Economic front. P equities, that is a lie, calculated it. He said after 10 different quarters of gains in the s p was always followed up another 5 to 10 gain in the next quarter. Having off the strong secondquarter boats well is well. R bodes positive quarters could still lie ahead. Romaine referring to pd, one of the many people behind the scenes who keeps this program looking smart and feeling smart. Eaton vance codirector still with us. Thank you for being patient. Talk to me about volatility. We have seen the vix come down from the highs. It is not back down to precovid19 levels, but definitely there is a lot of calm in markets i think would be an encouraging sign. Absolutely. We started the year only looked at the vix, someone called it we began as a teenager and it quickly began to be over 80 over a short time. We are looking at this 30 level, that is good because it bodes well for the sentiment and calmer markets and individual idiosyncratic stories. That being said, i think there is a ton of dispersant, of sion, the market is down 3 . The average stock is down 11 . The dispersion in returns is relevant. For those looking again to get back into the market, i think there are a lot of opportunities being selective where you are leaning in. Caroline when you talk about those looking to come back into the market, there has been plenty of discussion on how much cash can be put to work particularly from, dare i use the term, boomers. Not millennials, not retail investors, but people waiting to put their money to work. Do you see that . Tana it is interesting. Equities have gotten a bad rap for many years. But i will at the volatility of the returns, they are stellar. Over the past three and five years, like clockwork, the s p has returned over 10 per annum with volatility that has been somewhat normal. Wer the past year obviously have seen that spike. For those timing the market, it is a difficult thing to do. We all want to be tactical. It is easy to get out and you dont know when to get back in. Dollar cost averaging is a good methodology to seek exposure. I say when you look at the spreads between what has lagged and what has done well, growth has outperformed volume. For folks looking for a rotation just because something has outperformed by a significant margin, i would be leery of that. Thingsre a couple of that have to come into the forefront. That is legitimacy of the macroeconomic picture getting better. We are still in the murky environment. Growth is still in the lead for the reasons we have talked about which is there is not enough growth to go around. I would seek out that growth at a reasonable price. Paying of for growth but not up for growth but not too much. Learning opportunities. Great to have you. Do come back. Bell. S it for the closing what is what did you miss is up next. Why our next guest says tomorrows jobs report is like looking in the rearview muir. This is bloomberg. Caroline im caroline hyde. Taylor i am taylor riggs. Romaine i am romaine bostick. Caroline the nasdaq marching higher, almost up a percent. Offdow jones just lagging,. 3 . Postponedity reopening indoor downing indoor dining. Arizona cases surging. Pfizers hopes for Early Vaccine trial. Bracing for the jobs report, looking to take lower for the last month but provide a messy picture. Lisa cook from Michigan StateUniversity Joins us with her forecast. That and more coming up. We have got to get over to taylor to take us through how the vaccine stocks performed today. Taylor virus versus vaccine and it looks like vaccine was tilting the scale more in its favor as we battle the virus. Stocks we are watching, pfizer bio in tech promising early data for their vaccine trials. It might look like we have vaccine perhaps by january. Patients were able to produce antibodies and safer patients who received two doses of the vaccine. I want to bring in jennifer, the senior scholar at the Johns Hopkins center for health security. I know it is early days and data, but does does any of the vaccine headlines that are coming out start to give you hope . Hope we will do the science to enable a vaccine that will work. If we find one, how quickly will we be able to produce it at the scale we need to affect the epidemic we are dealing with . I am cautious and think we should not count as a vaccine by the end of the year. On a vaccine by the end of the year. Romaine not the Silver Bullet everyone expects. It is a madhouse on the streets with the bars and restaurants serving on the sidewalk. Data regardingf how people are moving around and interacting with each other and whether there are correlations we can draw from that data with regard to what we can expect and covid19 cases. Jennifer we are seeing some alarming trends. More than half of states are seeing an uptick in cases and that is heading in the wrong direction. We want to see case numbers stabilizing or decreasing. Tough heading into the late summer months and adding to the mix influenza in the fall. You have seen it in your own lives, the fatigue about complying with social distancing measures and people want to get out and about. Nothing has changed. The virus is still out there and we are susceptible to becoming sick and we could become severely ill. It is important we continue to maintain our distance from others and avoid places where we are likely to contract the virus. Outdoor spaces are thought to be safer. Outdoor dining is preferable to indoor bars. But people have to keep in mind the need to maintain physical space and to limit exposure as much as possible. What we have seen in a number of state is when they relax measures, and the businesses allow people to come back to interacting and socializing in these settings, we see a growth in cases. Now a number of states are having to close restaurants and bars once again which is unfortunate. Caroline i was talking to the ceo of dow earlier. He said there is a microcosm of a picture what happened globally speaking and they have not had a single case among the asian workforce. He put this down to the fact that there is a cultural focus where they where masks, they wear masks. Talking about the politicization of masks or no masks, but from a scientific point of view, is it helping . Jennifer it is important for us to recognize we have a role to play here and individual choices can have a big impact on the trajectory. If we choose to maintain distance and wearing a mask is one way to put distance between us and others and it could prevent us from expelling infectious droplets that could get onto others. If we take those measures, we would expect to see less transmission than we would otherwise. In respect to Asian Countries not only are masks, use practice and people are used to the feeling of wearing a mask and the idea of wearing a mask when one is sick is routine, that is important. But some countries are not so far away from another coronavirus epidemic like sars. Having seen the impact that a deadly coronavirus can have on society primes people to be haps more concerned about this virus in a way people who have not had to live through Something Like that and dont know someone personally who has gotten sick and is personalized, they might not take the virus as seriously as other people do. Romaine make your own cocktails, do whatever. In thise another spike country, are we prepared to handle it, the health care system, in a way that would be better than how it was handled prior . Jennifer unfortunately, looking at arizona and texas, there is warning signs that makes me worried we are heading back where we started. We have learned a little bit about the virus we did not know back in march, maybe tricks in terms of treating it, but there are too many people for the hospitals who handle, that will have deadly outcomes. We should very much take this seriously and try to avert the situation. I am interested in the having another lockdown and people hold power to that. Do our parts now to make sure the virus does not spiraled out of control like it did in the spring. Romaine the senior scholar at the Johns Hopkins center for security. Now a programming note. Join bloomberg for our broadcast of the boston fireworks. Salute to our heroes, it will carry on the orchestras fourth of july tradition but be from the comfort of your own homes. 8 00 p. M. Eastern time july 4 bloomberg television, Bloomberg Radio and bloomberg. Com. We will be back. What i said to the Associated Press was no comment. That is the same thing i will say today. We are embroiled in litigation over whether i complied with the requirements of the prepublication review process. I think i did. I did not write this book with intention of classified information. I dont think he wants to suppress the book because of foreign governments reading it. He doesnt want the American People to read it. Afghanistan and leases around the world, the current controversy, i could have written about in the book if i did not face these other difficulties. Susan rice, the second Obama National security advisor, writes today in the New York Times, that if she had information like that being reported in the papers, whether it was totally verified or not, she would have gone into the oval office to tell president obama. Without getting into what i knew or did not know, i agree with susan rice. That is what the National Security advisor should do. There are not two categories of intelligence, verified over here and not over there. Intelligence invariably is placed along a spectrum and the community understands this. They have high confidence in some, medium confidence, low confidence. People will have to judge and different agencies will disagree. There is not a block of granite to show to the president that is verified intelligence. There is a range. You deal with uncertainty. That is part of the job. Ricei looked at the susan essay and the one by the on pennetta. I found them extraordinary in their heat. How do you recommend President Trump extricate himself from this now in particular how he addresses the military at the pentagon . I cant advise how to get out of a mess he has created. He has told three different stories whether he was briefed, whether he was told it was fake, whether it is fake news by the New York Times, a whole range of things. His advisors are contradicting themselves. It is another day at the office. Every day is a new day, every story is a new story. Yesterday was interesting but not dictating what you say today. What it tells the russians are is that we are in disarray this kind of provocation not just in afghanistan but other places around the world. On this intelligence, is there anything like why this would be put in the briefing not followed up in person with the president himself . I dont want to comment on the specific story and its intelligence implications for the reason i said a minute ago. But donald trump does not consume intelligence the way you would expect a president to do so. Everybody is entitled to gather information in their own personal style. Ronald reagan had his style. George hw bush had his. I am not saying one is wrong. The presentation to the president has to take that into account. So does the president read lengthy briefing papers, does he get it by movies and that sort of thing the question from donald four donald trump is whether he gets it at all. I think he is uninterested in learning. Facts that are on convenient for him dont stick, despite repeated tellings. So can he say he was never briefed on it or he thinks it is fake and get away with it . We will see. Maybe he will. National former u. S. Security advisor john bolton. We will talk about how the pandemic has expanded the push towards digital existence, as people try to become more efficient while working from home. Mercedes with a new deal with ibm to push to the ibm public cloud. How much faster is Cloud Adoption the coming . Becoming . Wonderful to have you with us, howard. Who tookfrom the man the reins at ibm, talking about how Everybody Needs to understand ibms forces of competitive advantage. How does the daimler deal make evidence of your advantage . The point around the acceleration because of covid we are seeing more Companies Come to us to digitize their business processes. From the cloud perspective, companies were moving applications to experiment what the cloud was. That did not give any real benefit. In the case of mercedes, we have helped them accelerate to the market but also improvise the security needs on the platforms. That is a thing ibm can do unlike any other Cloud Service product. We are seeing a wealth of vendor other industries coming to us to improve their experience. It is recognition it is important to have a good experience for your customers of of every thing else, even more than policy in the marketplace. Tos is allowing us differentiate ourselves. Caroline you want to be the means to connect different providers. You have come to the realization that not one company whether through acquisitions or previous relationships wont have one out one cloud provider, perhaps up to 10. You want to be the interaction between all of that. How are you setting your store having been in his this for two months . In business for two months . Important fort is any company to do that. It is important for any cloud provider to be knowledgeable that you are one amongst others. The information you have will be relevant for different business prices processes. We have something we acquired last year that is developed by an open Source Community of developers to help customers get that security to recognize customers want to buy from multiple cloud providers and we set out to operate in that. Caroline how are you ensuring that red hat under your leadership keeps its nimbleness, entrepreneurship and innovation . It is your and by different developers. We keep it as a separate entity entity tourther preserve that. We also ensure we have Cloud Service providers. We dont see the other csbs as competition but partners. Perhaps a Silver Lining to what is a huge cloud of the pandemic, one you have had to navigate, joining two months ago but not able to sit in the room with your colleagues. Talk about how this pandemic is driving the thirst for efficiency. Are you seeing a pickup in demand or acceleration . Yes, with the equity prices and share prices for companies, or the ability to interact in a seamless fashion, they are driving the situation. Companies that have got more the analog style, they need to think about how they complement that and improving business processes. Looking at those business processes and making them cloud native so we can improve the experience. Caroline it is a sad fact that Many Companies are having to slim down, look at their cost base, laying off. I know this is something ibm has had to navigate. Is this something your department cloud is able to avoid . The amount of demand we are having means we get more specialist engineers, people to be in the functions. This is an area where we are not as effective as the broader industry. Caroline as you look towards the Growth Potential in the u. S. And the world, you are talking about how you are able to reach across many time zones in the world in which we now live and the zoom calls. What do you think globally in terms of pickup . How do you experience and hope for the rebound . Moving erience is whereas it would take years. The compliance is very real. People understand this is a business imperative to be digital, therefore it is getting the counterbalance between the two. That speaks strongly to the assets we have at ibm because we understand the missioncritical workloads that are secure, the digital is perfected is protected. Caroline great to have some time with you. Two months into the job as ibm senior vice president. From new york, this is bloomberg. Romaine welcome back. Jobs friday going to be jobs thursday because of the fourth of july observance in the u. S. There will be a lot to unpack tomorrow morning. Lisa cook is a Department Professor professor in the department of economics at Michigan State university. She also served with president obama. Thank you for being here. Lets talk about the Broad Strokes we will get. The economists we have surveyed at bloomberg are expecting the monthly jobs data and the weekly unemployment data claims number to show more improvement, keeping up with the trent we have seen the past trend we have seen the past couple of weeks and months. I am curious what you think with longerterm trends and the reinstitution of jobs we have lost, if it is on a clear upward trajectory. Lisa thank you for having me. Thinking is along the lines of most economists. That there will be more jobs. There is a question of how many more jobs and this report will the report onrom july because we will not have seen the stop and start of reopening. I think it bodes well for the number of jobs being created. I think the Unemployment Rate should be lower. That would be still historically high. I dont know how that is going to go and how much more information we will have about the classification issue at the bureau of labor statistics. I think that is the problem they are working on. If there is an improvement in the quality of data, we will see a drop in any case. Caroline this classification has thrown off many economists, a huge beat as many economists got the numbers entirely wrong. What we did see was real to virgins between what is happening in terms of ethnicity we are seeing the numbers improved for hispanics and whites, but africanamerican numbers ticked higher. It was not improving. Are you expecting some rectification in this month . Romaine i am not lisa i am not sure. It improved for black men but not black women. Because they are on the front lines of many of these jobs, they have caregiving responsibilities, there are jobs that require caregiving responsibilities and those have not returned and it is questionable whether some of these jobs will ever return. I think that may be sticky. There is another problem black women face and that is systemic racism. They are typically the last hired and the first fired. I think we might not see the kind of pickup for them we have seen for other women. This includes, or rather this could be extended to Hispanic Women as well. I think black women are in particular subject to labor market discrimination and concentration in these sectors that are hard hit by covid19. What can we expect with wage growth and further discrepancies if we see in the wage gap . I think that is a good question. I think that one will be hard just because we have not seen inflation and real wage growth has been largely flat. I am not sure what we are going to say. There is a lot of uncertainty and a lot of reluctance by firms to change wages now because they are uncertain. And they are, there is not a labor market shortage. There is not a clear path for them in my view. I dont know what to make in this environment. Romaine that has to be somewhat of a concern. Jay powell was asked about the , the globalession financial crisis and how slowly the jobs recovery was and more importantly how slow the wage recovery was. He pointed to the idea of the 27 weeks Unemployment Rate, the idea that you had so many people out of work for so long you had the skills erosion. He is fearful we could see that happen again where we have this elevated and persistent level of unemployment that gets so long, it ends up becoming too difficult to get people reemployed. Lisa i think that is a real concern. The only bit of hope i have in that regard is that people who might be out of a job or working less than they would like to might be enhancing their skills as well. I know that there are a lot of people at home and busy with a lot of other things including childcare, but there are others with not much to do. If they decide to go back to school and to do an online course, i think that that would improve the overall labor market situation if we have a higher Skilled Labor force at the end. We had the same at the end of the great depression. Caroline now first word news. Mark arizona is seeing its run a virus numbers surging. State Health Officials reported 4800 new cases today. 88 people died, also a one day record. The governor announced the state will institute a month long halt on bars, gyms, movie theaters and water parks. Mike pompeo says chinas moves to exert more control over hong kong have eviscerated the rule of law in the city. He spoke at a state department briefing. Was one of theng most prosperous cities. Now we have another communist run city where people are subject to the party elites whims. Mark his comments come after Hong Kong Police began making their first arrests under sweeping National Security legislation that has curtailed dissent in the city less than 24 hours after chinese lawmakers handed it down. President trump is criticizing new york city mayor bill de blasios plans to allow a black lives matter mural to be painted outside trump tower. The president called it a symbol of hate that would antagonize police and would be denigrating this luxury avenue. He said spend the money fighting crime instead. Seattle police entered the Occupied Zone and used bicycles to remove the protesters after the mayor ordered the area cleared following two fatal shootings in less than two weeks. The capitol hill occupied protest zone set up near downtown following the protests of george floyd. People have been arrested for failure to disperse, obstruction and unlawful weapons possession. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Taylor joining me now is joe perry. I am abigail doolittle. We are starting our smart charts technical segments. It has been a longtime since we have had an opportunity to chat. We have this raging move higher. Right now the s p 500 stock in consolidation. Before we get a chart which is amazing, what are you thinking about overall . You have a good perspective as a traitor. Trader. We raced up and pulled back. It looks like a correction but we will move higher overall. It depends on how the summer goes, if the coronavirus comes back in full force, people look subhe election and the pricing, we are muchollar is pretty correlated with stocks overall as well. We are going to see a lot of currencies moving with stocks as well. If you are long the euro, you gold i thinkks is going to slowly move higher as we go through. Reallydollar charge is interesting. What chart is really entering dollar chart is really interesting. Your s p 500 chart, the reason this amazes me so much, we used this chart two years ago and we are stuck in the same phase. Joe it is amazing we had the a. B. , cb corrections. Now we had a nice trade off this low and i thought we would be going for another one, but we corrected sideways in triangle like formation. Here we are trading inside a triangle. That is one area we are holding right there. Within that is a trend line that comes back from september 2018. One there is a lot of fighting right here between the bulls and the bears. It will result to the upside. Down righte rsi there does not bother you . Joe yes, it is interesting. Look at where we ran into resistance in the channel. We hit it and then we pulled back. The rsi was able to pull back into the neutral area. That makes me more optimistic we will go higher because we had the correction into this territory. Abigail lets take a look at your chart. I have 25 seconds for you on this one. Joe gold, it is breaking out of this pendant formation ever so slowly. If you look at the beginning of june, there was a higher negative correlations and there is right now. That says gold may be moving higher the matter what stocks. Stocks go up higher to 3200. It goes up to 34, i think overall in the longer term this is going to rally and this pendant points to 2050 or so. Abigail thank you for joining us. This is bloomberg. This is not like aftermath of the financial grade with a wounded economy. Our economy has gotten over its skis before the crisis. It took years to get out of it and we needed a lot of stimulus along the way. I dont think that is happening. Dont think the economy as of february was fundamentally unbalanced. If the virus were under control i think we could, i think there are a lot of good reasons we could have a fast recovery and would not need much in the way of policy. But that appears to be where we are right now is back in the situation we were in in march, april, the economy that of the coma because covid virus. They go with policies to make that situation tolerable, to avoid having the depression spread any further than it has to and partially locked down economy livable which means we need to continue a lot of the programs that we put in place in march. And the concern is of course a lot of that stuff is going to expire in a few weeks. Joe are you surprised by the effectiveness of the programs . We have seen Household Incomes up between april and may relative to their march levels despite the collapse in unemployment . You cant look too much at the start market but it looks like demand is a recently buoyant reasonably buoyant. Have you been surprised by the effectiveness of what they passed . Yeah. I was surprised first of all. The cares act was highly imperfect but by u. S. Standards, the standards of how we dealt with previous downturns, it was good. Benefits were a huge lifeline. Perhaps most of the unemployed ended up with more income which intern contained the spillover. We shut down part of the economy in one of the concerns was shutting it down would, by depleting peoples incomes, lead to a second round of but we provided so much aid, that did not happen. I have to say the paycheck protection appears to have been a lot less affected than it should have been and other parts, the Large Business funding did not happen. It is a mixed picture. Compared to watching what you might have expected, we did well. Worry if the simple virus containment phase is prolonged, we will get the secondary round of layoffs, Companies Looking at their general structure and saying this is not going to make sense in a time in which actual Business Activity is so diminished . There is some of that. And before that, the unemployment, the extra Unemployment Benefits expire at the end of this month but actually for most workers will be cut off on the 25th because of the way the program works. Paycheck protection is pretty much local. Nd we had new york city has huge cuts in spending. Sustained local government, that will affect the economy in a major way. I think we are looking at even before the question of , sustainingeciding what they are doing but there is a real collapse in demand next month unless we have major legislation which does not appear to be in the pipeline now. Joe one of the thoughts with legislation in terms of the next phase of the stimulus but also an increasingly loud an idea that is getting more attention particularly on the left side of the spectrum is automatic stabilizers. Why do we need to have a big vote every time there is a downturn as opposed to just something automatic . Do you think that is something that should be a part of our policy first policy arsenal always . Yes. We always had a little bit of that in Unemployment Benefits. There were some aspects of the federal Unemployment Insurance program were tied to the state of the economy but not nearly enough. What we have learned, something the past dozen years, the u. S. Does fiscal policy in response to events badly. Everything gets caught up in partisan gridlock and becomes a huge mess. Automatic stabilizers work pretty well and if we can agree in advance, if we can put into law in advance these are the things, Unemployment Benefits will expand, state and local government aid should be on automatic stabilizer as well, yes. It means the next time we hit something bad, we will do less are doing and more dealing with it. Joe do you think it is possible governments around the world, like germany, which is taking arguably a more aggressive view of fiscal policy that it has in the past, the role it can play in recovery, the robust fiscal policy could become a more permanent feature of economic landscape, relying less on Monetary Policy for recovery . Yes. I think what we have seen, the story is the dog that did not bark. We have a huge expansion of deficit spending by everybody. , the bond markets have not shown any sign of concern and the political system has been unconcerned. All of the people who were screaming about deficits and debt in 2010 are quiet now because the need is so obvious and the willingness of the markets to accept this is obvious. I think we have turned a corner on that. Germany is an interesting case because germany is fiscally, they have a history of being extremely spendthrift on deficits. But they also have a lot of social solidarity. Confronted with a unitarian emergency, the germans are like ok. The sky has not fallen. That is an important sign. In some ways europe is learning a bigger lesson that we are, although i think we are. Krugman, nobel laureate. A columnist with the New York Times and the author of arguing with zombie, the fight for a better future, a catalog of many columns. For now lets bring in the best dressed person in the interview, joe weisenthal, joining us from texas. This looks like a good conversation. Is there anything he told you that was sitting within the general worldview that deficits dont matter in this current environment given how fierce this crisis was . Idea thatutely, the the spending we saw in the cares act at the end of march made a big difference. I dont think we can stress this point enough. So many people talk about the fed as being the primary hoover in the market, but the 2 trillion they got out the door and here was a bill and paul said during the interview, not a fan of trump or the Republican Senate but it was an impressive bill. Given the cares act provisions are going to expire, it is a big deal for the economy, for markets to do to watch what they do to replace them. Caroline a really big deal as we see states having to backtrack the opening process. Texas topping 8000 in new cases. Your perception on what we will get out of the data tomorrow and how much that is backward looking and we are looking at data confronting us like texas virus cases today. Joe it is backward looking but the key thing i am looking for is the number of permanently unemployed. People whose layoffs are considered to be a permanent as opposed to temporary. Last month the number of unemployment went down but the number of people characterized as permanent went up. You think it is backwards but during a month in which the recovery or the opening was seen as doing fairly well, it will be interesting to see what the permanent number is. The last few weeks have suggested the opening is not going as well, the further not further raises that further raises the risk. That will be the first number i look for tomorrow. Weisenthal, thank you. Stay tuned , Bloomberg Technology is up next. Romaine this is bloomberg. Emily welcome to Bloomberg Technology. I am emily chang in san francisco. Facebook shares rising despite this being july 1, the First Official day of a massive advertiser boycott. More than 400 brands have pulled ad dollars from facebook in protest of how the network is handling are not handling