the stock market plunges. this tuesday brings not relative calm. the u.s. dollar breaks resistance. the u.s. dollar surges stronger. when is ated kingdom, shutdown not a lot down? you will be able to catch the virus before 10:00 p.m. at the pub of your choice. the chief medical officer considers march 2021. mcconnell in kentucky goes radio silent as schumer looks for "the end of the supposedly great deliberative body." good morning. this is "bloomberg: surveillance." justice ginsburg, the battle over the supreme court come the united states economy, none of it matters. francine, explain to our american audience the significance of a 10:00 p.m. pub closing. first, there is a lot

of significance in what is happening. i just want to make sure every audit -- i just want to make sure everyone understands that. if you look at the markets, there is the election uncertainty. in the u.k., we are being briefed by the prime minister at that :00 p.m.. it has been a long time since it we have been briefed. we are expecting him to announce measures such as closing of restaurants at 10:00 p.m. why not catch the virus at 8:00 p.m.? cut -- to the deli delinquent way of not crushing hoursnomy, but avoid the of drink and cocktails when you do not social distance as you should. tom: if i want the yorkshire

the last sitting is 6:00. is that what you're telling me? franciene: 7:30. you are right. settings, one two at 7:30, one at 9:00. it really crushed the restaurant market. tom: there is the most important information today. [laughter] here is ritika gupta. ritika: the u.k. government is telling the public to work from home if possible. it comes alongside new restrictions for bars and restaurants that will have to close by 10:00 p.m. the prime minister is holding a meeting this morning before briefing parliament. he will then make a broadcast to the nation at 8:00 p.m. the u.s. and china are staying on the sideline of a vaccine packed. the initiative to declare a

vaccine all around the world is moving to the next phase. over 150 countries and regions including -- regions are taking part. the goal is to have 2 billion doses available by the end of 2021. you efforts to put pressure on president lukashenko are on pause. dozens of officials -- bubbles up over how to handle turkey's energy claims. signhenko has refused to desiccants belarus unless there was an eu blacklist against turkey. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. tom: thanks so much. let's look at the data here. carnage yesterday. what an abrupt shift.

2:47 p.m. is what they tell me. futures have done better over the last two hours, up three. vix comes in nicely, 27.66%. i am going to focus on dollar dynamics. the dbx index 29.69 is a huge deal. sterling under 20 it gets my attention. franciene: mind too. -- mind too -- franciene: because of the escrow restrictions that will be put in place, but overall it seems tacked -- tech shares are living this rebound. treasuries are down. tom: to get into discussion here in washington after all we did monday. the death of ruth bader ginsburg. kevin cirilli joins us. i think the washington post bear the headline.

paul kane did a wonderful article saying democrats are powerless. are they? >> no. i think, from the sense that they have the ability to jam the clock on the floor of the house, that could put severe implications into the senate. beyond that, they have outside progressive groups in an election year. i spoke with democrats who said do not count out speaker pelosi's ability to master the clock. as it relates to the house putting pressure on the senate. a contrast, i spoke with senior republican strategist for the senate judiciary committee who has worked on all the president's nomination processes, including brett kavanaugh. he said the judiciary committee is fired up. whereld have a situation in the morning there is a hearing, a confirmation hearing for the supreme court and in the evening there is a debate for the presidency.

this is a remarkable confluence of events. we are on a collision course. rick davis said we do not know whether or not which base is going to be more activated. tom: does money matter? i refuse to believe money matters here. lions of dollars the democrats raised, does it matter? >> i think it does. mail-in voting, the educational push about mail-in voting is read matters. secondly, the onslaught of attacks that have been lobbed against both candidates. lastt to note within the 12 hours, we have new data that has come out. reuters, we have a wisconsin byl where joe biden is up

4% to 5%. in pennsylvania, biden is up by three points. within the margin of error -- within the margin of error in pennsylvania. on withe: what is going the appointment of a new chief justice? will that change the pulse? polls? >> the frontrunner match with president trump through the kavanaugh proceedings. she has been a favorite of catholic conservatives for some time. it is too early in terms of whether are not -- whether or not this is going to affect the polls. this is going to ask at base of the republican party. elizabeth warren saying she is going to fight this in every way. this has mobilized the left too. franciene: what about republicans, will they vote for it? is this too much of a gamble that could backfire? >> i do not think they see it as

a gamble at all. they see it as the reason they were able to win majority in the senate and the reason they feel president trump got to the white house was because of the evangelicals who put him there who thought he would appoint judges. one ofcconnell has said the hallmarks of his political legacy will be judges. republicans feel this is a huge part of their governing responsibility. tom: help me with mitt romney. we've got two senators who have stepped away. i know there is another account of two or three. to me, romney is a delicious mystery. [laughter] what is his thinking? >> i talked with sources and romney's political orbit. i think he has inherited the

john mccain maverick role. i think detractors would say he has inherited the jeff flake rule in the senate. to balance of the republican party. i think he enjoys that. he is a crucial vote. you've got mikulski and colin said romney in the mix, he has got a lot of power. tom: what are you looking forward to today? >> fiscal stimulus. when you look at the onslaught of poor economic data that has dripped out of wall street, does the scotus pick drown out stimulus? it is looking like it will, but we do not know. franciene: thank you so much. kevin cirilli. coming up on "bloomberg markets," jay powell and steven mnuchin testify to the house financial services committee. live coverage begins at 10:30

new york. this is bloomberg. ♪

tom: francine lacqua and tom

keene. today, markets quieter than yesterday with nice rebounds. futures flat. nasdaq gives me a bit of a lift as well. we have been distracted by other issues. -- russt rich joins us koesterich joins us with always interesting research. i want to turn the tables off of equities and bonds and go to the dollar strength we have seen. you have been out front on this with the resiliency to the dollar. is the dollar going to be our october surprise? >> it is possible. goodw yesterday old-fashioned safe haven buying. we have not had much of an excuse for that over the past months, but you are running out of hedges. people are looking to the dollar. when you see risk aversion, it worked yesterday. hedges thatother

allocator's rely on when you talk about duration has not been effective. tom: what does the liquidity, the depth of the dollar market and the resilient dollar mean for multinationals in the by the u.s. big guy serious? >> is this a one-day event where markets selloff and investors flee to the dollar, or is this a countertrend to the last few months? there is little doubt that when you have this period of dollar beginning on the back of unprecedented easing by the fed, this is pro risk. it is health equity markets. it has been a defective form of music financial conditions. if the dollar were to go into reverse, if we saw a long period of dollar tightening, that is going to take becky easing -- that is going to take becky easing the fed has been working at.

tom: -- franciene: what does it mean for fx? when you look at the new phase for central banks, what will move the most in the fx space? >> what we are trying to think about or what are some of the more convex expressions? this is unprecedented. all of the world's major central banks pegged at zero and are likely to stay that way. one of the main tools you would like to come rate differentials, or not giving you the same signals. fx volatility, while it has picked up is still somewhat muted. if you are looking to currency as hedge in the portfolio, what are the mower convex expressions -- what are the more convex expressions? we are looking at the mexican peso, the australian dollar, the japanese yen. some of these tools are going to

become more important in an environment where you do not see much volatility from the rates market. franciene: you already see something priced into the market when it comes into the election,, or do you think volatility will come closer to november 30 echo >> -- november 3? >> you are starting to see a bit of a sign. one of the places i see that is sector performance. the last three months or interesting. everyone has been focused on the rally and check of a tech bubble. the best two performing sectors in the u.s. have been industrials and materials. classic cyclical centers, not financials. that is indicative of a higher probability of a democratic sweep. why would you buy cyclicals? texas might go up. to see also likely

ifge fiscal stimulus package democrats take the presidency and the senate. those are the stocks that would benefit in this scenario and that is starting to creep into the market. tom: there is a rumor you have an understanding of the bloomberg terminal. if i go in there and look at u.s. banks, particularly the european banks, they are at bargain valuations on book value. what does that mean to you? >> european banks got hit regardingon concerns their behavior, but i think the bigger issue is two fold. spokenwhich, we have not about this in the past is the rate story. banks are cyclical but they increasingly come to trade with rates. that is true in the u.s.. it has been a dynamic since the financial crisis. the 10 year does not move much.

is pegged atield 70 basis points because of fed policy. you are not seeing the same rebound in banks who would expect even with people becoming more optimistic. the other challenge, as we spoke about, a democratic sweep might be supportive of cyclicals. if you get infrastructure. the other thing you may get with a democratic administration is a more difficult regulatory regime. i think that also is hurting the performance of u.s. banks. tom: what about technology? bloomberg intelligence has put a lot of effort into this. a regulatoryally threat to the servitude of big tex stocks? thatg tech stocks echo >> -- >> i am much less worried right banks, tech companies,

then i am about banks. the reality is i do think tech companies are in the sites of regulators the same way banks would be. i do not think you have some of the breakup risk people were talking about six months ago when candidates for leading the primaries. franciene: when you look at some of these things, how do you play the china cardiac of -- how do you play the china card? >> china is the one part of the world where you are seeing a v shaped rebound. you talk abouts that are material stocks are a direct beneficiary of china's rebound. you see that in commodity imports. the one part of the global economy that is coming back the fastest is manufacturing.

happening isis is interesting. consumers are spending, but they cannot spend on services. they cannot travel, they cannot go to restaurants. what we are seeing is a surge in goods. whether it be electronics or home improvements, i think that is another way to play the china rebound but a broader rebound in trade, goods and manufacturing. koesterich, thank you very much. i am choked up about pubs closing early in london. [laughter] richard clara, one of my favorite people, vice chairman of -- dynamics ofy on general equilibrium sir. throw it the window. what we want to know is the fed's interpretation expressed

inflation factor. this is bloomberg. ♪

♪ franciene: -- ritika: i am ritika gupta. -- will need to stop producing battery cells to meet demand. that according to a tweet from elon musk. the products, even as the

electric car maker ramps up purchases from outside suppliers. today is tesla's shareholder meeting. it is expected to showcase new innovation. dashers want to get may have to cut jobs after travel demand has declined since the end of summer months. carriers are pushing back deliveries of new planes. rcl radioive told that the situation has worsened. he is running the company's future is at risk. tom: data check. focused on foreign exchange with the dollar strength now flat. nevertheless, over the past two days, russ koesterich mentioned sterling can't find a bid. this is an elegant chart showing weaker sterling. lira is here. you have got to believe an intervention should come in from

the but -- from the turkish bank. england's the bank of governor was playing down the odds of a b.o.e. negative rates because of the virus risk. he was candid on that this morning. if we go into restrictions on pubs and restaurants, and if we need to go into a second lockdown, what does that mean? are we going to go to negative rates? he tried to push against that idea. stocks are still getting 1.4%. ingles -- ibng ves.

francine: this is "bloomberg surveillance."

blackrock portfolio manager. we touched on the election. this seems to be the greatest unknown apart from lockdowns for the next three months. what is the market looking at right now? >> right now there is a lot of uncertainty. it is a pivotal election. depending upon the outcome you can see radically different policies. it is a hard one to handicap for all the reasons people are aware of. what you see now in market prices are a couple of things. you see there is an expectation for volatility, not just during the election but in the aftermath. given the challenges of holding the election in the midst of a pandemic there is a good chance you will have a contested election. you may not know the evening of election night. the second thing which i mentioned, i believe you are seeing more evidence people are putting a higher probability on a democratic sweep.

teasey i.t. set out -- i that out, cyclicals would benefit if you had a large infrastructure package which you most likely get with a democratic sweep. those are evident in pricing. francine: if there is no clear-cut winner what happens? how much volatility would we see on the market? russ: i think you will see the vix and other measures of volatility spike. it is arguably temporary. the election will be decided. if you look at what happened in 2000, you're looking at a period where market volatility is high. that might be an opportunity. one thing to think about as you can sell the volatility. that is one of the strategies we another's are using now as a way to generate incremental income on a portfolio in an environment in which income is hard to come by. in the 2021,ooking

2022. how far out there is the bridge? what is your vision of where you need to focus? russ: i think you want to focus on the long-term. use some of the short-term volatility. whether it is selling and derivatives markets or buying some of the names you like over the long-term. reality is you have some phenomenal developments in the corporate sector. we look what happening in cloud computing in internet retail, semi's. large parts of the market are demonstrating innovation. you will have volatility. it will create opportunity to add to positions at a better price. regardless of who wins, the u.s. corporate sector actually looks strong. there are names demonstrating tremendous innovation. use the volatility as an

opportunity to add positions. tom: can you add positions in tech? and things with a pe multiple of 28, 30, even 32? russ: i think you can. the pe will give one signal. you would've argued the market has been increasing overvalued for the better part of four or five years. i'm not saying it is irrelevant there are other things to watch as well. we are looking at cash flow. when you look at free cash flow and you use a long-term discount rate, you take into account rates at rock-bottom levels that are likely to stay that way. a lot of tech names look overvalued on a pe basis and they start to look more interesting. the other thing we are focusing on is profitability. what are the platform companies that can generate often ability and earnings consistency? can they generate that profitability in a weak economy? those companies are likely to trade at a premium.

unpredictable? i'm thinking of tiktok and china. is it unpredictable what will happen in this great fight for global tech dominance between china and the u.s., and how quickly can some of these concerns come to the forefront?? russ: there is a tremendous amount of uncertainty. we have talked about the election and the pandemic. we are forget the trade war. i think this transcends the election. it seemss of who wins, to us you will have a period of separation when it comes to the broader economy and in particular technology. both countries will focus on their own standards. there will be less cooperation. you have to think about a world in which technology standards, technology development is so much bifurcated between the u.s. and china. that opens up opportunities as well as risks. tom: we are too bullish.

i make a joke, folks. some of the risks out there are substantial, particularly after the emotion we saw yesterday. the vix up 32. 27.48 right now, showing a come back. that began before the 3:00 hour yesterday. i will suggest all in. the nasdaq puts it on. nasdaq up 86 point. that is coming up on 1%. we are not there yet but nevertheless it's important. standard & poor's of seven points on the vix as well. 10-year yield up. hundred $40 a barrel. gold with a huge move yesterday. $1910 an ounce. ritika: president trump is

moving towards nominating amy coney barrett to replace ruth bader ginsburg on the supreme court. she is the favorite of antiabortion rights advocates who have been lobbying for her appointment. she is currently at judge on the seventh circuit court of appeals in chicago. will notof england raise negative interest rates, reinforcing downside risk to the u.k. economy. governor andrew bailey said rate cuts are in the banks toolbelt. >> it was no surprise we were going to do this work. it.e is complexity in situation have a where we say yes, we have the headroom to do this. that is intolerable. ritika: he spoke in a webinar shortly after the government urged people to work from home

again if possible, reversing trying to get people back in workplaces. engineers don't think fixes to the boeing 737 max are enough. should have tougher standards on cockpit alerts. they say designs don't comply with faa regulations and it could still lead to pilot confusion. 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. this is bloomberg. francine: thank you so much. up next, we speak with andrew mertha, from johns hopkins. this is bloomberg. ♪

ritika: this is "bloomberg surveillance." coming up today, bain capital arwald.head michael ai

this is bloomberg. ♪ "bloomberg surveillance." good morning, everyone. the markets really extraordinary this morning. stability after what we saw yesterday. i went to underscore persistent dollar strength. resiliency to the dollar. sterling. uschina, andrew mertha joins now with johns hopkins international research. we are thrilled he can join us this morning. the relationship is interesting, and also the silence from beijing. it can be tiktok, it can be we chat, they can be seven other things you are better at than i am. how do you describe the silence from beijing? is it normal? andrew: this is a whole new way

complexiating international commercial deals. china tends to be far more comfortable when things are being done quietly out of the public eye, and announced when t's having crossed and the i's have been dotted. this is something they are simple he not used to. tom: how alone are they? this came up over the weekend and a conversation. do they feel isolated without russia's support and without u.s. support? andrew: it is interesting. xi jinping's talk at the u.n. yesterday, you get the sense he was really talking to multiple audiences. not simply the u.s., although the u.s. was the primary one, along with the chinese domestic audience. you got the sense things really

changed from say a year ago when everybody was talking about china and the belt and road initiative. say, there is a shift towards what is china's role in the international order? very different from a year ago. francine: what is that role? is there a huge difference between what they see as that role and the international community sees? merew: i think it seems to they are trying to figure out the global tectonic plates. they, like everybody else are watching to see what happens in the united states in november. chief sources of international leverage, its ability to interact with and invest in much of the developing

world has now been complicated otherid, as well as these international trends we are seeing. andrew, isverall, that trend going to play out in technology? is that with the biggest fight between the u.s. and china will happen in the next five to 10 years? andrew: it seems to be one of the areas where the fights will be the hardest. recent developments in europe have tipped the balance, at least for now, away from china. tom: did the chinese wait for president bynum? -- biden? how do they casually that outcome? -- how do they calculate that outcome? tom: how do they weigh and measure what to do versus a president trump over a president biden? trump it isink with

also prizes. the tiktok deal is just the latest. oftty much airing a lot dirty laundry cap within the negotiating world. they certainly don't expect biden to be easy on china but they do expect him to be somewhat more predictable, which is kind of a key facet of the relationship that has pretty much left the bar under the trump administration. -- barn under the trumpet minister ration. francine: thank you very much, andrew mertha. the u.k. now telling the public to work from home. businesses that rely on workers in the city may suffer. danny, what is the economic impact of asking employees to work and home? >> in the words of britain's business lobby, cities are threatening to become ghost towns. ecosystem of

people going into the office on the lunch breaks, getting dry cleaning done, getting coffee or anything else. in london, 4 million people are working in the services industry. that compares to just 1.2 million who work in finance. we can see the effects of this already. the coffee chain letting go of about 3000 workforce. that is where we get this real economic pain. anecdotally i have spoken to businesses. thesmall convenience store, owners are struggling to pay rent. they are not getting any sort of break from their landlords. they are concerned about their future unless people start coming back into the office. francine: what about the hospitality curfew of 10:00 p.m.? is it difficult to put a cost on that? dani: there certainly has been

attempts to do so. 250 million pounds a day is the price tag on having pubs and restaurants closed after 10:00 p.m. to thea 3% to 4% decline gdp in the next quarter. only 10%on pounds is of what we saw at the peak of the april lockdown in the u.k. they say the real effect is this immeasurable consequence where people felt they could handle the first lockdown, but once we move into a second one, even if it is just a curfew, it becomes discouraging. companies are less likely to hire. maybe firms will let employees go because they don't see an on the horizon. dani, thanks so much for the u.k. situation. boris johnson will address the nation at 8:00 p.m. london time.

join us at the bloomberg equality summit tomorrow for corporate executives, leaders, and a full day of conference that will try to think of conversations looking forward and put a spotlight on influential leaders while paving the way towards equality. that begins wednesday, 7:00 a.m. in new york. this is bloomberg. ♪

francine: this is "bloomberg surveillance." sweden's bank is ticking with a forecast of years of zero interest rates. it navigates its way through the kobe crisis. things are improving the bit compared to july. when it comes to doing more or less, we have decided to expand our balance sheet. there was no need to add to becauseograms this time we are comfortable with the expansion going on until summer

of 2021. >> given that covid is resurfacing, do you see new setbacks? issues one of the everyone is wondering about is what is next. case, import-exports are 50% of gdp. whatever happens in the rest of the world, it will hit us in one way or another. implies scenario, that it would force us to do more. >> you say you are open to reducing negative rates again? wefan: technically speaking, know how to do it. that needs to be a meaningful measure. it is hard for me to imagine things would hinge on negative rates only. we are going to be stuck with this kind of package we have in place for probably quite a while, which is very similar to what many other central banks

have done. >> you are making a historic move into the corporate bond market. k.d. give details about these purchases on if you are planning on expanding them? 10fan: we are ready to buy billion, and that's a small amount compared to the size of the market. we are comfortable with that measure. it increases the stability in the market. we are ready to be there for quite some time. a whilet has taken to deal with practical aspects. we are up and running and we started buying last week. we know how to do it. what is important in the long run is it means we know how to do this. if there is a need, we can essentially expand -- substantially expand purchases if need be. >> on corporate bond qe

-- what dee have to say to your critics? stefan: when it comes to expanding the balance sheet we have a choice between stopping to early or sometime later. it is very dangerous to withdraw these programs to early, then you have to step back in. that would not be a good scenario. it is much better to try to do these things in such a way when eventually things normalize, stopping buying corporate bonds or government debt or whatever it is we are doing, it should be considered to be a nonevent. it is obvious things have improved and it is time to move on. we are by far not in that state of the world as of yet. >> given the controversy, why haven't you made public the blackrock report on public bond qe? stefan: that is providing us

with reflections on the corporate bond market. is for internal consumption. it is up for us to decide what to do and what not to do. when we started our program we had clearly stated how he we would gradually move and change over time and increase transparency. >> why not keep it as transparent as possible? absolutely doing that but this is a market quite different from the government debt market. it takes a while to gradually increase transparency. there is absolutely -- we are not against transparency. it will take a well to gradually increase transparency. it has to do with the maturity of the market. it is less mature than the market for mortgage backed securities or government debt.

that was stefan ingves speaking with bloomberg. let's get straight to the markets. looking at the pound and the movement with treasuries and technology. we will get back to the pound and a second. u.s. equity futures are up, along with european stocks. tech shares showing resilience. the dollar faltering after its biggest daily gain in three months. .66.-dollar, 117 treasuries holding steady. steve mnuchin will speak later today at a congressional panel. if i look at why there is a bit of a rally and technology, we had figures from facebook and amazon. they advanced in premarket trading as the nasdaq gauges yesterday. it could signal a market correction that is fading or

they have gone too far. i'm watching pound. let's bring up the pound chart if we can. we heard from governor andrew bailey that the bank of england is not close to negative interest rates despite the lockdown and the downside risks to the u.k. economy. explained it clearly the bank is looking hard at rate cuts. they are in the toolbox, led he will not use it if possible. the pound repaired some of its earlier declines. we expect boris johnson to address the nation on these extra restrictions at 8:00 p.m. london time. coming up, more "bloomberg surveillance." ♪ look here, it's your very own all-in-one

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>> i am not going to say there is a bubble forming. there is potential for one to form. >> could be sowing the seeds of the next bubble right now. >> the room for policy maneuver is very limited. > we have really moved into a new era. monetary policy the way we grew up with it doesn't work anymore. >> monetary policy will do its part. it is not, though, the primary driver of this recovery right now. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york and london, for our audience worldwide, good morning. this is "bloomberg surveillance ," on bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. counting you down to the opening bell, with equity futures up four, positive 0.1%. tom: a little bit of calm. , isaw the abrupt reversal would time it at