some experts estimate the real figure could be double. european stocks decline. attention shifts to tonight's u.s. debate. donald trump and joe biden face off in ohio in an event that could shake up the race. and christine lagarde says the ecb is ready to act further to aid the recovery. this as chancellor angela merkel could place further restriction measures to stop the spread of the pandemic. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene is in new york. tom, i have to say all eyes are on the debate this evening with joe biden going up against president trump tonight. the focus is also on what we have heard from christine lagarde, that could move fixed income in your, but that in europe, but euro also saying we are not over this. tom: a little bit of a rebound in euro. i know prime minister johnson will be making comments in some form with the virus front and center.

i looked at the statistics, and i must admit when you look at the cases, it really gives pause on the case growth we have seen across europe. as to the debate, kevin cirilli and david westin in cleveland for the debate. it is a late night debate. i'm sorry you're going to be up at a god god-awful 2:00 a.m. to see the drop on this. but it is really something. i have to do a quick study. i would suggest you could go back to kennedy and nixon for a debate of such interest. francine: you just wonder where it will go. probably everyone will be watching it. let's get to the first word news in new york city with ritika gupta. ritika: president trump and joe biden go head-to-head for the first time tonight in the opening presidential debate in cleveland. the president has unwittingly done biden a big favor, lowered expectations for biden's performance. the president has spent months

painting biden as sleepy, doddering, and senile. many have not seen biden since the democratic convention. democrats are making another run at a coronavirus stimulus package. they released a scaled-back 2.2 trillion dollar proposal to support the u.s. economy. ands between house speaker steven mnuchin. the house could vote on a bill this week. from theils coming out new york times investigation of president trump's taxes and income. the time says he earned $427 million from his role on "the apprentice," and the paper says the show projected the false image of a successful real estate mogul, which eventually helped him win the white house. theadministration calls times reported political his peace -- hit piece. luber has learned the u.s. may target more than a dozen banks,

and declare the entire sector off-limits, cutting off iran's up economy from the outside world except in limited circumstances. 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 bloomberg. francine: thank some ash tom: thank you so much. equities, bonds, currencies, commodities. for the first time in ages, there is not much going on. turkish lira on record weakness. it is about the fractured economy of turkey, and other than that, francine, i don't have much to talk about, which is frankly a relief. i guess i would point out in honor of jon ferro the real yield backed up to a greater negative number, not through to a new record low for the real yield, but nevertheless, a -.97

on the 10-year. the real yield leaves me gasping. what do you have? francine: as you and i always say, there is no real direction in the market. the end of month rebound in global equities seems to be reversing as investors are looking at a scaled-back fiscal stimulus in the u.s. and looking at the rising tolls of the pandemic. for the moment it is directionless. a couple of things that could move it -- we are expect and christine lagarde to make comments with jobs on friday. in europe, thanks and sickle stocks are on the way down. joining us to talk about the markets and politics is john normand of j.p.morgan. always great to speak to you. when you look at u.s. policies -- i don't know if you can hear me or if you're still speaking to our producers, but what exactly should the market be focusing on? what is the market pricing in at the moment regarding u.s.

elections? john: that is going to be a there is election, and not going to be that much imprint in the way the economy is going to behave and what corporate profits are going to look like. there is the hump in volatility curves, but you have not seen a significant marked down asset prices in general this by all the uncertainties with the drawdown from the highs. but pretty modest relative to how much markets are up since march. francine: how do you hedge against a very tight race? is there something investors will be looking at as we approach november 3? john: i think there are a handful of hedges. if your baseline assumption is that there will be a contentious election, just recognize that this is a u.s.-specific event, and then being underweight on -- also, a company that tends to

work in favor of some of the funding currencies, whether that is the yen versus the dollar or the dollar versus em currencies, i don't think that is hedging behavior. architect pretty well supported by the lack of issuance that is going to be in the pipeline over the next few months, and also by the fact that the fed itself can change -- can change its asset purchases if the spread of the market becomes disorderly. i think it is under waiting u.s. assets on a market basis. tom: we in the media obviously make it too simple. your note is wonderfully complex and institutional. i want to ask you about the correlations in the market and the state of the normal market activity. is this a normal market? john: it's not a normal market. what is most abnormal about the market is the inability of the bond marketer rally as the equity market declines. there's been a 10% peak to trough decline, and the markets

are almost unchanged when you look at 10 year bonds or 30 year bonds in the u.s. that is highly abnormal. it cannot count on those bonds as giving them the capital went equities are declining. to get you inant trouble with j.p. morgan general counsel, but i would suggest that mr. dalio and prince at -- not to talk about bridgewater, but do you suggest that if bonds are not acting normal we could find alternatives to use as derivative hedges he echo john: there are absolutely alternatives. the issue is whether those alternatives are going to behave as they traditionally have in the past. the alternatives are owning yen versus other currencies, dollar versus emerging markets, gold versus dollars. the problem is those hedges did thebehave as reflexively as

bond market used to behave when the equity market decline. holding all of them to control for the fact that each of these is imperfect, the fact that they are not as reliable as the treasury market used to be means that the hedge protection available is less than it was in the past. that is problematic. it is just maybe clients should put in less risk than they might. normally they cannot insure against bad outcomes. francine: is there anything you can -- is there anything else badcan ensure against actors? is holding against high-grade credit, the other is on currency debt. central banks are behaving differently from this crisis in the past, but than buying credit in ways that it never did before. we in central banks cut race -- cut prices. that means you could have more

stability in those markets. there are other things to consider. francine: talking about things that thed go wrong market hasn't priced in, we heard from the ecb regulator for the banks saying that the market is not pricing at all at the moment a no deal brexit. how would you play that at the moment? believe thatf you no deal brexit should be the base case, you should be short sterling. that is not a novel concept for anyone with a depressed level of the currency. you recognize that clients are also underweight on currency. the disruption you would get from a no deal brexit because of what it means for the bank of england, possibly negative interest rates, means the obvious hedge is the one that is being underweight the currency. tom: with this hedge

uncertainty, can you affect trades? can you affect a tactical strategy? john: i hope so because that is what i'm trying to do for a living. i think the idea here is that you should expect maybe a lower suspect rate then you have in the past because of the fundamental relationships are under threat because of the low yield environment. i think people need to be a little less -- tom: i hope that everybody understands that the early darkness under a full moon in new york city, it is a joy to ask such a direct question to mr. normand of j.p. morgan. john normand of j.p. morgan, we are going to continue here as .est we can feel to as we begin to look at the american economy and the millions of unemployed, jason

furman, formerly with the council of economic advisers at harvard. jason furman, the 1:00 hour. this is bloomberg. ♪

>> the impact of the pandemic is still being felt across the euro area. people are losing jobs, people are losing income, businesses thefacing difficulties, and future remains uncertain. inflation in the euro area stood in august, and is expected to remain negative in the coming months. are far away from the goal that we have, which is

close to below 2%, and we are not complacent about it. euro area real gdp is only expected to recover to levels in late 2022. while euro area economic activity rebounded in the third quarter, the recovery remains incomplete, uncertain, and uneven. ecb president was christine lagarde, addressing european lawmakers monday. john normand is with us. how much does this have to do with on the fiscal side and the monetary side, and do we start worrying about that levels, or is that just, as long as it is issued by an e.u. country, it should not factor as a concern? john: i think what europe has to do is what most developed markets have to do. they need to run fiscal policy

for the neck couple of years and allow central banks to finance that at historically low rates. that might sound like a simple concept, but that is not really the way current legislation is structured and most of these countries. most countries have fiscal stimulus rolling off and there is tightening, so there is a lot for the fiscal authorities to do. i think central-bank policy is willing and able to push out sovereign indebtedness concerns for quite a while, but unfortunately the fiscal side of things on current legislation is not going to be helpful for growth this year. francine: what kind of asset class do you like in europe, if any? john: i like equities in the sense that i think even as the economy slows, even though there is fiscal risk, there would be an expansion. i think the bar is so low for equities to outperform fixed income in a low interest rate environment, that equities -- it

is just that i have low expectations for how this is into ao evolve high-quality trade. if you have recurring doubts around the pace of growth, if you have the possibility of an acid and fiscal tightening -- of an accidental fiscal tightening, there is a low-risk outlook for stocks even though you have an incredibly low hurdle rate. tom: do you have a confidence, john normand, that management can be subtle enough to adapt and adjust to all this? do they have enough degrees of freedom to take the income statement and fix it to an adjusted world? do.: i think many companies i think you have seen an incredible amount of sort of forrtunistic issuance, instance, around the covid crisis. i think you have seen companies unbelievably challenging operational environment. many companies have not managed that process, which is why you have seen an increase in

bankruptcies and defaults. but relative to the size of the shock imposed on these economies and the unprecedented nature of it, the fact that defaults have been so low is some testament to thely agility but partly financing environment that makes it easier to retool operations and not have to worry about funding stress over that period. tom: it is idiosyncratic that the turkish lira unwinds. when a currency weakens like that and on a logarithmic y access, there is convexity, there is acceleration in the decline. is there a way that you can tell the when of when it unravels? don: i think it is happening in the sense that this is a consistent underperformer relative to all other currencies, even when the dollar is moving lower versus a number of other pairs. so the fact that the lira is consistently weak tells you there is some idiosyncratic

crisis of confidence in the way the policies have been damaged broadly. i would only feel more comfortable with that currency if turkey were pursuing a higher range environment over the same period. i don't think the initial rate hikes are enough to stabilize the currency because this giving that investors have, they may not be maintained for a long time. there is only going to be stability over a multi-month period of high rates. how much of a possibility is that? is that almost nonexistent given the current political situation, or could it surprise us and maybe come in sooner than expected? john: i don't think it is out of the realm of possibilities. the central bank has raised rates before at times of extreme lira weakness above some of these hikes that occurred. a couple of years ago they were timed in a way that was a surprise, and those rates were maintained at a high level for much longer than most people would have expected.

eventually there was a turn in the currency. tightwas a precedent for monetary policy stabilizing the currency, but it is a waiting game. i don't think investors are willing to invest in this market now. they probably want to see two or three months of high rates. tom: i have lost so much money betting on the tottenham spurs in the last weeks. what is your single best idea across the asset classes? john: i think if your horizon is the next couple of months, i think credit will be most stable asset class in a very uncertain environment, and i think part of that is going to come from the belief in the central bank backstop. this will be a surprise in terms of something that is quite stable when it is high another markets. tom: thank you, john normand. just brilliant. he is with j.p.morgan. futures -47. turkish lira at 7.84. there is some real convexity there. that is a difficult story stop

this will be really interesting. after interviews in the last number of days on his book "rage" and the impact of the book on washington, we will address with mr. woodward not the rage of the moment, but consider on the day of the debate the history and the similarities and differences of the president and a nexen of another time. bob woodward this more -- and a ixon of another time. bob woodward. this is bloomberg. good morning. ♪

ritika: this is "bloomberg surveillance." is the biggest tender offer in history for japanese come summer -- company. its mtt on turning wireless unit into a subsidiary. the company will spend $40 billion to buy the shares it does not own. that is a 40% premium. whether is considering to supply a joint venture between dash and daimler. bloomberg has learned there have been early-stage talks. a challenging market could make it difficult to agree on a price. lvmh has countersued tiffany weeks after pulling out of its planned $16 billion purchase of the jeweler. the luxury goods maker says the decision was driven by the french government request for a deal closing. lvmh accused tiffany of

mismanagement during the pandemic. january, a trial is set in delaware to determine whether lvmh can continue with the deal. that is the bloomberg business flash. tom: equities, bonds, currencies, commodities. it matters even when it is a slower day, and it is. futures negative six, dow futures -52. and the vix i will call a churn at 26.85. 10-year yield, a little bit of a trading range. as john normand was suggesting to us. francine, i'm adding no value. save me. francine: the pound. there is a bit of story on the pound, gaining amid speculation that a successful brexit trade talks could actually help shield britain from the e.u. mess. so we are seeing that rise little bit on renewed hope that they could get a deal done. european shares are down, and that is led by cyclical stocks but also banks.

i think people are trying to assess and scale back the stimulus proposal in the u.s. as well. speaking of the u.s., we look at the debate tonight. coming up next, we speak with amy pope, china house associate fellow of the american -- chatham house associate fellow of the americas program. we look at the supreme court senate, thethe tech story in the new york times come and whether that plays out in the debate. in general these debates could really sway, right, tom? tom: somehow i think the tax issue will come up. ♪

tom: good morning. "bloomberg surveillance." the debate in cleveland,

ohio. we will give you some framework on that with david westin and kevin cirilli. cleveland, ohio is exceptionally important to the fabric of late 19th century america. it was arguably the richest city in the world off of oil in the times of the 1890's and the 1900s. case western reserve university, a leading institution -- think the legacy of john hey and of alldow of dow chemical and the industrial might of another time. it will be important for us, in this debate, to find a political experts. rather than that, we drag in a gentlelady from case western reserve university in cleveland, ohio amy pope of chatham house. is -- went went this there. this is one of our great science

institutions, and esther trump will be talking at that nexus of science and engineering. amy: this will be a big show. there will be a lot of fireworks, is what i am expecting. tom: there is an agenda. we all know chris wallace and what he has been doing -- he has always been very rigorous about the debate. do you assume it will stay on script or does mr. biden open up with this month's number, $750? amy: i think the vice president will go right for the tax issue early on and very often. the fact that the debate is taking place in cleveland is particularly useful for that point. tom: why is that? amy: cleveland is really blue-collar america. it is where we have seen the face of america shift. biden will really hit on the fact that president trump has paid less taxes than most americans, your teachers,

professors, your workers in various industries. that is where he will hit hard, pushing forward the idea that the president actually knows nothing about how middle-class america lives. amy -- orthe problem, not the problem, but a lot of people from the president's support are saying if i would not have to pay taxes, why would i? sway his base at all, does it actually move the needle? amy: i do not think this information moves the needle for his base. his base left him no matter what. i think he was right where he said he could basically do anything and still have this group of voters. but everyone is fighting for the folks in the middle, the folks think places like cleveland and pittsburgh who voted for president trump went in the past

and they voted for president obama. that is a demographic they are both going after right now. it is not clear how the tax issue will weigh in their minds. francine: what will make a difference? anything else, the supreme court justice? who are they trying to talk to in this debate? is it the people who are undecided or people who can actually turn? who are undecided, i believe. i do not think the supreme court issue will weigh heavy in the mind of that particular category of voters. whether they follow the supreme court is not clear. i think the president is going to use that as an issue to get his base really galvanized and show he can deliver for them, whereas vice president biden does not want to spend too much time on the supreme court and wants to keep issues focused on things like the economy and responding to covid. of: my reading is the idea

pennsylvania and florida as being the key stakes, but what it comes down to is the shaker heights vote, the prosperous part of cleveland. america those places of viewed the debate to make a choice of biden or trump? abouthe interesting thing the tax returns is it suggests that the president's plans for the economy are to be questioned. if he cannot manage his own finances, if he has built, effectively, a house of cards down,ould come tumbling how should the american people believe he will deliver a strong economy when the country is in crisis? that will be the focal point. what is his plan in the face of covid? if there is not a vaccine that can be distributed in january, how will the economy continue, how will the supply chain work? tom: in this first impression of

this debate versus debate two and three, with 70 people voting early, is this sort of a winner take all debate? amy: i would not say that. i think we still expect that the debate will matter. for those in the middle who are really trying to figure out how the candidates are different, and it is surprising there are any of those votes left, but we know that there are. on the other hand, early voting is a new dynamic. we are not really sure how this will play out. we have never been in a situation where so many states are offering the opportunity for voters to get out there and basically vote now for the president. francine: so give us a sense -- i think about one million people have cast their vote already. how does that actually change the dynamics in these swing states? deep dive ofmore who has voted and who has not? amy: the projections suggest it

will be more biden voters voting through mail-in voting. that is creating this dynamic that so many people are worried about, that on the day of alexion, when you have people going to the polls and you have the bowling being done when people are exiting the polls, it will look like the president has won, but we will not actually know the picture until we can calculate all the votes. that is an interesting dynamic. the projections sure it will be more likely the red states voting in person at the polls and early voters are more likely to be democrats. francine: is this just simply people deciding whether donald trump has done a good job in the last four years or not? this feels like a very different debate between what we saw between hillary clinton and donald trump last time around. be judgedhe going to on covid, on the economy, or something else? amy: i do think this is, first

and foremost, a referendum on donald trump. it is usually the incumbent who has the strongest chance of winning reelection. unusual election, because the scale of the crisis, covid, the impact on the economy, is something nobody really appreciated going into this year. i really believe this will be a referendum on donald trump's response to covid and the confidence of americans as to whether or not he can keep the economy back on track, whether he can inject some sense of security into the lives of ordinary americans, who, right now, their lives have been totally disrupted. tom: where do the culture wars fit in? twitter lights up nonstop, facebook and the rest of it as well -- is that part of the landscape or just a distraction? amy: i think that is a distraction donald trump is very

interest to deploy. we see him really pushing hard on things like the protests and violence in various cities. we know he wants to make that an issue, wants to make immigration an issue. he really wants to draw people into the culture war. certainly that galvanizes his base. the question is if it works with the key constituency that we are focused on, those who are not decided, those not wed to one party or the other. tom: for cleveland, what do you think? orr okies -- piroghies cleveland boys? what do they need to understand the true fabric of cleveland? cleveland is a microcosm of america. you have real working-class people there. people thinking about how do i

pay my bills? they are often a tape away from real financial pressures. that is what the president really needs to focus on, what solution does he have for them, can he persuade them that he has a new vision to offer for the united states or will they be disappointed with what they have seen so far? tom: thank you so much. from -- on cleveland. the presidential debate at 8:30. a lot of people have said mi taking a "surveillance" beauty rest? this is so important i think i will be up for this debate, to see it. with our first word news, here's rick a group that -- wiki group that -- ritika gupta. ritika: a researcher at the university of melbourne say

fatalities could almost double. that they are unable to accurately quantify cases. california's in wine country has now tripled in size. it has burned more than 36,000 acres. the u.k. could be facing a substantial tax increase because of the coronavirus, according to the institute for fiscal studies. thatesearch group government spending could make gdp.early 45% of won itstampa lightning second stanley cup last night, winning the best of seven series 4-2.

their defenseman was named the most valuable player of the playoffs. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. tom: you absolutely nailed that. nailed that on hockey. victor incredibly well-deserved, just incredible on defense. francine: tom is really our resident expert on ice hockey. you need to show us the moves someday. tom: they are a little bit slower than they used to be. francine: i do not believe that for one second. coming up, we track covid-19 with jennifer rohn. this is bloomberg. ♪

the day the vaccine is approved by the fda, we will begin distributing it within 24 hours with hundreds of millions of doses to follow very quickly. we are all set to go, all ready, and logistically, we have the military lined up, and some incredible people are just waiting to have it. over 100 million doses will be available by the end of the year. tom: the president speaking on this pandemic yesterday. and a little bit of a debate between dr. redfield of the cdc and the president over the path taken. what is most certain is the pros are looking at the ratios -- they are looking at deaths and cases, but far, far more the pros do a compare and contrast.

jennifer rohn is an expert on this. the infection rate gets my attention. governor cuomo in new york showing stunning infection rates from brooklyn to queens to east in manhattan. tell our audience the dynamics of the various infection rates right now. dr. rohn: what we are seeing, first of all, is we passed a terrible milestone of deaths. as far as cases, they keep going up, and there is no sign of an average stopping. the infection is rolling on. what we are seeing is that places before that had got control of their curves, it is starting to come back. it is happening in the states, in the u.k. come in europe. countries are losing control after having got it under control. this is what we predicted, but it is sobering to watch it happen in real time. guestesterday, a

emphasize that as the seasons changes, we will go inside. what are your thoughts about the seasonal changes for this pandemic? dr. rohn: of course, it is a new virus, but it has to be said almost every respiratory virus comes into its own during the winter. not only are people indoors more, but there is something about the cold air that respiratory viruses thrive on. circulatingwill be seasonal flu, adding that perfect storm element. we hav indoor people breathing air, and a seasonal flu that for a spanner into the works. francine: is covid less deadly this time around, either because we have a better handle on how to minimize the risks on certain patients when they are in hospital or because the more vulnerable are staying home? dr. rohn: it is not really less

deadly. it is just we perceive it to be less deadly, because back in the onlyspring, we were testing people who were sick. it appeared only 1% of people who were dying, but we know now that that was just the tip of the iceberg. ,any, many people were infected so it is not changing, we just understand the distribution of the virus better. having said that, we do have a few tricks up our sleeve now. doctors are familiar and hard to treat it, we have a few drugs that make a difference. covid killing old a million people, but we are better at dealing with it. francine: do we know the actual percentage of the population who has had covid and are those people protected? dr. rohn: it depends on how much surveillance is going on. apparently, there are countries where immunity may have been

reached, other places where it is only 20%. it really depends on the population density and how it has played out thus far. i would say we are very far from global herd immunity. tom: tell me your thoughts on the school dynamic. there is just so much -- not so much misinformation but different threads of information that are out there. how do you perceive the debate over our elementary, middle, and high school attendance? dr. rohn: there is no question that it is very safe for kids to go back to school. the chances of coronavirus killing a child is small, but the problem, of course, is that kids are not away from the rest of the population. many kids are looked after by grandparents. and once you get it circulating in kids, it will spread across the population, and we have seen that. what we're looking at is the

trade-off. not educate our kids. so we have to send them back. the best we can do is shield those more vulnerable. tom: the number in the united states is 200,000 -- we just pass this tragic milestone of deaths. i have not really heard anyone frame where the glide path is going. is it just linear -- expert or a way-- exponential it just stops or peters out? dr. rohn: it won't peter out until we have a vaccine or herd immunity. you can extrapolate how many people will die. and old people, it is a very high number. and young people, it is a small number. as cases go up, deaths will follow. there may be a lag, but it will happen. it is in evitable.

that uptick that signals death is following. as long as cases go up and we have no vaccine, this is, i am afraid, inevitable. francine: frankly, it is so confusing, if you are sitting in new york or london, because there are so many different guidelines that vary from region to region. it is different if you live in scotland then if you are in england. how should people get their information? what is safe and what is not? of course, follow government guidelines, but as we get into the winter season, should people just be more cautious? dr. rohn: i think what we are seeing is an attempt to expand that with the population. we know how to shut down this infection, by total lockdown, and nobody wants to go back to that. we are seeing various governments and cities trying to implement smaller breaks and seeing what works.

it takes two or three weeks to see if it has done anything. so yes, you have to follow government guidelines, but those do vary widely. if you are feeling vulnerable, you should take more precautions. in the u.k., you can stay out until 10:00 at the pub, but maybe you personally do not want to do that. tom: but jon ferro does. jennifer rohn, thank you. attendance,drop is in new york city, limited attendance of elementary students. the little kids, maybe, in new york city go back to school, unbelievably this near final day of september. coming up, on the american labor 8:00 hour. the this is bloomberg. ♪ ♪

is "bloomberg surveillance." mcafee files for an ipo, part of a software boom in listings this year. it used to be a unit of intel. majority of the

country in 2016. its on lithium in nevada to build its own batteries. it dropped a plan to buy a mining company. thousands of workers in jpmorgan's consumer unit can work from home a little longer. they have been told they do not need to come back to the office until next year, ato their mortgage operations. bank seniors happen order to come back to work. francine: thank you so much. this is what the market is looking at. we are definitely range bound. tom keeps on saying that there is not going -- not a lot going on in the market, and i do not disagree. there may be a bit of note of a strength on pound. it does seem people are seeing

we mave a deal when it comes to brexit. in general, global equities, the rebounds that we saw -- fiscal stereos proposal in the u.s. has been scaled back and the number of infections rising because of covid-19. tom: the 10 year real yield, if you will -- it's done better over the last couple of days, up about 10 basis points, and more than halfway back now. on the equity markets, howard ward will join us from gabelli funds, next. this is bloomberg. ♪

tom: this morning, all prepared

for tuesday night football at 9:00 p.m., a debate. the president does "limited preparation."mr. biden measures the distance between scranton to park avenue. pelosi ammunition will speak this morning. mnuchin will speak of this morning. and a job report friday. many millions are unemployed. good morning. "bloomberg surveillance." i am not sure if it is this hour or next hour, but the prime minister will manage the message forward. give us an update on a nation listening to the prime minister on this horrific change in the pandemic. francine: yeah, so there are a couple of things. first, we expect to be briefed by the prime minister. this could be a weekly occurrence on extra steps being put in place to m