Second half of 2020, there is an overlay of other stories. The pandemic story, at least in the United States, is truly front and center. I would also note the stunning close to equity markets yesterday. Call it window dressing on june 30, 2020, but we begin this july strong in the markets. Francine we certainly do. If you look at what the markets are looking at, and a lot of the focus is on the number of infections, treasuries slipping, and i am looking at a couple of Technical Glitches in europe affecting trading. We will have a full market roundup, but lets get to first word news in new york city with ritika gupta. Ritika good morning. Infectious diseases chief Anthony Fauci warns the u. S. Is going in the wrong direction. He said the country could see 100,000 new coronavirus cases a day, up from the current level of 40,000. Several southern and western states are seeing increases in infections, prompting some to put reopening plans on hold. A new poll shows 10 lead, joe biden over president trump. 90 of americans are dissatisfied with the state of the country. The president s Approval Rating fell to 39 , while 59 approved. A swift recovery for the economy may be sinking. Measures of sales, orders, and cash flow are at a 31year low. Demand for manufacturing goods also dropped in the second quarter. Harvey weinstein has reached a settlement. With more than half a dozen women who said he has assaulted or mistreated them. A federal judge has been asked to approve in 18. 9 Million Dollar deal. 23year sentence for sex crimes in upstate new york. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in ire than 120 countries, ritika gupta. This is bloomberg. Francine . Tom . Tom futures here fractional. Futures negative three, dow futures 29. You see the vix of 32 coming in nicely off the close yesterday, 30. 48 to begin the second half. The bond market not showing much , fractionally higher yields. I emphasize gold, breaching through 1800. All of the charts are interesting, some of them through the 2011 highs, depending on how you look at it, some buttressed up against the 2011 peaks. Gold surging. Francine gold is pretty significant. Just to remind everyone, volume in europe well below average with a Technical Glitch affecting some trading in the region. European stocks overall are pretty muted. It is the start to the third quarter, trading, investors mixed. With the fresh warnings about the spread of coronavirus. Lets start with the latest from hong kong. Police have made their first arrest under the new security law, 24 hours after chinese lawmakers handed it down. Hong kong is working 23 years today since the british handover, usually marked by mass protests against beijing. Joining us now, where some of underway are there was a lot of speculation about the interpretation of the law. With the first two arrests, are we closer to understanding how police on the ground will take this new law . Passed,e bill that was six chapters and 66 articles for offenses were outlined, terrorism and collusion with Foreign Forces the penalty for the most severe cases his life imprisonment. There was a concern about the Death Penalty being that has not been applied here. There still uncertainty about the scope of the bill, exactly who may fall afoul of the legislation as an extraterritorial element that is raising concerns about the potential risk not only to hong kong residents but to those who reside abroad. Bill, enforcement, mainland agencies will be setting up specific units to allow for that enforcement come and today we have seen several arrests made. So far according to the police, over 70 arrests have been made related to illegal assembly. Only two so far have been made specifically linked to the National Security bill. Tom good morning. How have the different parts of Hong Kong Society voiced their anger over this legislation . Politestand to be not about it, a bunch of kids protesting, obviously they are upset. What are the financial elites doing . What are global wall street doing and hong kong from central down to Fortress Hill . It is really surreal, the reaction we have seen on the ground here because protesters have learned their lesson over the last years. We are not seeing the storming of the Council Chamber is that we saw in 2019. When it comes to the leadership, the circle of elites, as you put it, there is a sense of what is the gray area, the redline that they need to understand so that they do not fall on the wrong side of the law. There is a question whether or businessman has said very clear for him that as long as you do not commit offenses under those four categories, then you are able to conduct business conduct your as usual in hong kong. Tom very nicely phrased. I want to point out that are huge bloomberg platform is trying to give us balanced reporting, if you will, and all of this particularly as people are just beginning to read the 35page document. Sophie, how does business go on on a wednesday into thursday, and do you anticipate traditional we can protests . Sophie until there is some kind of response that perhaps might quell some of the anger of protesters, we likely will see momentum. There has been up to this point a quieting down of activity because of the pandemic, because of concerns around the virus. Aer recent weeks we have seen loosening of containment measures. People are allowed to gather in groups of up to 50. That is an extended that has been extended until july 16. There still is this desire by the government, by officials, by police to ensure that the rule of law and stability is what they are espousing. But for people who believe there is a concern around freedom, you can expect that this kind of activity will continue to take place. Francine what does it mean for companies . What does it mean for business . To the again, going back question of what is the redline, there is a concern whether businesses need to voice out their stance politically. We had the barclays chief saying he would not get involved in politics, and the message would seem to be stay out of politics. Investors that bloomberg has spoken to say that in the longer run they still see a gateway to the mainland. There is still the case for capital flows, and excuse me, there is a lot going on behind me right now with people here on the street and the police. And a lot of tension on the ground. It will not necessarily be business as usual for foreign this we can, you can only anticipate that there will be momentum continuing. Thankophie kamaruddin, you so much, from hong kong this money. We have much more to talk about, including the reset for the markets this year i should say for the second half. Am pleasedt 8 30, i to tell you that with Jonathan Ferro and Lisa Abramowicz john bolton. We will speak to ambassador bolton about the uproar over and the plan to kill marines in afghanistan. , at 8 30. N this is bloomberg. Good morning. Ritika this is bloomberg surveillance. Lets get the Bloomberg Business flash. Its biggest legal threat it has to do with allegations of bribery involving the a deal with u. S. Prosecutors could result in a guilty plea for the first time in goldmans history. Watching extensive restructuring, airbus plans to cut 15,000 jobs. Airbus is downsizing because demand for jets plunged during the pandemic. Better than expected earnings for the last quarter, the Company Fedex launched an efficiency drive aimed at home deliveries. That is the Bloomberg Business flash. Francine . Tom . Tom thanks so much. Equities, bonds, currencies, commodities. Futures a little light after the big move yesterday, some of that off federal express. Gina martin adams of Bloomberg Intelligence dealing this idea of potential earnings surprises. Gold elevated at 1800 per ounce. Francine . Francine european stocks are edging up. We had a muted start to thirdquarter trading, investors trying to figure out the Economic Data out of europe, and fresh warnings about the spread of the coronavirus. You mentioned gold. I also wanted to mention gold. 1787. I think some of the Technical Glitches that affected trading in the region are on their way to being resolved. Oil also rising after three decades, following a report of the first drop of u. S. Stockpiles in may. Coming up on bloomberg radio, former honeywell chief executive. This is bloomberg. Francine this is bloomberg surveillance. We were looking at the markets and we had some mixed data out of europe and we were looking at what the ecb could do next. Joining us to talk about this, investment, a chief strategist. Every time we have you on, we took about italian btp, german bunds, and the like. Do you see any value in these bonds right now . David yes, i do. I think the periphery has got further to rally. I quite like btps at this point in time. I do think that it is not just about the ecb actions but it is e. U. In terms of the recovery fund. That has not yet been finalized and agreed, so that is something to watch very closely. Meaninghink value is a i think that is a meaningful step that would reduce the risk around the project, and that is good for peripheral bonds, and italy is one of the main beneficiaries of that. Francine if you look at italy, they also have a huge financing project that should see the light of day. How can you be sure that they are spending money where it is needed and not wasted . That well, i do think there is going to be a lot of thes on trying to support recovery not only in italy but in other countries, and i think that is the challenge that will face many governments around the world, which is how to provide ongoing fiscal support with the publicted buildup in debt associated with that, paying off longerterm regards to infrastructure, for retraining of workers as they in some of those centers that will be less viable in the post covid world. That is the challenge that will be facing the italian government, but i dont think that is unique to italy or to other countries within europe. I think every government will be facing that challenge. In david riley, tom keene new york. Good morning. I really loved your essay. I thought it was externally thoughtful and hit the crosscurrents as well. What i loved in your essay is the idea that you need to get to the end of july. Do i set up a framework now for the second half, or do i really need to wait until the end of july . Toid i think one does need essentially what youre having to wait for at the moment i think is together more of thee about the path recovery, and also the fiscal policy response. In particular, course, the key is at the end of july, we have the expiring of a number of measures under the fiscal package passed by congress, the cares act. That will create a bit of a impact on i think washington has done a very good job in response to this crisis, but it now needs to start shifting from what can we do to support businesses and households during the lockdowns in the height of the pandemic, and what can we now do to support the recovery and make it sustainable going forward. Tom that is all great, but i saw the portugal piece today, and i believe it was way oversubscribed. Ritika gupta mentioned fedex doing better than good. There is a stress here to get out front of 2021. How do you affect investment if you need to get out in front of the good news of 2021 . Well, i think that speaks to it still makes sense to have a prorisk buyer across portfolios. Extrapolating from the Economic Data that we have been getting after the lockdowns in march and april time, and extrapolating that into a safe recovery. We might get a decent recovery, i just dont think the Economic Data we are getting at the moment is really telling us very much about how the economy is going to evolve into the latter part of this year and into next year. I also do think that there is still some complacency around the risks that the virus has been posing, and clearly the pickup in cases across a large number now of u. S. States. I think that is going to start weighing on the recovery in the u. S. As well. Have it makes sense a prorisk buyer, particularly in areas where you have backstops from Central Banks, where you have got relatively strong fundamentals. If you want to take on more risk, i still prefer to start of to sort of move off the Capital Structures in move on to the risky sectors and Asset Classes and track it as it comes through, and in particular the labor market data. That will be key to the health of the market, what will distinguish this being a long, ultimately slow, mediocre recovery, or being the much touted vshape. We have weekly claims coming out later this week. Francine what is priced in the markets right now . Is it a vshaped recovery because of recent data . David i think it is closer to a vshaped recovery than a long haul. I think one has to be a little bit careful because i know there , aa lot of talk around this huge disconnect between andation and fundamentals, those people then point to the s p 500. If you look across a broader range of assets you look at european equities, that is still significantly down off a year to date basis. If you look at small and mediumsized cap, high yield spreads are still relatively elevated. And i think emerging markets as well are still pricing in a very weak growth outlook. Some different things, but the point about the Economic Data, and toms point about how you can way, the Economic Data has been strong and is consistent with a vshaped recovery, but it is also consistent with a bounce after an incredibly deep contraction. We are just not going to know for two or three months, whether we are on that sort of sustainable vshaped path, or whether we are going to hit, as jay powell has indicated if this is going to be a longhaul with a lot of scarring, with the ,verhang of higher unemployment if that is going to moderate the recovery into the second half of the year. So david riley, thank you much for joining us this morning. We will continue. Weve got a lot going on this morning. With30, my conversation john bolton. After that, in the 4 00 hour, the laureate paul krugman. As well as our team in hong kong, monitoring this historic day. A change in the laws of hong kong. This is bloomberg. Good morning. W . W . Uhiono hypothetically, a second outbreak could force governments and force people to withdraw again from economic activity. I think the worst part would be to undermine public confidence. There appears to be bipartisan support to extend the ppe to businesses that are most hardhit. We will be watching as regular main street fully comes online and continuing to look to see whether there are ways we can improve it. When you support additional legislation and look forward to working with both the house and senate so that we can pass legislation by the in of july . Really interesting testimony yesterday. A light moment as nugent and powell putting elbows together. Clickingnd powell elbows together. Francine and i do that. The whole mask thing has become part of normal testimony in washington. What is really important is the discussion over further fiscal action with some real intrigue last time. It get into the minutia of it is some real intrigue about getting these funds deployed across america. David riley with this with bluebay Madison Asset management. Fiscal efforts in the United Kingdom as well. For your investment world left upcountry the country and putting the money to work on a physical basis . Physical basis . Strongly influenced by where fiscalhink there is the space and willingness to support the recovery with additional fiscal support. U. K. Government that you referred to, tom, the Prime Minister talked about build, build, build and then he said 5 billion pounds. I was a bit confused by that step that is not really a rounding error. But i am expecting that said, additionallarge fiscal stimulus to come from the u. K. Very importantly clearly both in the United States and another fiscal package as well. Whacks economic, we dont do that on the first at the third quarter, but the ambiguity is a better economy on fiscal stimulus versus a threat of higher interest rates. Are you investing just assuming price down, yield higher . I dont think we face that tradeoff right now. I do think that Central Banks are basically effectively capping bonds yield. I dont think theyre going to allow a meaningful increase in yields, including at the longer end. Thatpretty confident yields will remain contained even as governments are borrowing very heavily. That is the current environment that we are facing. I think the market in some aspects, reward those countries where policymakers are putting the foot to the pedal. One of the lessons we learned after the Global Financial crisis is that policymakers switched to austerity too early and too aggressively. I am hopeful that we wont make that same mistake this time around. Would be david, what your priorities if you were in charge . Be topriority would continue to provide support to business and household incomes, but i would also be directing spending in order to support and facilitate some of the restructuring that is going to have to take place. Workers,ning of employment support, support for those who become unemployed as well, and hopefully, get them back into the labor market as soon as possible. I think in the u. S. Context, it just makes sense to extend the Unemployment Insurance benefit program, the cares act, but it also makes sense to perhaps we choose the relative generosity of that particular program as you get some reopening and opportunities for rehiring in the u. S. Labor market. The thing that worries me at the moment is obviously this sort of initial balance and recovery we have seen has also been accompanied by some renewed outbreaks in terms of the virus. And the virus is not in the back view mirror. I think too many investors think that it is. Francine if there is a second log, does that mean we get a wshaped recovery or does it put in question or cover altogether . If we were to go to back stringent lockdown as we had in wshaped march, april, i think would be a kind reference. We would be back into a severe recession and i think a much longer one and a much more damaging. I think the likelihood up that wepretty low, even where have seen, for example, in a number of u. S. States where infection rates have risen to a level that has prompted the governors to pause or roll back some of the reopening which they had in place. Nationwide, think a much more stringent lockup is less likely, greater,capacity is treatments are greater. What will be an issue is were not going to get a vaccine before the Northern Hemisphere goes back into winter. To your point, francine, you cannot completely discount a second wave toward the end of this year. As a result of that, some further timing and restrictions. Interesting, david riley. Thank you so much, with lupe asset management. We have much more to talk about. With first word news, here is ready. Predicate coat china has described its new Hong Kong Security law as a democrat is hanging over its most vocal critic most of the legislation allows the life sentences for crimes including subversion and collusion with Foreign Forces. Police have made their first two arrests under the law. One of them was a man with a hong kong independence flight. New york, new jersey, and connecticut have doubled their printing list to 16 states. Visitors from the states quarantine list to 16 states. Visitors from those states must isolate for 14 days. The number of positive coronavirus tests in new york continues to remain low. President trump Standing Firm in his defense and military bases with the names of confederate leaders. The president vows to veto the defense spending bill if it contains a provision that would set the names of the rebel leaders separate the names of the rebel leaders from the bases. In russia, Vladimir Putin on track for a big went on an exit pulse of 76 of voters of work of support. The mandate expires in 2024. His Approval Ratings have slumped. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Francine thank you so much. On a programming note, i know tom is excited about this, join bloomberg for an annual fireworksof the spectacular. This is called a boston pops salute to our heroes. Caring on the orchestras fourth of july concert starting at 8 00 p. M. Eastern from the comfort of your home. This is bloomberg. This is bloomberg surveillance. The u. S. Is going in the wrong direction when it comes to the coronavirus. That is the warning of Anthony Fauci. He told the u. S. Senate panel that new daily cases could more than double to 100,000 behaviors dont change. Is oksana pyzik. Thank you for joining us. When you look at some of the confirmed cases overall, is this still a respiratory disease . We are six months into the upright. How much do we understand about what this virus actually is . Over 10e now looking at million cases globally. What experts have found is this is a multisystem disease. There are longterm complications. The morbidity is a growing cause of concern. It has surprised us in many ways with lung scarring, heart damage, even neurological Mental Health effects. What is interesting is this has affected people who are actually quite healthy before contracting the virus. And those that have ended up in hospitals with the infection, what were seeing now of course we are still learning it looks as though 45 of covid19 patients in the u. K. Continue to require ongoing medical care post discharge. So this virus is too dangerous, too novel, so many unknowns that freelyot let it spread to populations unchecked. Francine is it something that we will have to learn to live with because coronavirus or covid19 will stay with us for a long time . Well, that is certainly possible. In thes, at least shortterm, we do have to learn how to coexist with the virus until a vaccine is developed. But that could be some time away and with no certainty. That is something we need to continue to reinforce these basic Public Health messages on how to break the chain of transmission, maintain good hygiene measures to protect our most Vulnerable People in our communities. , goodksana pyzik morning. Your focus is pharmacology, going to the drugstore and finding cures. I want you to talk about the allusions of a cureall vaccine, whether it is the end of this year or even out into next year. Going back to say tetracycline, erythromycin. T of this takes time. Are we going to have a vaccine that works quickly or will be an iteration of vaccine throughout the next two or three years . Over 140there are vaccines that are in development. And it may be that over time we use vaccines in different ways for different people. It really depends on what comes out of these clinical trials. Another issue as well is even after something that is safe and effective comes to the market again, there could be different iations for populations distribution will be another problem. If you look at lessons from the it was a virus 2009, real problem. Tom yeah, yeah. We have to leave it at that but this has been just because of time, but this has been very, very helpful. Thank you so much. Oksana pyzik this morning. Coming up, little bit of a look at the markets as we look at the broader picture. On goldro will join us to the moon. Gold, 1800. Gold, 2000. I cant afford it in any form. Old. We will do that next. This is bloomberg. This is bloomberg surveillance. Pushing back a plan to reopen its u. S. Offices. The reason . A search in coronavirus cases in several western and southern states. All google offices in the u. S. Will remain closed until september 7 at the latest. The company had planned to start bringing back some workers next week. Investor David Einhorns hedge fund fell 5 in june. The value stocks liked growth shares in the month suffer the year, this Green Knight Capital has lost almost 21 . The first time beyond meat is headed to supermarket shelves in china. The fate me maker will begin selling its client base burgers in shanghai this weekend. It will extend in september in the u. S. That is the Bloomberg Business flash. So much. K you greatly appreciated. Right now jay hambro with this. Were thrilled he could be with us today to speak with us on commodities, on the broader reach, microeconomics and how it folds into companies on commodities. Except there is one commodity that really matters right now, and it is not these are the main issues around the pandemic. Gold to the moon. Jay hambro, thank you for being with us. Just in a general statement, why is gold and a moonshot . I couldnt hear the question. Tom what is gold in a moonshot . Why is gold right now pretty much up, up, up . Oh, gold. Sorry, i did not hear the first part of the question. Why is gold so positive . I think there is a unique uation that on the gold have been praying for for many years where the heightened givesainty in the markets a point of reference that people need very solid new currency. Ultimatey have the value, which is gold, which i think the people of the high church of gold would say. Tom what is so interesting, folks, not the intrigue of the strategy of gold and that, but bringing it over into the finance of mining. This is where mr. Hamm pro is expert. With the surge in gold, you see a renaissance of not only goldmining but other metal mining as well . I think the world of mining is going to evolve. I think it will devolve to a position with edgy carbonized future. D carbonized future. Edople can do a decarboniz that that i money, than the future is exciting. Primaryes are commodities that people in the world each and every single government around the world at the moment is talking about growth. To do it in a responsible fashion. If they can do that growth in onized mining fashion, then the future money but strong. Francine in percentage terms, do you have any idea about how took a hit because of covid19 and how long before the industry recovers . I think youre right, aluminum was hardhit but i hope very much the speed of the negative decline will be matched by this speed in the uptick. The growth rate forecast for aboutin aluminum usage is 7 for 2020. From what i read, i think that will collapse down to a 1 . For the calendar year 2020. But i think for 2021, we should return to at least 7 in terms of what is needed. Fundamentals are still very strong. Asple still need aluminum cars are becoming more and more lightweight. People need aluminum to fuel that weight loss. You see that in all the markets were looking at, not just china. R pin market is desperate European Market is desperate for soft carbonized and aluminum product. Francine some of the Bear Sentiment in aluminum is because of the responsive seen during the pandemic. What kind of price would we need to see before gfg actually looks seriously at cutting production. We took it off about 15 dictated for any potential absenteeism from the effects of the pandemic. We have now restored it to 100 . Now at 100 . We didnt really get impacted by hadnteeism to the extent we prepared for. What we have seen is a decline in some of our customer demand for valueadded products. ,o looking at particular alloys particularly some of the stronger material used for auto and for beverage in, but this is a great market. Ofhad a decision with one the big auto manufacturers last week. Their range is short of aluminum. They put aluminum on the larger tos as they have moved those a greener future. But they would like the aluminum across the range. For the suvs, they have really aluminum body sheet on their key panels. Some of the smaller cars need to do the same. It is just on a slower trajectory. The reality is if the luminal price remains weak, you will see an uptick in demand for it because this is a product range evolution that has to happen. Tom jay hambro, thank you so much with gfg alliance. Greatly appreciated. More of a corporate and finance view of mining. We will take a much more strategic response. A lot of good guests coming up, including jeffrey curry with goldman sachs. Lways important here he has been dead on on the advance of gold as well. Dont forget later today, paul krugman. Look for that in the new york Late Afternoon leap in the 4 00 hour. At 8 30 new york time, my conversation with john bolton. We will directly address this news we have seen the last few ins of russian bounties afghanistan. Much wanted talk about. It is the first day of the second half of 2020. Program notes, jobs day tomorrow , thursday. This is bloomberg. I got an oriole here. Eh. Common bird. Ooh look over here something much better. There it is. Peacock, included with xfinity x1. Remarkable. Fascinating. Very. It streams tons of your favorite shows and movies, plus the latest in sports news and. Huh run the newest streaming app has landed on xfinity x1. Now thats. Simple. Easy. Awesome. Xfinity x1 just got even better with peacock premium included at no additional cost. No strings attached. Just say peacock into your voice remote to start watching today. Tom this morning, equities and gold. They surge. That could begin this second half of 2020. 30 off the bottom in the march stock market, gold up 10 per year. That over the last decade. , looking good in the Washington Nationals mask. Republicans this morning, they begged their president to get with the pandemic script. Later on this morning on russia, paying cash to kill american marines. It is a failure to communicate. John bolton on trump and politicians committing intelligence. Good morning, bloomberg surveillance. The most interesting day for Bloomberg Television and radio. Francine lacqua in london and i am tom keene in new york. Up,ok at the guests lined paul krugman later and investor bolton, Jeffrey Currie on gold and at the tenneco market