Folks theally shows weekend that we go into, it is midmay. I believe the calendar says its may 15. Part of that debate is the tension about june being upon us and even beginning to consider july. What i notice in my friday reading is that there is, including mr. Macron, there is this huge attention about this pandemic forward. Francine it certainly is and how you distribute all the medication. Lets get straight to the bloomberg first word news. Bless you, tom. Good morning, francine, tom. China denying it try to cover up details of the coronavirus outbreak. Beijing says it did not know until january 19 how infectious the new disease was. China says they release that information the next day. Chinese the federal government is out with new guidance on how to reopen bars, restaurants, and workplaces. Of cdc has outlined a number steps, among them, including social distancing, and how to tect coronavirus cases. Germany has ended a historic recession with its biggest month in over a decade slump in over a decade. Government spending and construction helped stabilize the economy somewhat. Oil is headed for its third weekly increase in a row. West texas intermediate futures closed about 27 per barrel for the first time in over a month. Major producers have been cutting supplies and consumption has been recovering after a historic collapse in demand. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am rich guy grouped her this is bloomberg. Tom thanks so much. I am going to say this 14 times today, folks. The way they calculate gdp in europe is way different from the way they do in the United States not better, not worse, just different. That german statistic is way grimmer by u. S. Standards and it appears. Its a quiet market but i focus on the disinflation and deflationary tendencies that are out there. 30 year bond coming in through the week is maybe one of the great indicators in the United States. Riyal has been weaker all week. Francine i am looking at pound. We keep having bank of england officials talking or not talking about negative rates. They dont want to rule anything out, but we are not there get. We have a couple of things we need to watch out for in terms of oil. With the virus is telling us is that european stocks, for example, are looking at the virus, the fact that a lot of economies are reopening. They worry about the second wave of coronavirus infections. They look at the simmering tension between american china. Treasuries drifting. For more on everything, we are joined by kit juckes, Societe Generale specialist. Is it going to be inflationary or should we not worry about it now . It may be five years down the road. We have a challenge there. Theink right now, devastation of the labor market devastationn the of our ability to produce things. The devastation on peoples incomes, savings, confidence in their futures is bigger than our inability. History, there werent any workers because they are died. This is the polar opposite. We are not going to be spending enough money because we know we have been what we have right now, certainly francine talk to me about the fed. Jerome powell does not like the idea of negative rates. If i had to guess, no. The u. S. Has a lot of options. There are still plenty of fiscal options. Rates are going to be really low for a really long time. The Financial Market inevitably prices in lower rates. At think the u. S. Can avoid it. I would say, nobody wants negative rates. Nobody goes into it thinking its a good idea. Its just what they do when they cant do anything else. More and more countries get that point. Tom the gdp numbers for germany obviously better than a lot of other people in europe. Math that math, the Alan Greenspan codified in number of decades ago, is about a 9 number. If germany has a fiscal surplus, are they basically their own Sovereign Wealth Fund where they can bail themselves out over a 9 gdp . What they can do is make sure that when you get past lockdown, in an optimistic world, when you , you cantually absolutely turbocharge your economic recovery because you have the means. Tom how do they do that . This is fascinating, fascinate. The distinction of germany as a wealthy nation. How do they turbocharge into the end of this year and into next year . Know, germany can, domestically with what they do, they will come in with a range of measures. What germany can do is do with new roads and bridges and improve the Public Transit system. Is that thereate is going to absolutely have to be as low as that transfers of money within the European Union. It is just critical. Spain, italy, and lots beyond need help. What kind of help are we talking about . Bailout help . Are we talking about some kind of Debt Forgiveness . System that allows fiscal transfers, maybe bailouts. If you turn around and say, we dont that dont want that neutralization and if you dont have any cash mutuals asian ization, and if you dont have any then we will end up with bailouts. In the end, you will get bailouts. O my mind, if we do nothing than stick to our principles in europe now, we will be bailing out eventually. And how does that help . The debate should be going on in the background about where you trend that path away from debt on and towards an understanding that we all share this little plot of land. Francine is the new normal that each country is in it for itself . How does that change every thing . I really hope thats not the case in europe. We sit on this Little Island in the u. K. There is nationalism between europe and the United States and china. Goont think europe can anywhere near the idea not trading itself as one economic, social economic bloc at this point. That is a big danger but it is a disaster. Tom part of this, this is a brilliant conversation, folks, on a friday. When the feds change fax change, europe facts change, europe will change. You are skeptical on the europe, particularly strong again. Is there a great surprise for germany that they will see adaptation in the value of the euro over the next two to five years . Get an probably will not enormous one. As long as germany and the netherlands are running really big current accounts. What it hasst done since 2015 is battled into a lower range than it was at any point in time before that. Germany quite likes that in a sense. It is really helping their economic engine in their current model. I think the challenge for germany in this new world is, what if world trade remains weaker for much longer . In that sense, europe has to be more focused inside europe as opposed to looking to export outside all the time. Questionsose are deep that the european leadership should be asking themselves when they can get away from trying to worry about shortterm prices. Tom kit juckes with us. Importantally an conversation, folks. Extraordinary to see the fragility of europe. Disinflation. He. We see also in the reactions to this virus. If you have seen the videos of venice and the empty canals of venice, this is without question of the headline of the day. I have got to go to you on this. Italy set to about Free Movement allow Free Movement within the country from june 3. Would you suggest that that is a resurrection of the taurus business . Are we distant tourist business . Are we distant from that moment . Francine not really, tom. This is domestic tourism, if you look at it. We put the u. K. In lockdown. Day. An exercise one hour a now, you can exercise and go outside without any limit. In italy, it is a little bit different, because you had regions in lockdown. You had red zones, oranges owns that were very risky. Region by region, there was a lockdown that you could not travel within the country, even if you could travel within your region. At just a further step in reopening the economy, tom. Tom we will see. Kit juckes will continue with us here. Important discussion on a friday to set up your readings or get to next week. We will do that today. Later on, Mohamed L Arian will join us. Stay with us. This is bloomberg. Tom bloomberg surveillance. Good morning, everyone. Still as we are from our homes. That has been most interesting for many weeks. Thank you for the many messages we have gotten. We are thrilled at the quality of the conversations we have been having with guests, overwhelmed by how the team has rally worldwide to give you the best in conversation. We do that right now with kid jukes of Societe Generale kit jukes of Societe Generale. On ai love your work here en. Ntetienne ascended y i was under struck at the lack of popularity of mr. Abe. Hugely unpopular in japan. You predict a strong yen. What does a strong yen mean for the stability of domestic japan . Challenge but they are starting from the perspective where the yen has gotten itself a very weak over the last few years by having no inflation. Mr. Abe has succeeded in that sense to maintain a low currency for a long time. What he has not succeeded in doing is reviving the kind of growth rate that would keep his popularity hig are coming out with his next trickh. Country,still, as a the biggest net holder of ,oreign assets in the world they have an increasing incentive not to put more money overseas and to bring more money home overtime. I cant see how they can keep their currency where it is in the long run. Tom i dont want you to give it decimal two points but gauge the trajectory of stronger yen. You can look at euroyen, sterling yen, etc. On dollar yen, give me that trajectory. Does it go below 100 . I think we will get to 100 and the next two months, not much below. It has been much below that in the last 20 years at. As times. At this point, we are coming against a really strong u. S. Dollar. As long as we are in crisis, as long as the dollar continues to be strong because of its position as the global reserve currency in the world, i think it will be a slow move down for dollaryen over time and a rather faster move time for other currencies against the yen in the shortterm. Francine what does u. S. China, you know, economic prowess look like in 23 years . Are we going to see another massive trade war . What does that do to supply countries. He two i hope not. The chinese will already be trying to rebound of their economy towards domestic demand. They have to do that. I think the u. S. Is going to try to, whatever happens, refocus to be left independent on things, have more things that they can get domestically. Global growth is driven by global trade growth and has been for as long as any of us have been conscious. So i hope that politicians are not stupid enough to get the two confused. I think that getting some goods made more at home is something that is just an inevitable result of the pandemic. Trading is good. We should not confuse ourselves about that. I hope the u. S. Government does not. Francine what does renminbis do in this kind of environment . At the moment, they go for stability, stability for the currency. , the last thing they want to do is start having it flying around and causing capital flight, capital flows that they have seen historically that the currency can be a source of instability. I am pretty sure it will not strengthen. It is a strong currency this year. They will be i dont think weakernt to use a currency as any kind of a policy tool. Stability is much more important for them right now. I think it is likely if it weakens, to we can modestly and over time and probably in a controlled fashion. Both sides are possibly just enough to not let that happen. Francine thank you very much. Coming up, our exclusive conversation with mohammed barkindo, the opec secretarygeneral. This is bloomberg. This is bloomberg surveillance. Spend Semi Conductor will 12 billion building a chip plant in arizona. It is a move designed to assuage u. S. Concerns about supply chain security. It is the largest and most advanced maker of chips for other companies such as apple. It plays a crucial role. Bad it is int how the airline industry. Cathay pacific at its low cost unit carried an average of just 460 passengers per day, a 99. 6 drop from last year. They are offering a skeleton passenger flight schedule to just. 14 cities the u. K. Is preparing to allow professional soccer matches to resume next month. That will allow the English Premier League to complete the season that was suspended in march. The governor signals that soccer clubs must make free televised matches much more widely available. That is your Bloomberg Business flash. Tom met me do a data check quickly. Invesco t living leaving invesco a number of months ago. Has data check today will be simple. We see yields continue to come in, including the 30 year bond in the u. S. Lower. Francine . Francine i am looking at oil. It is moving a little bit. Oil is back up after what we saw the last couple of weeks. We had the iea reports. Treasuries not moving much. If you look at these u. S. Futures, i guess they are looking at a second wave of infections and tensions between u. S. And china. Coming up next, tim graft, state meaeet head of e microstrategy. This is bloomberg. Tom good morning, everyone. Bloomberg surveillance. Mark barnett at invesco is out. Bloomberg reporting that. We look not at the single bet of the weekend which is simply buy america, largecap, amazon or apple, but there has got to be Something Else. Timothy graf is with state street and i knew him first with credit suisse. , where cut to the chase is the key opportunity 12 months out with in ema . Timothy we are looking at asia as the most obvious. They are the easy first in, first out virus story but more importantly it is about liking growth sectors in this low rate varmint for a long period environment for a low period of time. Exposuregive you that like china and taiwan . Have value and they are not particularly crowded, and they give you concentration in the tech sector. Tom this is an important distinction and in has been out there that it has been out there in europe and elsewhere, the tech sector in asia. If that is true and you have a strong or resilient dollar, how does that play in . Do you have to hedge a belief in asia to be successful one and two years out . Timothy a lot of that is dependence on the renminbi which we do not see that being decoupled from the fortunes of the dollar. It will vary more than it has, but it seems likely that that will maintain a fairly close relationship to the dollar, and gothe renminbi goes, so too the other currencies in the neighborhood. You may get a little bit of currency slippage and for economies like india where we say that is not the case, maybe there is reason to be cautious, is mostan, taipei, it likely going to be a renminbi tie that will help you. Francine when you look at the legacy of this crisis, what will it be . Antiglobalization, populism, Something Else . Timothy antiglobalization is probably a safe one and we are seeing this and work on inflation where supply chain resiliency is called into question and you are getting pockets of inflation due to supply chains that are crossborder and potentially in danger of raking down breaking down temporarily and may do so on a permanent basis if there is a shorting of activity. There will be loads of changes that take ways in terms of the way we work but in terms of how economies function, that will be a legacy of this. Francine what does that mean for where you want to put your money now . , i thinkstill for me those sectors where you will have a large degree of growth those geographies where you have a large degree of growth, even absent though supplychain concerns will be where you want to focus in equity markets. That brings us back to asia where even though there are supplychain issues, asia offers local growth to compensate for those issues. Tom an issue to segue back to europe, i am fascinated by Eastern Europe. It has been so quiet and somewhat politically active. His Eastern Europe an appropriate place is Eastern Europe an appropriate place to invest . Timothy i do not rule it out longerterm because eastern the exporticularly tendencies on western europe have room to improve. Western europe has done a good job of retaining resiliency in the labor market and maintaining workers wages so when you come back online you may not have the disruptions you expect in other regions. If,s a big and conditional but assuming that plays out over time, these Eastern European countries could farewell. Could fare well. It is not what we are looking at right now, though. Graf,ery good, timothy greatly appreciated. He is with state street. We have much more coming up on a friday, and i would suggest with the data turning and disinflation we see, a most interesting friday. With our first word news in new york city. Ritika nancy pelosi is going ahead with a vote today on a 3 trillion democratic only virus relief bill. The bell has no chance of getting signed into law but pelosi is generally counting on some of it generating public support. Backe powell has pushed against negative interest rate, and the bank of england and bank anan both echoed maire says bruno le they are at risk of disappearing. They are part of the car industry. Talks between the u. K. And European Union about their future relationship are stumbling towards the brink. There are few signs of progress being made. The u. K. Is seen as compromising in several areas. The e. U. Is calling for a trade deal. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Francine thank you so much. Up next, Jennifer Rohn, Principal Research fellow, we will talk about vaccinations and the virus. This is bloomberg. This is bloomberg surveillance, taman francine from london and new york. Tom and francine from london and new york. Italy will be able to move freely throughout its regions in june. U. S. States have issued official guidance on how to reopen bars, restaurants, and workplaces. Joining us is professor Jennifer Rohn. How many people do we know have had the virus . We talk about a second wave and we used to talk about herd immunity. How many people are immune . Jennifer there are new antibody tests that detect prior infection and the news is not great. Only one in 10 people have been exposed, leaving 90 people vulnerable. Francine what are the risks of a second wave . If you reopen the economy, and this is a balance between economists and scientists, but could it be as bad as it was early march or does it gradually come down if we social distance . Jennifer it is not a question of whether there will be a second wave. There will be one. If you have a robust Contact Tracing and quarantine testing and quarantine and Contact Tracing, if you have that nailed, you are in a good position but if you let people out without following them up, we could be back where we started. This is not really the end, this is the beginning. Tom it has been a most difficult week. Glimmers of good news out of germany. The Washington Post puts a chart on their cover every day and the charts in the United States over the last three days have not been good. The president of the United States in pennsylvania over the last 24 hours has announced that testing is maybe not that good, overrated. As a scientist with your work on andviruses cat viruses your work on how cells die, for people who do not know what you do and what you are focused on with this pandemic . Jennifer tracing and testing is absolutely crucial. This is no way we will get taken care of without it if you do not catch the ones that are infected and stop them from contacting others, we will be right where we started. In asia, they are doing great. The countries that are not doing great on it are not doing great. That is not a coincidence. Tom how do you respond to those with cell phone that say tracing is an impingement of rights . Jennifer you have to weigh this against the societal benefit of being able to contain this incredibly bad pandemic. People will die and the economy will keep tanking if we do not get it under control, so it is a balance between personal liberties and tracking the virus , but i think Everyone Wants to come out of this virus. Francine do we have medicine to treat it effectively if people become ill . Are we in a better place than six weeks ago . Jennifer we have remdesivir that has been approved for use. It is better than nothing and hopefully will relieve pressure on Health Care Systems but it is not magic. Dozens are coming through the pipeline but none are what we need for actual care or prevention. Francine how do you describe the u. K. Governments efforts to stem the virus so far . Jennifer i think they acted too late on the lockdown, and height site that hindsight is brilliant. Hindsight is brilliant. We are relaxing the lockdown and i am hoping the Contact Tracing apps will be effective but i do not think they are ready yet. Most people do not think they will be until next month, so we will have to watch and wait. Francine what should be watching for what should we be watching for, number of infections . The idea is reopening slowly whilst making sure there is not too much pressure on the Health Services so people on the front lines can stay safe but if you are sick and require access to a hospital bed you have one . Jennifer we have no herd immunity and no herd immunity will occur when we are at 50 . As long as people keep getting infected we will have that chance of death and we have to keep the curve flattened so we do not send everyone to the hospital at the same time. Tom how do you respond to the idea that we are supposed to become less socially distanced by wearing masks, often time cheap masks, and may be latex gloves . How does a pro like you respond to that protection . Jennifer the masks have been evolving. At first, everyone said they are rubbish, do not use them. Anything is better than nothing. Talking can aim it virus virusols emit particles and they can remain as long as 14 minutes. If you touch something, pick up virus and touch your face, game over. You have to train yourself not to touch her face afterwards. Your face afterwards. Tom what is your advice for Prime Minister johnson . Jennifer it is a beautiful weekend. We have had cold weather. People will be wanting to flock to beauty spots. Social distancing is still here despite the fact that we are allowed out and have to keep two meters of distance. We are nowhere near the end of this pandemic. Tom jennifer, thank you so much, professor Jennifer Rohn of Oberlin College in ohio. We will drive forward this conversation with dr. Andrew p ofause dr. Andrew pecosz Johns Hopkins in the next hour. This is bloomberg. This is bloomberg surveillance. The first three months of the year for apples most important partner. At disrupted the companys production and china and worldwide demand for smartphones. Softbank is headed for a record loss. The company is expected to post a 12. 5 billion operation loss for the year. The vision fund went on and 80 billion startup spree. Wework made the investment portfolio look increasingly shaky. Southwest airlines is looking for volunteers to lose their leave their jobs voluntarily weve their jobs. Offered toees have take time off or receive a partial pay plan. That is your Bloomberg Business flash. Francine Taiwan Semiconductor manufacturing is planning to spend 12 billion building a chip plant in arizona. It may assuage u. S. Concerns. Joining us to discuss this is a Bloomberg Opinion columnist covering economy with some fantastic stories, so i suggest you log on and read. Is this the First Company that will do this because of supply chain concerns, or will it be a oneoff . Tim i think there will be more. I do not think the others will be as big. 12 billion over nine years as a large of money and not as many not Many Companies are as large regarding capex. Not just supplies to apple but hp and dell and other companies will want to base themselves in the United States or be have or over the border in canada or mexico. Is a bigger deal for the u. S. Francine is this a Trump Administration win . Are they offering anything to these companies, or does it just make business sense because you can sell locally . Tim both. Donald trump has brought to the fore something that has been a big concern within National Security circles for years, concern that chinas technology will catch up to americas or that china can get their hands on American Technology. Tsmc is mostly based in taiwan but there is concern of having so much American Technology offshore outside the borders of the United States is something that is a weak spot in americas National Security offensive. The real big wean here win here is yes, the Trump Administration, but for the National Security council nsa, dod, all of those bureaucrats who have been concerned about this predating donald trump. Tom well said. You are truly the expert on the taiwan watch. Fold in this announcement and as you say, the Security Apparatus in america with the tension between taiwan and mainland china. We have seen this recently with taiwan being excluded from the World Health Organization i china by china. Fold in the construction of a factory in the southwest of america with the arch taiwan chinese debate. Tim that question is now on their heads. Years ago, tsmc was contemplating do they want to go to america . Not really. China is the future but america is the biggest customer. Do you go with the new guy that is growing or the current one that is your client . That is taiwan in a nutshell. They export a lot to china but a lot gets reexported back to america, so taiwan and the nation have been struggling with this question for a long time, so this shows taiwan is moving more to the american side which will build up more tension with china. Tom twoyear layout of how we affect business, it goes to the great and late Clay Christiansen and Creative Destruction. Is taiwan setting up its own Creative Destruction by attaching to the Trump Administration desires . Tim i would say since taiwan is grabbing onto what the Trump Administration is doing, that taiwan has been wanting to move in that direction almost two decades, beyond denning away from china and trying not getting away from china and trying not to lean on china, they want to build relationships with south east asia, as well as of course america. Trump has come along in a convenient time and many things going on with this trade war and other things, it has been the spark. Trump has kick started a lot that was already in process. Lpan, thank you so much. I cannot say enough about reading him regularly to understand taiwanese business and economics. Drivel continue to forward the economics, particularly of america. Peter hooper will join us of dark too Deutsche Bank. Futures up fractionally. Retail sales, we will look for those later in the new york morning as well. Please stay with us, from new york and london, this is bloomberg. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Tom this morning, was it tuesday or wednesday day . Wednesday . It felt like friday. Today is friday and friday is overrated. There will be a report on american retail. The bears will look monday. The bulls will look to 2021 and beyond. Are weak for inflation and a very weak europe. President trump suggests testing is overrated. If we did not do any testing we would have very few cases. And francine from new york and london, our conversation is not overrated. Peter hooper of Deutsche Bank will be with us in a moment to the americange