forget that the is not monetary union only, it is a collection of sovereign states. that is not a guaranteed recipe for stability. thinking that there might be concerns of the dollar's dominance, i think it will be the primary currency for a lot of time to come. tom: peter dixon, you are an economist and you work for a bank. so let me ask an unfair question to an economist and an unfair question to someone working for one of the world's great banks. dollar go, and is

it part of one of the world's unfair traps? peter cook the dollar has sick -- if you look across the bank universe, clearly banks look undervalued. i rather suspect that over the course of the coming years, as banks start to address the cost problem, particularly in europe, you will probably start to see a significant rally, maybe not significant, but you will start to see a rally and banks. they look attractive on many grounds, certainly an attractive reason to want to buy them. but i think investors are justifiably cost us -- cautious. becky has not moved as rapidly as many investors would like to see, and there are more -- backing -- banking has not moved as rapidly as many investors would like to see come and

certainly there are reasons to shun them. but you may find that it turns out to be a good trait, but it will take you five or 10 years to find out. anna: peter, thank you so much. peter dixon, commerzbank equities economist. later this week, follow bloomberg for our later coverage of the jackson hole symposium. jay powell will be speaking at that event on thursday. it will be a lot more virtual than it is usually, but it will be taking place and we will have coverage. this is bloomberg. ♪

ritika: this is bloomberg surveillance. goldman sachs expects almost a quarter temporary layoffs in the u.s. to become permanent. it says some 2 million could remain unemployed well into 2021. while the transition rate from temporary to permanent layoffs remains historically low, the figure nearly doubles june to july. saudi aramco has reshuffled its senior management, putting it in charge of portfolio optimization, as the biggest oil producer adjusts to lower crude prices. saudi aramco says assisting assets and boost assets to increasing the market. data.a quick check of the we are stronger across the

european equity markets. there is risk on in europe. the cac and the dax by only 2%, tom. affecting travel and leisure. tom: last week the democrats, this week the republicans. this week president trump. leslie vinjamuri will speak with us about the republican national convention, most of that taking place at the white house. leslie vinjamuri next. this is bloomberg. futures up.3, dell -- dow futures up. there is no red on the screen. this is bloomberg. ♪ you doing okay?

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transfer your service online in a few easy steps. now that's simple, easy, awesome. transfer your service in minutes, making moving with xfinity a breeze. visit xfinity.com/moving today. tom: good morning, everyone. "bloomberg surveillance" on a monday. anna edwards in london, tom keene in new york.

upuge mauve -- a huge move here. londonn on a monday in with leslie vinjamuri on the republican national convention. it will not be held in a big arena like the democrats. it will be very virtual, but it will also be very, very different than what we saw last week with the democrats. leslie vinjamuri has a real nice sense of history here as well. at this convention, is there a republican party? know, you ask, as always, the right question. is there a republican party and who is it, but also, where does this republican party go after november depending on the outcome? the republican party does not look much like it will have all four of president trump's children very much part of the show. it will have nikki haley, who

has been in the administration and is now part of the party, but who we think of as being the long members of the republican party, we were at the democratic national convention, and every single night we will see president trump for a full hour. he will accept that nomination at the white house with an audience outside thursday evening. very unusual. tom: what is interesting here, i read joshua greene, a wonderful reporter from bloomberg businessweek. steve bannon going back to the national unionist party of abraham lincoln, and then we look to the bush set of presidents, and then we go on to mitt romney and his efforts as well. where do those people go if the president wins? well, i think this has been a real question for so many

long-standing republicans, where does it go. what we are told is that there are probably 60 republicans in congress who do not quite know what the president has been doing -- you know what the present has been doing the entire time but have probably been quite. and the republicans have been very vocally against the president, and where do they go if president trump is reelected? i think that there is going to whetherderation about they really back the democrats. what we saw last week at the democratic national convention was vice president biden trying to really be the party of unity across young come across old, across different demographic sections of american population, but also across republican and democrat. as we head to the beginning of the republican national convention today, we see a president who is on the back foot electorally, he is down in the polls, the economy is down,

he is grabbing for straws to say that he will get a vaccine early, cutting corners on fda heulations, announcing that will use certain therapeutics. but he is really on the back foot, and it is very unusual for the incumbent president to be approaching an election in this way. morning from good london. let me ask you a bit about the trump andoters that the republicans are going to be trying to go after this week. are we going to see them attempt to reach out to new groups, two groups away from the base, or is it going to be about trying to consolidate to what they previously had? leslie: there are two things. one is clearly that president trump will be on stage on live television every night, rallying his base, making sure that they are enthusiastic, that they turn

out. but there are a couple of things that they are trying to play for. one is the suburban women, driving forward of this picture of america, that people are protesting in the streets, about a lack of law & order, and that president trump will be the face of law and order. there is a play i think for the asian-americans, especially indian americans, nikki haley, speaking. there's kind of a tussle between kamala harris and nikki haley and a question of whether that demographic can move. and then if you watch the very unusual secretary of state, mike pompeo will be speaking. the controversy over the american embassy being moved from tel aviv to jerusalem, according the event of -- that evangelical base has been very important to president trump,

and he has done things that cannot fit comfortably. if you go back to family separation and any number of policies that are challenging and have -- we have seen moments where they have begun to peel out, but i think rallying that base by speaking from jerusalem is something that the president is displaying. whether he can move new voters, independent voters, very uncertain, but this is really all about trying to do that. anna: how will the u.s. economy and the plight that it faces play into this? usually the u.s. economy is quite high on the list of things playing there, but has been overshadowed by the virus this year. leslie: the election is about the pandemic, the pandemic, and the pandemic, and that means the health crisis, the economic crisis, and also the social unrest that has driven across america that still continues today.

goingent trump is i think to -- it is a very difficult play to make, but he is going to try to make the claim that the only way to get the economy back on track is for him to lead the country out of this current economic crisis. he will paint the democratic party as a party of the left, is socialist party that will erode his tax cuts, that will remove them, that will raise taxes, that will and at policies that are costly. and i think that is a line that he will be trying to drive. the difficulty is when we have millions of americans out of work and no clarity on a national plan for recovering from the virus. it is a very difficult play to make. tom: one final question, and i give this to you with our international audience in mind. when the president talks about -- deep state, what exactly

what is that? leslie: i lost you just for a second. tom: what is the deep state? define the deep state for us. leslie: we have been talking about the deep state since president trump was elected because it has always felt like the civil service, the executive branch. those employees who have worked their entire lives in the cia, the fbi, across the government are against him, that they are trying to keep america going in the same direction despite his effort to change things for the better, as he would say. he has always felt that the washington establishment, what ben rhodes calls the blog as well as the deep state, is pushing back against them. during his time as president to play the outsider. it is difficult to do when the

white house is in charge, making policy for four years. tack thats still the he is taking. tom: terrific briefing. leslie vinjamuri with chatham house. really quite good. with the news in new york city, our first word news, here is ritika gupta. ritika: the european union's top trade negotiator is fighting to keep his job. callis after attending a society dinner in ireland. after saying no events should be organized at cafes and restaurants. he has been key in trade talks between the u.s. and the u.k. the u.s.ack cuts at postal service after changes -- an additional $25 billion has been allocated, but the social service is concerned about some of the -- the postal service is

concerned by some of the requirement, saying it restraint its ability to reduce efficiency -- to improve efficiency and reduce costs. president donald trump's sister is heard criticizing her brother, saying he has no principles. the former federal judge was secretly recorded by her niece, mary trump, who recently released a book denouncing the president. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm ritikauntries, gupta. this is member. tom: thanks so much. a virtual democratic convention, a virtual republican national convention. virtual david westin, with davis or really tonight. really looking forward to our republican national convention. heard from dr. venture murray. it will be original, to say the least. injamuri.ntur

it will be original, to say the least. stay with us. this is bloomberg. ♪

anna: i am anna edwards in london, with tom keene in new york. the president of belarus, alexander lukashenko, is facing more pressure to resign. tens of thousands protested in the capital this weekend. russian foreign minister, sergei lavrov, accuse the opposition leader in belarus of harboring an anti-russian political agenda. joining us now is torrey clark in moscow. seems to behere quite a lot of voices in this, trying to keep other parties out. trying to make this an entirely

russian affair, trying to not have foreign powers intervene on either side. to what extent is that likely to last? torrey: hello. ofarly, the president belarus, alexander lukashenko come is trying to make this into a larger geopolitical issue, trying to play to the west. russia iny to bring support against the opposition. in general, it started out fairly domestically. it was a protest movement against the president. the opposition side has not russianny strong position. they said they are interested in changing the government, working with -- that you seethink

any signs that lukashenko is on his way out by any -- by whatever means? to tell right now, he is still in power and he remains in power. the opposition has been peaceful, the protests are very large. one area that is key to watch is -- can theyr unions draw together, and force a nationwide strike? or will lukashenko be able to keep them splintered and force state companies to continue working? tom: tom keene in new york. good morning. what i find interesting is the this guy.of how alone is he, and how does mr. putin adapt and adjust to his loneliness? lukashenko has one main

ally, and that is russia. he has failed to build up alliances in europe, or chosen not to. drawn censureve and sanctions at times from the of. and europe, so in terms who can he turn to, it is russia. so what is the determinant or this guy to keep him out ring somebody in? what is the single factor that matters to mr. putin? the main buffer still standing, one of the last serving republicans that stands between russia and the european union and nato, belarus.

that -- thate few said, lukashenko has also turned against russia at times. cantankerous, and very fierce about independence from russia, and has accused russia of meddling. earlier this year he was turning against russia in the run-up to the election before he -- he has told russia that if russia doesn't support him right now, then european forces could charge through and end up attacking russia. images of theseen president of belarus, dressed all in black, in a bullet-proof vest, surrounded by special forces, trying to portray himself in a very strong position here. how high do we think the bar is

for russia to come in and support him in this act? do you think the bar is pretty high, actually, for russia to get physically involved on the ground? far, while russia has definitely come out with rhetoric supporting lukashenko, and demanding that there be no external meddling in the country's affairs, there has been no sign of the russians actually sending in physical support. that would be a major step. we have seen how that played out in ukraine, and that has led to , and ans against russia economic and political hit against russia. tom: torrey clark, thank you so much. certainly europe is riveted by this. bitunited states, it is a off the radar. nevertheless front and center,

particularly with the nato story on the eastern european front. we will advance this discussion. ian bremmer with us in the 8:00 hour. it will be a good time to catch up with dr. bremmer, a number of themes including the secretary of state speaking to the republican national convention, speaking, i believe, from jerusalem. stay with us. you need to know risk on, futures up 25. this is bloomberg. ♪

ritika: this is "bloomberg surveillance." some of alibaba's biggest investors have invested billions of dollars of u.s. shares in hong kong stocks come in part to avoid u.s. actions and the delisting of major chinese tech companies. prompting investors to take measures to avoid the fallout. china's banking ringleaders leaders have pledged -- pledged hong kong as its banking hub, recommitting to opening the chinese banking sector. the comments came during a deepening standoff with the u.s., forcing global banks to walk a tight rope between the two world powers and competing

roles. that is your bloomberg business flash. tom: thank you so much. we need an update from christopher ailman, chief investment officer of a giant pension fund. he is looking at the giant headache which is tech to the moon. let's listen. christopher: we have to add a key in there for tesla. those are doing well because of covid-19, and eventually we are going to solve this health crisis, and then there is the question of what happens on the other side. i think dave wilson's chart of the day -- eight shout out to he -- a shout out to him -- said apple and microsoft -- thed are bigger than 1000 largest stocks, look at value and growth, you are going to go back to levels we saw in 1990. and one of our managers, it at

-- when me -- sent me you look at price-to-book, filter price, these are things that tom keene used to loving the old days with me. those measures, the u.s. and the world, the u.s. is at 90% of valuation. at some point you will have a huge reversion to the mean. probably not -- it can stay and persist for a while, but at some point with the health crisis is solved, we are going to go back and shop at other places and amazon. we continue to use microsoft like we always did, but you will have a reversion of the mean, and that is going to be painful. note, though, it is interesting, chris. that growth has been outperforming value. we keep talking about this value trade back into it, and yet it has been painful that growth has continued to be the outperform or. do you see growth extending

those leads overvalue? can seeher: taylor, we the extreme move for a long time and that is white has been painful. during the last 12 months ending in july -- that is why it has been painful. during the last 12 months ending in july, small cap growth had a positive return whereas small-cap value had a negative return. howi think diversification, do we protect a plan like ours? you diversify. you don't just load up in those same names, you diversify in other areas. him of the non-u.s. markets are actually doing ok, relative to the usa, and in our case we are going to be in real estate, we are going to be in fixed income, we are going to be in other strategies besides just local growth, so everybody out there who's got a 401(k) needs to step back and look at asset allocation and not just stay in the large-cap growth names. they could run for a while, and again today, hallelujah, they

are up again, but nouriel roubini, while he is always negative, is not always wrong. this market is well overextended, and it is already flashing signals, traditional signals that tell us it is not sustainable. about -- i talking am interested, chris, in your perspective. you are just saying that perhaps it is time to look outside of the u.s., but we have a slowing in momentum in terms of pma i coming out of europe -- of pmi and downward trajectory. andmi coming out of europe downward trajectory in australia. how much of the dollar is used abroad? christopher: in our case we are a big global investor, so over half of our portfolio is always in the usa, we are looking at when is the right time to go overweight, developed markets outside the u.s., and eventually emerging markets. now, we could have said emerging

markets have been undervalued for almost two years running, but there are going to be some opportunities. once you're are out of the the market is going to struggle to go higher. but you really do need to look at diversification and be more global in your portfolio. the concentration in these names from all the traders, those people came in and they are going to leave just as quickly. ailman, with ar view on institutional money. coming up with a view on the fixed income arctic, james karen, morgan stanley. look at that. this is bloomberg. ♪

of: this morning, the surge

last weekend continues. the ftse up 22% off the bottom, the american s&p 500 up 51% off the bottom. the difference, american digital dominance. there are sure signs of inflation. lumbar a moonshot. , a moonshot. iron ore, too. and virtual trump -- he will be different than virtual button. lose the zoom, bring in the fam. eric truck tonight, than the first lady. then mrs. kushner introducing her father on thursday. good morning, everyone. this is "bloomberg surveillance ." tom keene in new york, anna edwards in for francine lacqua in london as well. tell us about the prime minister's august. what is pride minister johnson doing here? is he virtual or is he out there? anna: