economic shock in over 50 years. >> they will be job losses in some sectors, but there will be job gains and others. >> i think we will start to find a degree of earnings upgrades. >> the numbers don't tell us as much as we need to know about the future. >> the fed has been flattening the curve when history says we want a steeper curve. >> one thing i think most everyone missed is that an economy adapts. >> the market will hear what it wants to hear, and right now this market wants to go higher. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from london and new york, for our audience worldwide, good morning, good morning. this is "bloomberg surveillance, " live on bloomberg tv, radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. with equity futures positive 16 point this monday morning, three weeks tomorrow, the election just around the corner. tom: we are going to see

president trump in florida, i noticed about an hour ago. he will leave in the early evening. i believe vice president biden scheduled for ohio. what is so odd is the relative invisibility of the leader in the race, vice president biden. this was a trump weekend they trump discourse. jonathan: the president has been in the spotlight for all of the wrong reasons the last couple of weeks. i think the former vice president wants to leave him there. not just orlando later this evening. i believe pennsylvania tomorrow, iowa wednesday, and thursday in north carolina. the numbers at a national level, and it some of these states, particularly iowa, where he crushed hillary clinton four years ago, much tighter this time around. tom: the polls are really showing the challenges there. what is important for me, for our international audience, it is surprising how the voting

rules and the voting process devolves to the state level and even to the city and county level. very different from the united kingdom, which a much more london federal view. jonathan: let's just say things are very different not just in the u.k., but across the whole of europe and it comes to election campaigns. we will talk about that later with kevin cirilli. lisa abramowicz, another day of fiscal headline roulette, everybody's least favorite game in this market. lisa: you managed to avoid talking about fiscal talks for that entire intro, but we will continue to talk about it. christine lagarde is opening up the imf and global bank meetings that starts today, and it will all be about fiscal support. very unclear if this headline roulette, what can actually get done ahead of the election. k to expected fiscal tal continue with the milken

institute today. expected talk about fiscal. expect them to talk about how the stock market continues to rally, and how much has been pumped into the system. president trump is delivering remarks at his first campaign rally since his covid diagnosis in sanford, florida. it is between daytona and orlando, a population of about 50,000. expect the focus to be on president trump's health and whether he can regain any of the momentum he seems to have lost based on all of the polls we saw over the weekend. jonathan: we are told he is now immune. i know tom keene has a few things to say about that a little bit later in this program. tom: wait a minute, wait a minute. before the data check, you do have a protective glow. you have a protective glow this morning, and it is good to see that. jonathan: i don't think i'm immune. let's put it that way. is anot sure this glow

response to my immunity to covid-19. it might be makeup. it might be mac 35, or whatever the number is. tom: let's get the data check. jonathan: equity futures up 15 on the s&p 500. didn't take long, did it? futures up 0.4%. treasuries closed for columbus day. i think the chinese currency is getting attention once again. last week it was about tolerance. this week, a lack of tolerance for chinese currency strength. $1.1793.ar, a big focus on restrictions across europe, including the united kingdom. i won't speculate. i will just give you the times. 3:30 local time in the u.k., we will hear from the prime minister addressing the house of commons. at 6:00 p.m., and address to the nation, together with the scientific advisor and chancellery of the exchequer rishi sunak.

tom: is this any way to run a country? i try to understand this. i get it is liverpool and newcastle, and there are some really bad statistics there, but is shutting down a pub an hour or 30 minutes early really going to make a difference? jonathan: the simple answer is i have got no idea. a little bit later, three high, andium, very high. let's hope it works. i think the jury is still out as to whether the restrictions they introduced a couple of weeks ago have made a difference yet. for europe, look at the bond market this morning. record lows in italy once again. the bond market with a sizable bit. the trade for treasuries versus bunds, short treasuries, long bunds. a trade many people are kidding behind as well. tom: for our friends on radio and tv, that would be the real

yield. advancing one of his properties. jonathan: dean curnutt joining us now. the volatility term structure, the story around the election now being priced in and priced out? dean: when we look at volatility -- can you guys hear me? lisa: we can hear you. jonathan: we can hear you, dean. dean: when we look at volatility, we can look at it across strike and across time. when we look across time, that thing you say, this called the volatility term structure. october,ok at november, december. because this has been on the calendar for months, the market has differentiated, sometimes options andtween volatility that expires before the election, with the premise

that the election would create a potential he significant move in the s&p in and around the data itself, so the outcome would result in a lot of volatility in the s&p. the second one is that the market, at least as of a couple of weeks ago, started to think that this notion of a contested election would lead to volatility on an ongoing basis, so we started to see longer dated vix futures that expire in december and january also bid up quite a bit. it has been interesting. tom: a clinic there on the vix. he will continue with us through this important our on the game theory of volatility and how it folds into futures, up 15. right now we need to listen to a moment in sweden today. once a year in october, we listen. -- the year's prize royal swedish academy of today decided to

award the prize in economic to paul milgram and robert wilson for improvements to auction theory and invention of new auction formats. tom: the celebration today in california, more than anywhere else, at stanford university. i think of frequent guest michael spence and all of his work in economics. it devolves down to the leadership of robert wilson out of nebraska. he has held court since 1968 on the theory of syndicates at stanford university. professor wilson, for all of us, for michael mckee, congratulations on this award. were you surprised? >> yes, i was surprised. theeemed like most of interests in auctions peaked 10,

20 years ago. tom: i look at this, and we know from stanford the monetary theory of john taylor and the hoover institution and such. describe what auction theory means for our organization, for our societal organization, where stanford has led for 40 years. >> we think of it more generally in terms of auction design, that there are ways in which the institutions, the procedural rules and so on, the ways in which we allocate resources can be improved. a lot of times, these minorentions are really changes on the margin, but in some cases, they create entirely new markets. spectrumat in the markets. my colleague worked on the market for exchange of kidneys among donors and recipients.

so there are many novel applications in which we create markets, people participate, and they work and work efficiently and with good incentives. think, robert wilson, of my colleague jon ferro bidding for a piece of art in london. beyond theoes so far options we understand, the options of the art market, or maybe the options for a foreclosed house. what does our audience worldwide need to know about where the science of auctions is going, and what it means for us worldwide? robert: we deal with very complex, multi-commodity kind of situations. there are many different spectrum licenses. in electricity, we are talking about electricity at various times in various places. systems arees where

allocating a huge variety of resources continuously over time . in the case of electricity, it is a complex -- so much more complex than a single piece of art being optioned, and then the next one in the next one. instead, these are cases at which people are trying to buy things.packages of in the sense of electricity, you have to have the energy, the transmission lines, all of the connections that are necessary. you are bidding for a complex commodity, and there are many of them. jonathan: this is -- lisa: this is an incredibly relevant field to study in our digital era, as well as the era of central bank intervention, where a lot of people are wondering whether efficient markets still exist among public equities and public debt. i know you focus on the less

mainstream asset classes and how to auction them efficiently, but based on your intensive knowledge, how inefficient have public markets gotten with that central bank intervention? [laughter] beyond myat is way expertise, i'm afraid. i couldn't give a reliable answer. i'm sorry. lisa: all right. in that case, are there other asset classes you foresee moving to a sort of auction format in our digital era that perhaps haven't been thought of in that way? robert: a good one to think about is something like electricity because we have all for solareeds now powered energy from solar power and from wind, and it is quite variable. we need to create new kinds of markets for those kinds of variable resources to keep the supply provided to beat the demand.

that is a new and different kind of application. tom: i want to take you beyond the theory of syndicates and what seems like ancient auction theory to what we are dealing with every day, which is our new digital dominance, the options that take part obviously on ebay, but far more, the options and the information flow led by apple, google, and the rest. what would you presume to be the future for how we bid each day within technology? robert: i think if you take those kinds of auctions as examples, what you see is they are mostly automated. these are done minute by minute or second by second, and they bots, orwith bidding algorithmic methods. so there is a continuous reallocation of resources. i think you are going to see a lot more of that in many fields. tom: robert wilson, thank you so

much for joining us. the nobel prize winner with well.sor paul milgrom as jonathan: just to call a $1.1 million prize this year and upgrade from the year before, we can see how we put that money to work with dean curnutt. we were talking about the volatility term structure just before turning to him. it has been faded, volatility in the back half of this year, over the last couple of weeks. how do you fade volatility now? dean: one of the things we should contemplate in terms of volatility is, like any market, it is an outcome of supply and demand, meaning the price of volatility in the market reflects where two people found a way to do a trade. one of the dynamics that was occurring over the summer that started to ease off is this tech stock mania. look at indices like the new york faang index, tesla or

amazon. the speed with which these stocks were going up, and then the retail almost reflexive participation in that lead to a tremendous amount of call buying in the highflying tech stocks. if you look almost to the day when the tech stocks peaked, right around the first day of september, since then, things have been down a little bit. not tremendously, but certainly not high-performance to the upside. the volumes have declined in some cases dramatically. what has happened is, thinking about it from a supply and demand perspective, the demand for optionality in the market has started to reseed because the payoff to being long upside calls has started to reseed. ,hat is one part of the story that because there is less demand, the price of volatility is going down. some of it i do think is biden pulling away sufficiently, such that this notion of a contested election may be less of an issue for the market.

but some of it is a falloff in demand. that is allowing volatility to clear the market at a lower level than it was doing in the peak several weeks ago. jonathan: i had this conversation with mohamed el-erian on friday. he price seems to be shaping narrative. it is not the narrative driving the price. do you see that going on here as well? dean: a tremendous amount. the street is in some ways hopelessly addicted to backfilling the narrative. there is a lot of confirmation bias. we stare at prices and try to figure out what the market is telling us. i think that is a useful exercise. but again, i think a framework that brings to light this notion of supply and demand, especially as it comes to vol, it has been a really interesting year for volatility because we had a couple of these dynamics. one is this incredible demand from an unusual source, the retail source for calls in tech

stocks. i would .22 things on the supply side of volatility that are important -- i would point to tw o things on the supply side of volatility that are important. there was a massive destruction socapital in the space, there is less supply of volatility. the second thing is, in and around the election, and incredibly political event for our country, polarizing, but even for the markets themselves, my sense is that risk managers would prefer not to lose money on the election. it is one of these things that, especially as time draws nearer, i think people's risk limits are going to be called into question, and the ability to provide capital, hedging take capital into that event -- hedging type capital into that event, is going to be called into question. may it be less so if the market becomes so convinced that a

biden win is baked in, and the senate win increasingly as well? that is another thing to really watch as the street's ability to provide hedges over this period is compromised by the unusual nature of the event, and the reality that it is not analyzable in the traditional sense that wall street likes to analyze things. lisa:lisa: given the fact that there does seem to be a complacency around thebull long call, how susceptible our markets to a violent move should there be a contested election or an outcome that people are not expecting? dean: price would tell you more so than a couple of weeks ago, there has been a fading of things that measure volatility, whether it is option prices or vix futures. december vix futures are down from 32 to 28 over the last couple of weeks. that is quite a big move. i think more so than the peak

couple of weeks ago, there is this complacency. i think one of the big risks is that the polls start to narrow significantly. i think that is going to enable trump to potentially gin up controversy, and the market might not be well suited for that given current prices. tom: dean curnutt, thank you so much, with macro risk advisors. some interesting dynamics this morning. we welcome all of you on bloomberg radio and bloomberg television. now to begin our political coverage for the hour, kevin cirilli, our chief washington correspondent. what is vice president's gold in ohio today -- vice president biden's goal in ohio today? kevin: i think it is to try to get it competitive for democrats. i think it is a show of really where the biden campaign feels they can expand the electoral map, including not just in a state like ohio, but also like

arizona. jonathan: where can the president make a difference at the moment? suburban women with a huge lead for biden. older voters flipped where they were four years ago. where can he make a difference? kevin: i talked to sources on the president's reelection campaign. this is a week where the confirmation hearings for judge amy coney barrett are set to begin. in many ways, this is how republicans feel they could be able to draw a contrast in terms of certain swing districts, especially if she faces questions from liberals that, quite honestly, might take the same strategy that they did for the last supreme court justice nomination process. but secondly, to be completely frank with you, i think the president;s reelection campaign -- the president's reelection

campaign is trying to attract republicans that typically don't vote, to get them to turn out in order to run up the margins. lisa: in the meantime, i don't want to say defections, but there seems to be in edging away of republican leadership from president trump he falls in the polls. how much power at this point does president trump have to wrangle mitch mcconnell and other leaders into accepting a bigger fiscal support plan in order to make a deal with pelosi ahead of the election? kevin: it's a good point, especially when certain swing state republicans are trying to encourage their constituents to vote for them, even if they are voting biden at the top of the ticket. it is a very dicey political risk that many of these swing state republicans face. if you look at a state like north carolina, for example, where senator tom tillis is locked in a dead heat battle against cal cunningham, the democratic challenger, it is a tough position for many of these

republican incumbents to begin. the president has delivered mixed messages as best in terms of his negotiations on fiscal stimulus. tom: we have just been talking with the newly minted nobel laureate robert wilson. auctionou studied his work back in school. kevin: all weekend. [laughter] tom: the information gap is what they won this award for. how blind are these candidates and their teams right now? what is the information gap they have 22 days to the election? spoke with some sources last week in utah on biden's campaign, and they were uneasy. they are looking around, trying to figure out, we have been here before in 2016, when they thought they had it in the bag with hillary, and it turned out not to be the case. i think there is an uneasiness and an angst.

tom: but is there a plan? the president is going to wander down to florida now. he's going to do his thing. i get that. but do you get the feeling that there is some sort of cohesive plan, or are they just winging it in this odd 2020? kevin: i think there is a large extent, to quote the great aaron sorkin in "the west wing," they are all just winging it. i think that is a really smart point because both of their strengths have been taken away from them. joe biden, and the sense of retail politics. president trump in the sense of massive campaign style rallies. both of their strengths have been taken away from them. we have talked about in the media, the conversation about getting face time with sources on either effective campaign. but even beyond that, there's not really an ability for the staff on either side to be seeing each other, or even for some of the elite strategists to

be able to get face time with staffers. there is none of that happening. it is weird, for lack of a better term. it is very weird. jonathan: i just want to get in a final question and build on something lisa asked you. want to understand from the conversations you are having with republican senators whether their association on the campaign trail is helping them or hindering them. kevin: it depends on the stage. it is a great question. in battleground states, there is an uneasiness. in more red states, were typically, if you think about it from that perspective, any more red state, they don't want to spend more money. but in a swing state, there is an uneasiness, and quite honestly, they do want to spend more money. there is a tension on the ideological spectrum that is being pulled every which way. jonathan: great to catch up as always. it is a question at the moment that really matters.

and kevin tried to answer. just how much distance have republicans put between themselves and the president? when it comes to the fiscal effort, the only question that really matters is how that spread actually closes because if the administration has to come up, the likelihood that gets through a republican-controlled senate diminishes. that is the issue right now. the $2 trillion package passed the senate? mitch mcconnell hasn't given much guidance on that. tom: what has occurred in the last 48 hours is a new focus on the various senate races. i really felt that yesterday. there's a derby going on, and it is great to talk about trump-biden, but there's other huge institutional force in the senate. . jonathan:jonathan: we will talk about that a little more a little later in the program. coming up next, betsy stephenson, former economist at the u.s. labor department.

alongside tom keene and lisa abramowicz, i'm jonathan ferro. heard on bloomberg radio, seen on bloomberg tv, this is "bloomberg surveillance." ♪ so you're a small business,

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♪ jonathan: from new york and london, this is "bloomberg surveillance." alongside tom keene and lisa abramowicz, i'm jonathan ferro. two hours away from the opening bell this monday morning, with equity futures adding some weight to last week's biggest gain, the biggest weekly gain on the s&p 500 going back to july. we are up 16, 17 points higher. stronger dollar, euro dollar down to about $1.1790, down about 0.3%. a little bit of pushback from chinese authorities. remember, the treasury market is closed today for columbus day. but in the bond market in europe, we do have a bid. we will talk about that more a little bit later. -- forls for morse more fiscal stimulus are loud and clear from the fed.

neel kashkari of the minneapolis fed weighing in. >> the data is very clear. the strong recovery we saw in june and july has really flattened out. the virus is climbing now again around the country, so yoully in my region, are seeing consumers pull back and not want to go out and take that risk again. unfortunately we still have a long way to go in this pandemic, and that means we need continued assistance. jonathan: that was neel kashkari of the minneapolis fed talking to cbs over the weekend. it is not just about whether we get it. it is how quickly we get it. wrote, "whether a positive response is written, there is potentially dynamic impact." that seems to be lost on market participants. when it comes matters also. tom: some of these debates, the of it is -- the when

really important. there's a complexity to the debate. atsey stephenson joins now the ford school of michigan, professor of public policy. what i want to do to start is go back to first principles, which i am sure you studied at wellesley a few years ago. the first principle is if you have debt, you need economic growth and a growth rate that is better than good. are we in any way certain we will have a growth rate to help us out of this huge amount of debt? is we'veell, the thing got to do the stimulus spending in order to get the growth rate that will help us out of the debt. it is absolutely the case that one of the best ways to deal with debt is just to grow so fast that the debt shrinks as a percent of gdp. but the idea that when the stimulus comes, it needs to come

rest, the whole point of the is that we need to restore potential gdp. we need to get to potential and go back to growing. if we put ourselves on a permanently lower level of gdp, so we are never quite getting back to potential on a lower growth path, so we are never quite back to where we were, that is a problem. there's lots of reasons we could end up doing a lot of permanent destruction. the more businesses that would have been valuable -- would have been viable that would be hard to put back together again, that causes problems. families that go through bankruptcy that are never quite able to get back on their feet again, these things happen, and that is why it is so important for governments to respond in a timely way. important to respond in a timely way because it alleviates the suffering.

we can tell the economic story will really get us back to where we were, get us on a strong pass, but every day they delay, there is somebody that puts food on the table that is at risk of losing their home. tom: that is what we do market economics, and you are clearly under the academic purview, but where is potential gdp? there is a belief that we go back nostalgically to a time of what we would call substantial gdp growth. are those days gone? betsey: no. you guys know the whole secular stagnation argument as well as i do. estimates i have seen of where growth can be is that it is lower. there is concern that we have run out of ideas in a way that is just going to make it harder for us to grow faster. but i have to tell you, i go to tech conferences every year.

is artificial intelligence going to take our jobs, but make us rich? i am impressed every year by the amount of progress i am seeing there. so i think there's actually a lot of room for us to do things better, faster, cheaper. that is where our growth comes from, and i'm always an optimist we can do it. i think there's also a lot of untapped potential, and that is why investing in people is so important because we can harness all of that untapped potential. that is what will fuel growth. and realize, if you go back to the 1970's, 1980's, a large chunk of our growth came from the rise in female labor force participation. if female labor force participation in 2019 had been back where it was in the 1970's, our gdp would be about 15% smaller. think about that, and realize

that women's labor force participation right now is back age int was in the prime the mid-1980's. if you want us to get back, we've got to get all of these people back in the labor force. wo really powerful concepts you have touched on in just five minutes. something i have heard, the longer we are below potential, the lower potential growth might be in the future. but when you talk about policy, you're talking about structural initiatives as well, not just throwing issue at the -- throwing money at the issue. what is the urgency to do something quickly? betsey: i think we need to do something quickly, and that is the idea that we need to get money out the door. that is the same thing they did with the c.a.r.e.s. act. i think that is money to individuals, two families, to make sure they can keep spending so that we don't end up with

demand driven problems. we are seeing demand driven problems start to pick up. we saw demand driven problems were huge in the spring, so that is getting money to people. you get money to businesses to help businesses that can make it to the other side to survive. we are going to lose some business is for sure. that is why the next step for government is going to be thinking about how do we transition people, how do we provide the job training programs, how do we provide the liquidity in markets for new businesses to be able to get started. how do we nation of change. aere i think we need government with a strong set of stimulusthat is on the package. i think we will have to wait and see after the election because nobody can take that kind of strong initiative now, but that

would be where i would hope we see, and the early spring of next year, come plans around how we would move the economy to the next stage because there is going to be some permanent realignment, some permanent sectoral shifts. lisa: to build on the timing of this plan, maybe not the one next year that focuses more on the skills gap issues that you focus on, is the question of fiscal austerity at a state level, the idea that states and local governments are saying to the federal government, we can't go into debt the way that you can, and we are running out of cash, we are going to have to lay people off and cut services, how different is the scarring that comes from a celebration of fiscal austerity on the state level that you see as posing a risk to the economy if there isn't this near term fiscal support bill that passed? think the fiscal austerity of the states go through in modern times has

really caused recessions to drag deepen, and the federal government should prevent that from happening. but it is even worse right now because what happens is the states have to start laying off teachers, which they will. we are already in the situation where there are a lot of parents who have cut back hours or have quit jobs because they've got kids home from school. we got a lot of kids who are period of from this eight months where their school hasn't been normal. they are going to be going back to school in a world where the ones who are in school are wearing masks, they have to keep distance. how do we do that with fewer teachers in the classroom? do parents feel comfortable that that is a place they can send their kids? i just saw someone talk about future u.s. productivity and

future u.s. growth, saying one of the big, open questions is what are we doing with these kids, and is there some sort of permanent loss of human capital? this could not be a worse recession for states to have to lay off state and local workers. is there permanent problems there? it really depends on what they are choosing to do. are they having rolling furloughs that cause a lot of harm and hurt in terms of state employees, households? or do we see government workers decided that it is not worth it, they are not going to stick to these jobs? do they do permanent layoffs? one thing i don't hear anybody talking about is we have never seen such a decline in the labor force participation in people over the age. of. 505i think you are going to seek -- the age of 55.

i think you are going to see a lot of older workers deciding to retire early. that is going to put a lot of strain on social security, on medicare, as well as on the economy as we take all of these experienced people out early. that is going to give us a bumpy road over the next five years if we are losing too many older workers at once. jonathan: great to catch up on a really important policy conversation. betsey stephenson, professor of public policy and economics at the university of michigan. in some ways, it is quite appetite of the policymaker to do even more at this point has diminished. i think that is a worry at the moment, that we start to see some similar restrictive policies come through that the willingness to offset it with fiscal. tom: no question about it. i go back to something i think you are steeped in better than i am with your coverage of the ecb, with his -- the ecb, which

is the simple word austerity. there is a concept that is deeply entrenched and really pushing against what professor stephenson talked about. jonathan: it just depends whether they are willing to carry on following through, and what we are experiencing right now in the u.k. is more restrictive policy from the chancellor that hasn't got the same commitment to do more. from london and new york, this is "bloomberg surveillance." ♪ karina: with the first word news, i'm karina mitchell, nancy pelosi -- i'm karina mitchell. . house speaker nancy pelosi and treasury secretary steven mnuchin are expected to continue talks on fiscal. meanwhile, the president is brushing aside criticism from senate republicans who say it is just too much money. hisbiden is maintaining double-digit lead in the polls.

a new survey from "the washington post" and abc news had the candidate leading president trump did you 52% to-40 2% -- trump 48% nationally. he is tied in iowa, a state won easily and when he 16. president trump tweeted that he was immune to coronavirus, but twitter market as a rules violation by tweeting potentially harmful information relating to the coronavirus. windy and hot conditions returned to california this week. pg&e says it may need to cut off power in the northern part of the state to reduce chances of its equipment starting wildfires. the utility emerged from bankruptcy in july after paying more than $25 billion to resolve fire claims. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm karina mitchell. this is bloomberg. ♪

>> there is a real recovery going on in china right now. it is better than what you are seeing around the rest of the world because their solution to

covid was so dramatic and so quick. what you are seeing is not propaganda. you are seeing a recovery. it is just that they can't help themselves. they can't say we are doing well, but we are not back where we want to be. they have to say we are back to our old levels of growth. jonathan: that was leland miller , china beige book ceo. alongside tom keene and lisa abramowicz, i'm jonathan ferro. this is "bloomberg surveillance ," live on bloomberg tv and radio. the equity price action this morning shaping up as follows. plus 19, up about 0.5%. more weight to the s&p, staring down 3500 on futures. stronger dollar against the euro and the chinese currency. $1.1791.ar at a lot of attention on china in the currency market, but also on covid-19. your geography on china for superior to mine. an eastern province city, 12

infections, and they are itowing 9.5 million tests at over. the next five days is a -- added over the next five days. it is a remarkable response. tom: we welcome all of you on bloomberg radio and bloomberg television worldwide. in the karen -- enda curran joins us now. it is a part of china we rarely talk about. explain the worldwide distinctions and the unique features of northeastern china's. is the major port for commodities going into and out of china, so it is closely watched in terms of its gauge for industrial activity. it had that scare something

available cluster of covid cases, but you can see how aggressive the authorities are responding. they are talking about 9 million population tothe try to figure out where the cluster is and to break immunity transition. that is what china's policy has been from the start. they don't want to do spread from the port. one of the reasons it broke out there is because it is a very busy port. they don't want to spread to the rest of the region. they want to break that community transmission chain, and that is why they are being so aggressive about it. lisa: china is being incredibly aggressive. other nations, including the united states is not. that is why we see china's economy continuing to improve at a faster pace, which has led to the stronger yuan. how concerning is this to officials within china who seem more amenable to the idea of a little bit of strengthening in the currency? absolutely, the interest

rate differential, the money pouring through china is all part of the yuan strengthening in recent months. dollar witness allowed it to hit an 18 month high last week. the central bank does not want a one-way bet on the yuan. they made it more expensive to change the rule on those who were trying to bet against the yuan. what they want to do now to put a little bit of volatility in the markets, they don't want to trigger any panic. they don't wanted to weaken dramatically or anything like that, like in 2015. depending on your perspective, it was a botched devaluation. it triggered all of that volatility. enough for now. they want to cool things a little bit. jonathan: there is a worry in

the united states that the recovery is already losing momentum. in europe, you could make the argument that it is already stalling. in china, the recovery continues. how much of that success is bleeding through to the rest of the region? enda: there is a view this time around the because china hasn't gone gangbusters on the stimulus like they did after the global financial crisis that it is not having a spillover effect to the rest of the world. you look at the trade data with the u.s., for example. china's exports to the u.s. are going gangbusters, but china isn't necessarily buying as much as was anticipated in that trade agreement. samen't having the dividend for either reginald -- either regional or global growth . we will get an update on how their export and import story is going, but regardless, we do know that the broader recovery in china is still on track.

it is steady and stable. we know that the manufacturing and exports and other things came on a month ago, and the consumer is now slowly coming back on stream. but i think the idea that china is -- isn't quite playing out the same way this time around. tom: if china is doing better, is hong kong doing better? signs are perhaps that the economy is bottoming out. the airport isn't really functioning like you would expect for a major financial hub. i think on the ground, perhaps the retailers were talking about some sentiment improving, some of the social distancing restrictions have been eased, but others are still in place. for example, no more than four allowed at a table in a restaurant. to benancials seems holding up quite well. there are some big listings

coming up. the trade story is holding up. hong kong is also a huge port. but it is the retail side of things that is quite low. tourism isn't there. people aren't spending like they were. there is even chatter that today we are entering a fourth wave, so even though cases are quite low, there is concern that they will take off as we head into the winter months. so for hong kong, like everywhere else, it is going to be a long winter. jonathan: stay well. great to have you on the program. curran darrenda kong.ong -- there in hong there's one extra element to the chinese trade over the last couple of weeks, and that is the biden trade. it speaks to a former vice president that this market has apparently decided will be much softer on china relative to the current president, if indeed he is elected. tom: i don't know if it is a biden theory or a biden policy,

if it is the market pricing and perhaps an end to the tensions that president trump felt was so comfortable. it is interesting to see. you really wonder how that shift will occur, if it occurs. jonathan:jonathan: that is the , the predictability policy around a potential biden government. it doesn't make the argument that he would be just as hard on the world's second-largest economy that strong, if the market has decided he is going to be that much softer. lisa: there are different theories here. one of the that a president biden would be less hard on china. there's another theory that the more consistent the policy, the more confident people will be to actually do business. how do you even get business done in an environment of incredible uncertainty and arbitrary decision-making? i think that is also something people talk about. on then: coming up program, morgan stanley's head of fixed-income. good morning to you all on this

monday morning, with equity futures advancing. three weeks tomorrow, an election just around the corner in the united states of america. this is "bloomberg surveillance ." ♪

>> we are still in the greatest economic shock in over 50 years. >> there will be job losses in some sectors, but job gains and others. >> i think we are going to be stunned by the degree of earnings upgrades. >> the numbers this year don't tell us as much as we need to know about the future. >> the fed has been flattening the curve when history says that we want a steeper curve. >> one thing i think almost everyone missed is that an economy adapts. >> the market will hear what it wants to hear, and right now this market wants to go higher. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: