francine: the u.s. president tests positive for covid-19. donald trump says he and the first lady have both tested positive for the virus. u.s. futures dropped. the election is just over a month away. treasuries and the endgame. a wake-up calls for the markets. good morning, everyone. welcome to "bloomberg surveillance." i am francine lacqua here in

london. we had that surprising news, a lot of it on how it could up into the markets going forward into the november 3 election day. now, we still know very little about the symptoms, if any, that president trump has, so that gives us a little indication of what will happen next. i suppose we could see him stop campaigning for the next two weeks if not longer. it could also have an implication for the ballot if something were to escalate. canpean stocks down, you see s&p futures also down, and then vix, one of the measures we look at for volatility, is gaining as the market trying to recalibrate exactly what that means. now let's get more on the markets with dani burger. hi, dani. dani: good morning, francine. we see this reaction starting with a gut punch, starting to bleed into the red for the rest of the day. yes, u.s. futures are lower, but interestingly, what is doing worse right now are russian assets.

the russian stock index down more than 2%, the ruble down more than 1%. yesterday, sab, before this news, said that a biden win would be negative for the ruble, because a biden presidency is seem to be less favorable for the country, so we are seeing them get that bit in now, but more than that, the question is -- what sort of volatility will this bring? is it a time to move into havens? we see that, francine, the yen up 3%, other risk assets selling off in the meantime, brent crude and wti continuing to slide this morning. bothwere down 2%, now of them down 3%, trading under a $40 a barrel. there is a question as what consequences this could have, the effect on the economy afterwards. i mentioned havens and volatility. we are seeing a move higher in the volatility space. here is the october contract for

the vix, if you want to get short-term volatility protection. initially when you get the news, you get the trades at a one-month high. it is starting to ease of. he did not told me understand why things are selling also extremely right now. we still don't know enough details, so perhaps some of the sentiment you see there are coming off the markets, but i talks to another foreign exchange derivatives strategist and trader who told me that his clients, they want protection ,ight now, they want volatility "exuberant volatilities," are the words he used, and they will take it where they can get it. here is the u.s. dollar yen in one week, volatility. you can see this likewise had a very large pop at the start here, but this is what i will say -- yes, we get 1.6 percent on his currency cross, but even over the past month, we have had a more extreme reaction. i think part of this right now

is trying to digest the news, figuring out what it means and what it means for the polling markets, because that is one of the keys here, right? should you use this right now to bet on who will become president? the last we saw for real clear politics, biden at 60, trump at florida, and now they are starting to move even further apart, francine. dani, so much. joining us now is sonia loud, chief investment manager at legal & general investment management. have a previous chief at the u.s. equities in london. we have so many questions, so little answers. what does it mean for what you want to buy today and how does it affect your portfolio? sonja: you are right, there is lots to digest. lots of news around the virus.

economic development, and the market is really now trying to bring it all together. obviously the last thing we need right now is politically uncertainty -- political uncertainty, so we have to wait and see how the trump situation develops and the expectation around the final weeks of campaigning and the presidential election. as we know, this has been on the backbone of the majority of that year, clear that it is now coming back with much greater impacts, and as such, i would not be surprised to see volatility continue. we just heard more protections to make sure that we are having, you know, a bit of dry powder around politics. we should not forget brexit is on the agenda as well, and i am sure it will feature some. lew, for the majority of people, you stay healthy, but you are uncomfortable for two or three weeks.

for the unlucky, it gets more severe. how does this impact campaigning? how does this impact voting? : those are great questions, and as your guest said, this is uncharted territory here. if president trump is able to quarantine for a couple of weeks and recover and hit the campaign trail again, i think this will have minimal effect on the presidential election and the race. he is more, incapacitated -- and certainly if he is incapacitated to the point that mike pence has to temporarily take over as president -- that will have huge implications on the election. i think either scenario probably works to the benefit of joe biden, who as you noted is pulling well ahead of the polls anyway. i think president trump's, you know, dismissiveness of the virus and sort of standard articles to protect against the virus will come back to haunt him, because now that he has it, it sort of takes away one of his big talking points that the

democrats have overreacted to the virus. so, you know, all of us wish the president well. this is a very unusual time in american political history to have the american president with a potentially very serious illness at any time, let alone this close to an election. the next debate will be canceled, because that is within the quarantine period, so we know for sure that they will not be a debate on the 15th of october, and the president will have to stop campaigning for a couple of weeks. it will be interesting to see what the biden camp does, as vice president -- does vice president biden also take a break out of sympathy, or does he dial it back? a lot more will become clear is the day goes on. francine: lew, if the couple and his family remain healthy, does it impact the polls, because he has been somewhat dispenses of this pandemic -- dismissive of this pandemic in the past, and it will bring back the spotlight on covid-19? lew: i think, you know, my sense

of the poses there are so few undecided voters in america at this point. for percent or 6% of american eligible voters are still undecided, so it is a very small pool of people who might change their mind at this point because and hisresident's recovery. so we don't see this having a big impact on the polls. i think most voters in america have decided to do over one million americans have already voted man americans are voting at really high rates right now in early voting. i think it is the window to sort attractck undecided -- undecided and swing voters is closing if not already closed. francine: what is the one thing, lew, you think could change? does it make it more likely that it could, you know, even tighten the race further? lew: if president trump recovers and gets back on the campaign trail into weeks, we

get back to where we were yesterday, which is jill biden in a very comfortable lead, leading in most of the -- joe biden in aiken very comfortable lead, leading in most of the substantial, and a victory. if the president is forced to drop out of the race, for any reason, and mike pence then becomes the candidate, that, i think, would shakeup the dynamics and lead to a closer race. i still think joe biden would win, just because given the amount of time that is left before the election, but certainly having a new candidate on the republican side would change the dynamics pretty drastically. in terms ofnja, market reaction, are you expecting more volatility in the days and weeks to come? are you, you know, looking at havens like dollar and yen that you think markets will pylon to? sonja: i think we have to assume the volatility will be here to stay, and i think everything that was just said makes a lot of sense, and it is very clear

that the closer we get to the election date and the more it appears that biden will win, obviously the market will start focusing on the main kind of campaign action points. particularplans in that i believe will have an impact on equity markets and that has obviously been a part of the campaign since the beginning, but it is not really reflected on the markets yet, and i think the closer we come to the dates, the more we move into the center of the tension. it is about obviously this point section and potentially looking profile portfolio. i think it is fair to say that the political side is really adding to the concerns markets had over the health of the economy, whether we will get the latest labor market statistics, but it is very clear that there is much greater attention to the long-term economic scarring that is resulting from the pandemic. and actually the political

stories adding on top of this. but i would've thought that most investors will have started to reconsider risk a long time ago. lew mentioneda, there is a small possibility but still a possibility if president trump becomes very ill, that he will have to become a place on the ballot. is it something that the market is currently pricing in? is it something that they are thinking about? sonja: i think this is too early. i mean, we have to see the news flow, obviously, only appeared overnight, and as such, we will have a look at how markets are reacting today. i am sure the market will not try to price in that is not supported by the health of the u.s. president, and obviously that would only emerge over the next couple of days. if that were the case, i think we would have to assume that markets will react to and volatility, again, once more will go up. francine: and we have to be of course very careful about what

we say and we speculate on, but, you know, worst case scenario, what exactly happens to the u.s. election? does it still go ahead november 3? if the president is not fit to be on the ballot, what happens? lew: the election will go ahead. if the president were unable to be on the ballot, the republican party would -- the republican national committee would pick a new ticket, and they would almost certainly pick mike pence, vice president pence, to be the presidential candidate, and then they would pick somebody else to be the president, so it would be -- to be the vice president, so it would be a dramatic shift of the ticket. this close to the election -- just over four weeks away at this point -- i think it is unlikely to change the outcome, and i think former vice president biden would still, you know, win the election. but that is the process.

the republican national committee would pick a new candidate, and almost certainly pick mike pence to be that candidate. happens: lew, so what to the people who have already voted by mail-in? i think there are already over one million of them. lew: every state has different rules and processes, and my understanding is most of the states -- the party that the person voted for would still get the vote, so if a voter had voted for the trump-pence ticket, and then between now and the election, that becomes a pence, you know, nikki haley ticket, they would still get that person's vote. do you think -- this is speculation at the moment, because we do not know how the president is feeling or the symptoms he has, if, indeed, he has. ticket be pence-haley most likely? it really changes the debate

dynamic between the vice presidents coming up. thatit does, and i assume the debate we will continue next week with the vice president. look, a pence-haley ticket would definitely change the ticket, and i think a lot of suburban women who have been leaving the republican party and trump supporters for years ago who have switched their allegiance to joe biden at this point might consider a woman vice president under a republican ticket, so there are lots of ways that this could change the dynamic of the race. this is also hypothetical pure event pick would not necessarily be nikki haley, but certainly she would be in the running and would be interested in it. but i think there are so many different ways this could go, so the speculation is a little bit fruitless at a certain point, and, as you said, i think we would see over the next week or so how seriously the president has this disease. he certainly seemed healthy and fit this week, so i think we

will have to sort of watch that and see how his medical condition progresses, but if he really is incapacitated, and there is a new ticket on the public inside -- on the republican side, it will tighten the polls, tighten the race or does millie, but -- the race. ultimately, i think joe biden wins the election. francine: how will we get updates? will it be tweets by the president himself, or will it be a task force? lew: great question. two things. i think we will certainly see tweets from the president, and i would not be surprised if he wakes up this morning and tweets that he is feeling great but he is isolated and still working hard. and i think the white house tokesperson will be forced do -- if not daily, i mean, more than daily regular briefings to the press corps with updates on the president's condition, so i think we will start to see those happening. she has been fairly regularly

talking to the press anyway, but i think we will start to see an uptick in the frequency of press readings from the white house, starting today -- press briefings from the white house, starting today. francine: thank you so much, lew lukens and sonia allowed -- s onja laud stays with the spirit we will talk about safe havens. let's get to bloomberg first word news. here is laura white. -- laura wright. laura: extraordinary news -- president trump has has a positive for covid-19. he and the first lady have the virus and will isolate. it comes after a close aide, hope picks, tested positive. she traveled with the president to the election debate and the rally in minnesota. the president was a doctor says he expect president trump to continue carrying out his duties without disruption. we expect first lady melania trump will remain at the white house. anyays he will update on

developments. responses are coming in on the news european council president shall michelle is wishing the president and first lady a speedy recovery. he says the pandemic is a battle we will all continue to fight. there has also been an unofficial response in china from the editor of the communist party mouthpiece, "the global is payinghe president the price for his downplaying out of the pandemic." likely makeult will it harder for the president to shift the campaign away from the virus to other campaign topics, such as a racial unrest across the country. 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. this is bloomberg. francine? francine: laura, thank you so much. now, president trump's physician says he expect them to continue his duties without disruption.

the diagnosis, regardless, throws a new wrench into an already chaotic election. covid-19 has been especially risky for men, the elderly, and those who are overweight. joining us now is bloomberg intelligence director of research, samp is only -- sam fazeli. we found out the president tested positive. what kind of issues are we seeing from the white house right now? hi, francine p obviously, the president is in an age group, mass index group, let's put it that way, that increases his risk of severe covid disease and totality from infection. but those are not the only drivers of how this can pan out. your initial viral load, the amount of so-called virium, and um,lar, all these -- innocul

all these different words, the amount that you breathed in our major deterrence to how quickly your immune system can respond to it. have is a lot, then you a higher risk of suffering than if it were lower, which is why masks work. those are variables we just do not know. we do know he is in the age group that has a higher risk of 5%, 10%, depending on which estimates read of fatality. but then of course the viral load is key also. francine: we know president bolsonaro of brazil tested positive. boris johnson in the u.k. tested positive, and he was also in the icu for a couple of days. if you look at silvio berlusconi , he also tested positive and recovered. do we know why, you know, some people react better than others, and, you know, how much does it make a difference that he is president of the united states and would be getting the best care and attention in the world? sam: i am sure, francine, that

that makes a difference, because, you know, he will immediately be under the best possible care, given drugs that we now know reduce the risk of how long you have to be potentially in-hospital, etc. so at the time when boris johnson tested positive, we did not have any of that. now, i am, obviously, jessica for videos, you hope that no like being -- just everybody else, you hope that no human being succumbs to this, but the current therapy is a lot better than it was six months ago, and the president will, i am sure, receive the best care possible. but your immune system decides, eventually, how bad the reaction is. francine: thank you so much, bloomberg director of research, sam fazeli. cios go back to sonja laud, of legal & general investment management. when you heard the news, what

was your first point of call? was it actually we will add volatility and say on volatility? or are there any havens that you think could actually help you right now? sonja: no, i think for the time being it seems a bit early to tell. as your colleague sam just highlighted, we have had a number of head of states that have contracted the virus, and boris johnson's experience has probably been different from some of the others. if that experience happened to president trump shortly before the election, it would be very interesting to see how markets react, just given the level of uncertainty on how this would work out. choice rightbvious now, because, as i said, it is not just the presidential election. there is a lot going on right now that markets are trying to put in the right context, not least the question of how strong the economic recovery will be into the fourth quarter come into 2021. lots of debate around stimulus measures, which we know have

been instrumental and obviously moving markets and the economy forward. we just had other news last night obviously that the democrats have put forward another $2.2 trillion in terms of stimulus measures, which had not been supported by the republicans. a lot going on here that will have an equal impact on markets, but obviously headlines around the presidential election will add extra volatility and as such, investors will probably have to break for a period of heightened uncertainty and volatility before we have a clearer picture emerging on the back of the election, hopefully, into early next year. sonja, one of the things i was trying to figure out is does it actually impacts negotiations for the stimulus bill? does it also impact, possibly, the fed's thinking? does the fed have to issue a statement, "we stand ready to act to ensure market stability"? sonja: which i think they will have anyway. if you think of the alaska

mitigation from the fed, clearly has supported the actions they have taken, and they always reiterated that they stand ready to act in order to support markets. i think the big question that markets obviously are currently grappling with is whether the enormous amount of fiscal and monetary stimulus eventually will bring back inflation. yet, as we know today, from an economic output and standpoint, we are nowhere near closing this, and there is actually no real pressure emerging in the economy. so differentiation between the qed, andrates side and i think none of the central banks have indicated that they --ld dial back the central would dial that back. i think bond markets would react terms of the in political direction of trouble, and they are focusing very much on the economy and the output, if any, when they are closing. francine: i know this is a

really tough question, because we sometimes do not know exactly what the president and his team around him are thinking, but could we see a president trump that is much more belligerent toward china, to make sure that everybody knows he is still in charge? sonja: [laughs] yes. i think this is what we had expected, regardless, before we heard the news that he had contracted the virus, is around, ou know, making sure his stands around china is well understood, and he has reiterated it a number of times. i am pretty sure we might see more of this. although it is too early to tell, because depending on how he feels, we might see a bit of a break and twitter feeds to consider how boris johnson suffered with covid-19. francine: we also heard this morning from, you know, boris johnson trying to intervene in these brexit talks to make sure that -- or at least give them a chance to break the impact. does it mean that, you know, volatility, because of brexit,

will slow down a little bit? they stick-- or do to every little point and want to sell? sonja: i way differentiate between equity and bond prices and the currency. because i think it is very clear that the performance of u.k. assets and the equity market in particular has not really reacted to any news flow that we have had on the brexit negotiation. i think this is mostly related to the fact that international investors have disengaged with , at least until there is a referendum vote, because it was so unclear on how this would work out, and the u.k. market is not big enough in an international context that it would, you know, be worthwhile to take a bet if you do not know how the political situation is. now, the currency is a different story, because there has always been a pleasure to reflect the news flow coming out of the brexit negotiations. i would think it is good news

that boris johnson is reaching out, and they have put on, i think, a bigger conference for tomorrow, really signaling that he is ready to intervene and to make sure that we are dealing with the impact that is still on the table. francine: sonja, thank you so much for all of your update, sonja laud, chief investment officer at legal & general investment management, and of course we will have more throughout the day. this is a huge news story that we find out two or three hours ago, that the president tweeted himself that he tested positive for cova, and madame trump also has it -- for covid, and madame trump also has it. the dollar is gaining, and markets are taking a risk-off turn, as we try to figure out what is going on. this is bloomberg. ♪ on. this is bloomberg. ♪

francine: covid strikes the white house. donald trump tweets that he and the first lady has both contracted the virus. the election is just over a month away. treasuries and the end game. money floods into havens as the president's positive test acts as a wake-up call for the markets. good morning, everyone. these are life pictures from washington, d.c., capitol hill. president trump announced via tweet that he and the first lady have tested positive for covid-19 shortly after one of his closest aides fell ill with coronavirus. i imagine there are a lot of meeting rooms taken at the moment, even though it is the dead of night in d.c. and beingweight elderly raises the danger level for president trump. it has implications for the election november 3 because the campaign will be stopped

certainly for the coming weeks. it could also impact the polls. let's get to first renewed in london with four laura -- with laura wright. laura: president donald trump has tested positive for covid-19. he tweeted that he and the first lady both have the virus and will isolate. it is uncertain how he contracted the virus, but it comes after a close aide tested positive. she travels with the president through the election debate in the rally in minnesota. prime minister boris johnson is holding brexit talks with ursula von der leyen this saturday. the final round of scheduled negotiations are ending today with little progress. the prime minister is intervening directly to try to -- it remains to be seen if the sides will reach a deal. industries like behind in the recovery. slower improvements in manufacturing in the third quarter according to a survey by the british chamber of commerce. --ella the and cable during

and catering -- hospitality and catering companies were hit the hardest. the u.s. house has passed the democrats' $2.2 trillion stimulus bill. no republicans supported the package, and the white house has failed to reach a compromise. nancy pelosi says the vote does not slam the door on his cousins with treasury secretary steven mnuchin. wildfires in california continue to blaze. nearlyss fire has burned 57,000 acres, and destroyed more than 240 homes. further north, four people have been killed in the zogg fire, which set fire to more than 55,000 acres. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more this is countries, bloomberg. francine? francine: thank you so much, laura wright. there is a clear risk off food. i don't know what the market is pricing in, but there are so

many questions that we need to find out and so little answers because three hours ago we found out the president and his wife, melania trump, tested positive for covid-19. let's look at the market reaction with dani burger. what is moving the most right now? dani: part of the problem is there is still so much uncertainty, but equities in the u.s. seems to be taking the brunt. -- the higher beta asset striking the market down further, brent crude is down 3%. markets moving the most, brent crude and russian assets. theruble down 1.4%, one of worst-performing g20 currencies. equities and russia also down 2%. saying that a biden presidency would be less favorable for russia.

steven from ax i said he would recommend investors go into havens. we are seeing haven buying the yen at .4% higher. not a huge move but certainly i moved to the upside. another place you could look for protection is the vix. the vix curve -- this is different contracts on the vix. let's say you want protection out here next year, you would buy this contract. the top one is the life curve. you can see updates as we are talking. the bottom one is yesterday. interesting is the biggest jump we get is in the front end of the curve. this is the life spot vix. here we have one month out and two months out. the kink is for the november election. you can see traders wanting more protection for the election not just the election. they want it for the month intervening because there is galyconcern that sebastien told us, rhetoric with china becomes more tough during this period after the president has

contracted coronavirus. other havens, we are seeing them back off, at .4%. here is volatility on the yen and that has backed down. it was more than 1.5%. it is now at 1.2%. --se haven buying's have someone from nomura said that had -- they can afford to sit on the sidelines and wait. perhaps that is why we are not having as ferocious buying as one might expect. at the same time, we are keeping our eyes glued to the polls. stephen thinks biden's chances of presidency could search to 90%. dani burger looking at the markets. -- francine: dani burger looking at the markets. elisabeth braw, there are so many implications in the market is reacting because we don't

know what kind of symptoms the president has, how sick he could get. what are the two to three things you want to know. is it whether he changes the in the polls or if he will be incapacitated? elisabeth: there are so many implications. if he really has covid-19 and gets really ill, what happens? will the election play as scheduled or otherwise what will happen to the election? in particular for the rest of the world, as your reporter highlighted already what is happening on the global markets? what happens if this takes a more serious turn, if the president is really ill and

cannot execute his functions as president even during the election campaign? -- ifnot just a matter of america and the rest of the it servessaying that him right because he did not take it seriously, that is something that we should not do because we will all be affected by this if he does take ill. francine: are we going to see a lot more testing? is there a danger that we don't really know who president trump aid has been in contact with? every hour that we try and discuss, there are really many more questions than answers. what are wait -- what are we underestimating, that many more people could have it, or we don't know the severity of what the president could have, the virus load he has been subjected to? that is an excellent

point. he apparently got the virus from his aid. as we all know, the president and his inner circle and his -- in, in fact, are not fact, trump has often ridiculed joe biden for wearing a face mask. wearing a facea mask is a political issue, whereas in the rest of the world you wear one to protect your health. this is now affecting the trump administration quite badly. the president himself. we will be watching very closely over the next few hours and days to see how exactly his health and is likelyted to be affected. we will also be watching closely to see who else tests positive for the virus. francine: how could this actually impact the polls? is the danger that people are

worried that the president is it putd not fit, or does the spotlight back on something that the president had , which is for months the severity of the pandemic? elisabeth: that's right, so he limit therying to significance of the virus. when it first arrived in america, he said it will soon be over, and he has stuck to that narrative. obviously now that is going to be a lot more difficult. and in recent weeks in the election campaign he was able to shift focus from coronavirus to the issues that he likes to talk about. , and especially law and order. now that is going to be extremely difficult here at home because it has turned against

them. but it is not just a matter about the american election, it is about what does it mean for his ability now in the next couple of weeks to contact policy on behalf of the u.s. government? erupting, all of that with armenia and azerbaijan, normally playing a key role to make sure that does not escalate, what does it mean when fullyesident is not incapacitated, but at least partially so? what does it mean, as i mentioned earlier, if he does take a turn for the worse? there are so many aspects of this that hinge on this virus that half a year ago, or 12 months ago we didn't even know about. francine: thank you so much, elisabeth braw, senior research fellow at our usi.

let's get to first word news with laura wright. laura: president donald trump has tested positive for covid-19, tweeting that he and the first lady both have the virus and will isolate. it is not certain how he contracted the virus, but it comes after a close aide tested positive. she traveled with the president through the election debate and the rally in minnesota. a doctor says he expects president trump to continue carrying out his duties without interruption. they will remain at the white house where the medical unit will maintain a vigilant watch. he will update on any develop and's. responses are coming in to the news. the european council president is wishing the president and first lady a speedy recovery, president's battle is a battle they will all continue to fight. from the global times, "the president is paying the price for his gamble to pay down -- to play down the pandemic." presidentikely -- the

not only faces an unprecedented health challenge, and also logistical issues. the white house has canceled political events today, including a rally outside orlando, florida. fundraising trips are expected to be canceled as well to the key battleground state. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more this is countries, bloomberg. francine? francine: thank you so much. joining us to talk more about the markets and more about the developing story on president trump and his wife both testing positive for covid-19, i'm delighted to be joined by scott thiel from blackrock. good morning. how much a little of the will we get given we don't know how sick the president is, we don't know how it impacts the polls, we don't even know if the fed will have to step in and stabilize the markets if volatility continues.

if we look at the reaction thus far, equity markets are sold off, but fixed income markets have been very stable. we have the vix around 28, 29, but the forward vix is above that for the period of the election. treasury yields have not fallen that much. part of it is the uncertainty, which is difficult. there are many different pathways this could obviously take, and i would pause here for a moment and wish the trump family well and that president trump and milani would recover quickly. but from a market perspective -- and milani a would recover quickly. it is challenging because there are so many different pathways. --ould make one observation two observations, one from a market perspective and one from of that from a fundamental perspective. from a market perspective, the treasury market is relatively muted. 24,treasury yield on march

the day before the fed announced its major policy initiatives, is basically where we are today. we have been up and down today -- the volatility in the treasury market has been very low. the use of treasuries as a hedging tool is something that we have been discussing quite a bit at blackrock and terms of its effectiveness. here is another example where you don't really, in this period, you have not gotten the same reaction with treasury yields you have in the past partly because yields are so low , and the fed policies are so pervasive in the treasury market. that is observation one. the second is that one of the areas we have been focused on in one of our themes, which we call activity research is the interplay of the virus outbreak and the economy. so this idea of mobility -- our people more concerned about the our peopleted in -- more concerned about the virus

invested in -- are the people more concerned about the virus invested in economic activity? this focus on mobility impacting economic activity. francine: i am not that familiar with white house protocol and how you test the people around the president, but i imagine for most of the day we will have these kinds of headlines -- so mike pompeo saying the last time he was with president trump, september 15, we confirm that mr. pompeo have tested negative for covid. they were just tested today. the other question -- this was brought to my attention by a viewer that wrote in -- i urge everyone, especially with this developing story, we are trying to figure out the developments, to write in. the president -- saying the president can only blame himself. let's bring up that tweet.

that president trump could react angrily towards china. is that something that the market could prepare for? getting away from the virus spotlight, we see something ask leading between the u.s. and china? scott: i think it is very hard to say what kind of immediate outcome there is. that tweet, i am not going to comment on that specific tweet, but i would say that one of the things that we have noted about this election process is that americans across the board obviously are focused on the u.s.-china relationship, not just a republican issue. that has always been a source of volatility, and i think that will continue to be so. perspective,s obviously the succession has to , nancy pelosi, chuck grassley -- they have to be separated from the president. on whoard to speculate

has been affected and how that process has gone forward. but i would say that volatility is very high. until we get information around it, it is hard from a market perspective to position given the outcomes are very varied here. francine: do you think the market is pricing in a winner for november 3, or even before this, were they on the sideline for the moment? scott: it is a good question because the candidates are very far apart from each other on policy, and obviously the house of representatives passing the fiscal package is an example of that, where there is a very different idea. in our view, if vice president biden were to win and also the democrats were to take the senate, we could have a very big fiscal spending package to deal with both the covid crisis and kind of the ideas that

infrastructure spending, green initiatives that the president and vice president biden have put together as part of his platform. that has not priced into the market as of yet, but more of a gridlock market is, where you have the president and the senate and different parties, it is not a clean sweep across the elected parts of the u.s. government. so the short answer is, the polls suggest that vice president biden is winning the election, but the markets are not in our minds priced for this clean sweep, which is something that we think would have the biggest kind of change in markets and policy if the democrats were to have all parts of the government. that is kind of a strained answer, but do you see what i'm saying? the sweep is the biggest change in policy. francine: it makes 100% sense, but if you look at the impact on the stimulus package, doesn't

make it less likely we will get a different package in the u.s.? scott: do you mean the president's illness? francine: yeah. scott: i'm not sure. it depends on the level of the onus that he has, whether he is incapacitated or not. but in that situation, mike pence would take over, so i don't know that it necessarily -- that would be speculating to say that it would impact the negotiations. i think again, coming back to what i said originally, an important take away from this is that the reinfection rates and how that impacts the real economy, that is something that investors focus, and i believe regardless of the outcome of this, the present contracting the disease will focus investors more on this activity of how the virus and infection rates play

into economic activity and asset allocation. the other things are obviously very hard to speculate. you soe: scott, thank much for being a really good sport because we are trying to feel our way around to understanding what the implications of this are. one of the other things we should focus on is whether this delays the reopening of the economy because a lot of governors will be concerned. scott thiel, managing director and fixed income strategy on blackrock. for an update on the news, let's bring in annmarie hordern. annmarie: good morning. we have news that president donald trump and first lady melania trump tested positive for c covid-19. the spokesperson for the white house said that contact tracing is underway for both the president and melania trump. they obviously have a big staff and they travel frequently. just this week alone, the president went to new jersey, minnesota as well as cleveland

for the presidential debate. the second thing is that what happens next is usually a 14-day quarantine. the president was scheduled to have upcoming rallies october 2 in florida, october 3 in wisconsin, october 5 and october 6 in arizona. i bring this up because these are seen as battleground states. in biden is up four point arizona according to the latest new york times poll. question, does trump take these campaigns, these rallies virtually to computers, to zoom, etc.? these were really highlights of his campaign in 2016. as kit juckes pointed out, speaking with me in the 6:00 a.m. hour, vice president mike pence likely will get a lot more intention -- a lot more attention, and that rally becomes a much more high-profile event in salt lake city on the

seventh. what happens with the fiscal stimulus deal? does it muddy the waters for those negotiations, or is this seeimpetus for lawmakers to if they can get something done as the country battles covid-19, including the president. francine: thank you so much. joining us from our fx market is jane foley. one of the angles that we have not really been exploring that much is, if you have a president, the most powerful man in the world, that tested positive, does it make it less likely that the u.s. economy can continue its reopening phase? does the economy almost automatically get a hit because governors and states will be reluctant to reopen at this point? jane: i think that is possible, certainly because the market, consumers are going to become much more nervous about covid-19. we've got to remember this news about trump comes on the heels of significant concerns in

various parts of the world, including europe, about a second diagnoses.id-19 from this point of view, is it likely to underscore concerns? if the president can get it, my goodness, anyone can get it. but concerned about how his health progresses over the next couple of weeks -- if he remains well, there will be a lot of relief in terms of risk appetite. but if he deteriorates, that really brings a lot of confusion. we have heard that mike pence's position becomes a lot more important, who is going to be the winner of that campaign. that is something that the markets have not paid a lot of attention to. very much it depends at this point about how trump's health sustains over the next few days or the next couple of weeks. francine: that is something we will continue monitoring very closely. how does it impact stimulus talks? how does it impact the polls?

an fxfficult is it as strategist to figure this out now? jane: in a way, you could argue becausebecomes easier there was so much political safe haven, for currencies, we have seen today the end moving, -- the yen moving. some of the headlines that we have had in recent weeks have been worrying the market already -- contested elections, civil unrest, the covid connections, tensions with china have all more.itting the headlines and this is likely to help those safe haven currencies. francine: what about the yen today? honest, does it make the fiscal stimulus deal more likely or not? there were so many other

factors, too. what about the payrolls number today? if that is disappointing, perhaps that will be an impetus that politicians need to sign off on the deal. francine: is it yen and swiss, or is there something that you would be hedging right now? scott: i think the yen and -- jane: i think the yen and the swiss and the dollar, given the huge amount of liquidity from the fed we have seen since march, the stress that we are going to see coming in the dollar has lessons, but it certainly can gain, particularly if we get more tensions with china, if we do get a contested election, etc., the dollar can gain, and certainly there should -- there could be some short -- some shortcomings. the yen and the swissie are high on the you recovery deal. will that be delayed? will that start to sway? there are other factors in the

mix, but i think the yen, the swissie, and the dollar are all potentially starting to gain on the bad news. francine: thank you so much for the update, jane foley from rabobank. we are still trying to figure out the full market implications, but we are trying to get you what the market should at least be thinking about. another marke market i'm looking at -- another market movement i'm looking at is gold. stock selling off in the u.s. because of the political risk, and that is a sign that the metals may appeal long-term in the states. bloomberg surveillance continues in the next hour. tom keene joins me in the next hour. more of our top story throughout the morning. this is bloomberg. ♪

francine: covid strikes the white house. donald trump tweets that he and the first lady have contracted

the virus. $40. breaks below the election is just over a month away. they flows into havens as president's positive test access a wake-up call for the markets. it morning and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene is in new york. there is no story in town other than the fact that the president has tested positive. i think we start from the very beginning, either the president makes a quick recovery and we look at the polls and whether that impacts the election outcome, or he doesn't and that brings us into the fog and what could happen. ," the fog of the medical statistics, one thing we know is that we are much smarter than we were in march or february of last year, and those are strict test -- those are