Transcripts For BLOOMBERG Bloomberg Markets European Close 2

There has not been immobilization like this since the second world war, especially ventilators, because it is hard. It is complex, a very complex machine, computerized all over the place, and very expensive, and right now we are building thousands of week. We have all we can use. You hear the calls. Frankly, you are invited to if you want, you do anyway even if you are not invited. And you see what is going on. Every governor there has not been one patient in this entire massive country and we did not have ventilators when we started. The cupboards were empty. The previous in ministry and left us empty cupboards. There is not one patient, not one, that needed a ventilator that did not get one. Think of that. We are talking about millions of people, big country. Millions of people. Not one person needed a ventilator that did not get it. So we want the continued, blanket lockdown to end for the states. Someave some members embers or some gashes or some flames coming, we will put them out. We will stop them out. We understand this. We will stop them out very powerfully. So we made a big step in our comeback. This was always going to be three months ago, i said to you, this is a very important period, this june period, because we are going to learn whether or not this is a very big, powerful our word, recession, or whether this is a hurricane we recover from very quickly, we recover from in a matter of weeks or days. And we have learned. We have learned. Again, as good as these numbers are, the best numbers are yet to come, because so many areas are still closed or partially closed. Very few actually are fully open. These numbers are with 50 states, and very few are fully open. Even the ones that are very at there are not fully, fully opened. So we are going to have some tremendous numbers coming in. When you look at the airlines, they went from 2 ridership to a number that if it is correct, i would be surprised, but it is a very high number. It is great. People are traveling, and they are traveling in the United States. They are also driving. They are building trailers. A lot of things. They are driving. People are driving. I have to buy one of those things. Drive around town. Maybe i will drive back to new york with our first lady in a trailer. What do they call that . An rv. Well, you should know indiana is the capital of rvs. I think im going to buy an rv and travel with our first lady. I dont think anybody would mind that. We have come together. We are coming together. We have never had anything happen like this. We were all including the media, we were all in uncharted territory. It never happened before. Nobody knew. I cannot be sure. I felt it. I felt we were very powerful to come back. Hardest decision i ever made was when a big group of people, professionals, very professional people, good people they said, sir, the best thing we can do is close it down. I said, what are you talking about . We have this incredible, unbelievable country that has never done better, and you want us to close it down. I cant do that. What are you talking about . And after listening for 10 minutes it did not take long i said, i think we have to close it down. Because of the contagion and the power especially with certain people we did not know the second part. We knew it was highly contagious, but we did not know it hit certain groups of people. That helps us so much in testing and other things. So we are going to protect our elderly. Were going to protect especially our elderly with problems, whether it is hard or diabetes or any problem. It is like a magnet. You are elderly and you have diabetes, or you have a bad heart, it is like a magnet. Isay if you are heavy say thank goodness i am in perfect shape. Thank goodness. But if you are heavy, it is not good. It is a brutal, brutal thing. And again, i started by saying we are going to have a vaccine soon. I said it along time ago, based on knowledge. Based on knowledge. I am meeting with these geniuses. I said a long time ago i the end of the year. I think it is going to be sooner than that. Just finishing about vaccines, we have globalized the logistics arm of our military. We can move hundreds of thousands of men and women in a short time. The vaccine is easy by comparison. We can move hundreds of thousands, maybe more. We have our war with the invisible enemy. We can move hundreds of hundreds of thousands. At a short time, the same people are doing the vaccine and they are fully mobilized. I am going to sign legislation to make important changes to the ppp that will especially help restaurants, hotels, and other businesses that have them very hard hit by the virus. This is going to make it 24 months. I think you know the legislation as well as i do. I want to thank the democrats. We had essentially unanimous votes in the senate and the house. Whether it is unanimous or very close, a lot of people. But i want to thank the democratics who worked together on it. And i hope we can get along with the democrats. It has been a disaster in terms of relationship, but i hope we can get along, because it is a great thing for our country. We did all of these numbers, all of this greatness. We have the greatest economy we have ever had. We did this with discord. We did this with a senate and a with that were not dealing us, and we were not dealing with them, either. Lets just say the posture is ridiculous, because we have a great country. It would make a difference if we could get along, and maybe we can, and maybe we cant. There are a lot of differences. We want low taxes, closed borders. We want people to come in, but you cannot have open borders, especially now, when you have a pandemic. We set a record on our southern border. The wall, which you never hear about, is up to 210 miles long. One of the reasons we are setting a record is we have so much wall built. We will have it up to almost 500 miles very early next year. By the end of this year, we will be over 400 miles. We are up to 210 miles of serious wall. This is a wall that people are not penetrating. This is a very, very powerful wall. Going to be up there a long time. And it has saved us a lot of anguish and grief, but you dont hear about that. One of the hardest things i have ever had to do is get the money necessary, which is billions of dollars, from a party that was totally opposed to it. They gave me other things. The military, we could rebuild. It was not easy. That is not their natural instinct. For the wall, cant have it. We had nine court cases on the wall. But we got it and now nobody talks about it. Nobody even talked about it. But it is great for our country. We have to have borders. , onid long before, i won that great november day it seems like a long time ago, 2016. If you do not have borders, you do not have a country. We have a lot of things to work with the democrats. If we can work along with them, it would be great. If we dont, we are going to do great as a country anyway. Whywe could work would we be open . Done ihave never am totally open to it. We could go steps further. Nobody has done more in three and a half years. Nobody has come close to doing the things we have done. We have rebuilt our military. We have cut regulations at a level that nobody has even come close to. Is four years, eight years, or in one case even more than that. Nobody has done anything close regulations, low taxes, rebuilt military, take care of our vets. Instead of waiting in line for four weeks to see a doctor, they can go immediately outside, get a credit doctor. We pay for the bill. The vet is in great shape and we save money, but more importantly, we save their lives, and we save the quality of their life. They were dying. They would come up to a line. They would have to wait for five weeks. They would not be very sick. By the time they see the doctor, they would be terminally ill. We dont have that anymore. You dont hear been stories anymore. That does not mean go out and find them, because you will be traveling the world looking for an unhappy vet. Have accountability. We had a lot of bad people in the v. A. It is called v. A. Accountability. We can now fire people that do not treat our vets good. We have sadists, thieves, bad people. It is called v. A. Accountability. Almost 50 years they have been trying to get it. Choice, almost 50 years they have been trying to get it. For many years i have been hearing about it for years they have been trying to get be a choice. Choice means you can have a choice of a doctor. You dont have to wait in line. I have to say the v. A. Has great doctors, but you cant get to them very quickly. Now, they go outside and they take care of themselves. So we have had a great morning. This is just the beginning. Its going to be incredible. Im going to sign a very important piece of legislation. You have been listening to present come at the rose garden. He will be sunny changes to the payroll Protection Program, dealing with how much money needs to be spent on payroll versus things like rent and utilities, and expanding the timeframe you have to use those funds. Hopefully this supports Small Businesses. It was a long and he is not done yet conference so far, a lot talking about how good the jobs market is, about how the Strong Economy will bounce back, and we were in good shape before covid. But again pointing the finger at china, and a bit of a different tone when it comes to china and trade. Absolutely. Interesting he is ultimately signing a piece of legislation that will provide some flexibility for those that still need a great deal of assistance as a result of what is happening with covid19. The policy response is by no means over, both from the Federal Reserve and from Central Banks. Lets get mike mckees take on all this. Your thoughts on what the president had to say . Michael it is hard to know where to begin, because he talked about just about everything under the sun. Just about something alix said, the president saying the economy is in great shape. The economy is not in great shape. The economy is still in very bad shape. There are 20 Million People who lost their jobs who have not gotten them back. We had a good month of hiring in the month of may. Thats what you can say. If it continues, the recovery may be quicker than people thought, but we are not in great shape yet. And that raises the question of what happens next. The president so far has not address that. It will be interesting to see if he gets that in a q and a, if he takes questions. Do they support a fourth round of stimulus spending to try to keep this going . It does appear the Paycheck Protection Program brought people back onto payrolls. The president signing an extension of that today. That could help. But do they need to put more money into the economy to keep the expansion going and get us back . That is the unanswered question at this point about the economy, Going Forward. What i also thought interesting, talking about how the economy was in good shape what he said about china, he said so far he is happy with how everything has been going when it comes to trade. But it felt like it was a dot, dot, dot, in terms of but we will see how it goes. Robert lighthizer in new york said he was also happy with the phase one trade deal. Ader, if they are happy phase two does not feel like it is in the cards. Lara it seems to be off the table michael it seems to be off the table. We do not know if there are any negotiations coming. And the chinese have not been buying that much, particularly on the agricultural side. We did not expect a huge number of agricultural purposes at this time of year, because it is not the harvest season in the u. S. , but you cannot claim that things are going extremely well there are a lot of other flashpoints between the u. S. And china right that had the president and folks in the administration suggesting he might want to abandon the deal or put additional sanctions on the chinese. Those of not going away just because we had a good jobs report today. We will have to see what happens with all of that. We still have tariffs on most chinese product. They still are taxes paid by americans, not by the chinese. That is holding back the economy. We will see if there is any change in the coming months. Guy mike, a lot of companies have taken advantage of the much easier conditions that now exist in the credit markets. It is fascinating to see the junkie asked of the junk that is out there doing really well once again. The market is seeing a vshaped recovery. It believes the debt is going to do well. Some of these companies are going to come back. What many people thought was they would be effectively dead on the ground. If we look to what happens next, do you think there is going to be pressure coming through from governments to try and encourage these companies that have done so well, that have survived the onslaught of covid19, to actually maintain employment . I know about the cares act and what some of the legislation look like surrounding the airlines, but a lot of companies are laying people off despite taking advantage. Michael i imagine there would be pressure on companies to keep people in payrolls, but there would be a lot of pressure on companies to rationalize payrolls. If demand is lower than it was before, you dont need as many people. As we go through the coming months, if Companies Find that, they may decide they need to bring fewer people back, or start letting people go again. There is an ongoing question about what people call zombie companies, companies that are surviving because they were able to roll over their debt. And is that a good idea for the United States . That will be an issue that gets debated as well. You start to get down in the weeds, and it is not something that is going to make a lot of headlines. Alix President Trump is taking questions now in the rose garden. We will keep you updated on headlines that ross that are relevant to the markets, jobs, and the china picture. The changes president from just signed, the flexibility, do we have a sense yet of how many businesses will come back in and want those kind of loans, now that the restrictions have been eased . Michael i do not think we are going to have a lot more companies coming in. Most of that money has been dispersed. The question is, do they keep people on payrolls longer . Is it enough cash that went out to keep people on payrolls for the longer period they are not given to do that was to mark there was a feeling that eight weeks was not long enough. Some companies, especially Small Companies this was aimed at, could not reopen. Do they bring people back onto payrolls right away, or are they holding onto it, waiting to see if they needed the people, and then bring them back on . This gives them more time to figure that out. One of the questions will be, do we need to put more money into this program, because companies are slow to ramp up what they wait to see what demand is . That would be particularly true for restaurants. We saw a huge number of hirings in the restaurant industry, but does that continue as we open up, as we see a lot of restaurants open, but only for outdoor seating . Are putting on restrictions in terms of capacity and restaurants. Are they going to need as many people . It gets back to what guy was talking about. Do we see people laid off . As Companies Come back, we will probably see supply chains relocated over time. Do we see more automation, and therefore fewer jobs . A lot of questions that do not have good answers right now. Alix i appreciate you being with us. Really good breakdown. Thank you very much. Want to point out the dow is now up about 900 points. It is a huge riskon rally as the celeb in the bond market continues, with yields up on the 10 year about 9, 10 basis points. Position is that put the fed in as they come into next week customer coming up, we will talk to larry kudlow. Maybe well get a q and day, maybe not. Larry kudlow will be joining Bloomberg Television later on in the hour. 13. 3 Unemployment Rate has come down. I think as the president has noted, these trends will continue. Alix im alix steel in new york, joined by guy johnson in london, on a payroll friday with a muster surprise and a monster move in the market. The Unemployment Rate taking down to 13. 3 . Some quirks in their argue that we could have seen the Unemployment Rate a bit higher. The number nonetheless very strong, about 2. 5 million jobs actually added to the month of may. The Market Reaction clear. It is risk on. You sell bonds, you buy stocks. The question is, is this the start of a real rotation . We are joined by the chief economist at kpmg. Constance, your biggest take away so far from the jobs number . That we have think seen the worst of it, but this is like saying the patient is off life support but still in the icu. Long, slow climb upwards. But we saw in the may jobs report was very encouraging. It is likely the ppp is contributed to some of these people returning to work. So the program is working as it was intended, to keep people attached to their employer. Really, it just depends on what do we see Going Forward. For example, we will know over weeks thene to two degree to which social closeness will lead to a new outbreak. We have had a lot of it recently. We also know the ppp stipulates workers can be let go in 24 months, once the benefit period is over, without a penalty. It will be interesting to see how far we have climbed out from the bottom, if this can self sustain at that point. Guy we are getting more headlines coming through from the president , who is continuing to speak. The president saying that he for payroll tax cuts and more stimulus. Secretary mnuchin currently speaking, delivering lines as well on what is happening in the economy. He obviously has been pushing hard for much of the stimulus we have seen this far. Constance, i am assuming the easiest jobs to bring back are the ones that come back first, and it takes a while to go from there. And it becomes harder to bring jobs back. How much stimulus do you think we are going to need . How much more job assistance programs do you think we are going to have to see . Constance i think it needs to be a little more targeted, Going Forward. This was very much a broad stimulus, with a broad brush. I think we need to get a little bit more targeted. Certainly, states that benefit from tourism taxes, that benefit from oil and gas taxes, are going to be significantly hit. And then with regard to the income tax that states receive, there is a bit more of a cushion because of the added payroll, the added United States<\/a>. They are also driving. They are building trailers. A lot of things. They are driving. People are driving. I have to buy one of those things. Drive around town. Maybe i will drive back to new york with our first lady in a trailer. What do they call that . An rv. Well, you should know indiana is the capital of rvs. I think im going to buy an rv and travel with our first lady. I dont think anybody would mind that. We have come together. We are coming together. We have never had anything happen like this. We were all including the media, we were all in uncharted territory. It never happened before. Nobody knew. I cannot be sure. I felt it. I felt we were very powerful to come back. Hardest decision i ever made was when a big group of people, professionals, very professional people, good people they said, sir, the best thing we can do is close it down. I said, what are you talking about . We have this incredible, unbelievable country that has never done better, and you want us to close it down. I cant do that. What are you talking about . And after listening for 10 minutes it did not take long i said, i think we have to close it down. Because of the contagion and the power especially with certain people we did not know the second part. We knew it was highly contagious, but we did not know it hit certain groups of people. That helps us so much in testing and other things. So we are going to protect our elderly. Were going to protect especially our elderly with problems, whether it is hard or diabetes or any problem. It is like a magnet. You are elderly and you have diabetes, or you have a bad heart, it is like a magnet. Isay if you are heavy say thank goodness i am in perfect shape. Thank goodness. But if you are heavy, it is not good. It is a brutal, brutal thing. And again, i started by saying we are going to have a vaccine soon. I said it along time ago, based on knowledge. Based on knowledge. I am meeting with these geniuses. I said a long time ago i the end of the year. I think it is going to be sooner than that. Just finishing about vaccines, we have globalized the logistics arm of our military. We can move hundreds of thousands of men and women in a short time. The vaccine is easy by comparison. We can move hundreds of thousands, maybe more. We have our war with the invisible enemy. We can move hundreds of hundreds of thousands. At a short time, the same people are doing the vaccine and they are fully mobilized. I am going to sign legislation to make important changes to the ppp that will especially help restaurants, hotels, and other businesses that have them very hard hit by the virus. This is going to make it 24 months. I think you know the legislation as well as i do. I want to thank the democrats. We had essentially unanimous votes in the senate and the house. Whether it is unanimous or very close, a lot of people. But i want to thank the democratics who worked together on it. And i hope we can get along with the democrats. It has been a disaster in terms of relationship, but i hope we can get along, because it is a great thing for our country. We did all of these numbers, all of this greatness. We have the greatest economy we have ever had. We did this with discord. We did this with a senate and a with that were not dealing us, and we were not dealing with them, either. Lets just say the posture is ridiculous, because we have a great country. It would make a difference if we could get along, and maybe we can, and maybe we cant. There are a lot of differences. We want low taxes, closed borders. We want people to come in, but you cannot have open borders, especially now, when you have a pandemic. We set a record on our southern border. The wall, which you never hear about, is up to 210 miles long. One of the reasons we are setting a record is we have so much wall built. We will have it up to almost 500 miles very early next year. By the end of this year, we will be over 400 miles. We are up to 210 miles of serious wall. This is a wall that people are not penetrating. This is a very, very powerful wall. Going to be up there a long time. And it has saved us a lot of anguish and grief, but you dont hear about that. One of the hardest things i have ever had to do is get the money necessary, which is billions of dollars, from a party that was totally opposed to it. They gave me other things. The military, we could rebuild. It was not easy. That is not their natural instinct. For the wall, cant have it. We had nine court cases on the wall. But we got it and now nobody talks about it. Nobody even talked about it. But it is great for our country. We have to have borders. , onid long before, i won that great november day it seems like a long time ago, 2016. If you do not have borders, you do not have a country. We have a lot of things to work with the democrats. If we can work along with them, it would be great. If we dont, we are going to do great as a country anyway. Whywe could work would we be open . Done ihave never am totally open to it. We could go steps further. Nobody has done more in three and a half years. Nobody has come close to doing the things we have done. We have rebuilt our military. We have cut regulations at a level that nobody has even come close to. Is four years, eight years, or in one case even more than that. Nobody has done anything close regulations, low taxes, rebuilt military, take care of our vets. Instead of waiting in line for four weeks to see a doctor, they can go immediately outside, get a credit doctor. We pay for the bill. The vet is in great shape and we save money, but more importantly, we save their lives, and we save the quality of their life. They were dying. They would come up to a line. They would have to wait for five weeks. They would not be very sick. By the time they see the doctor, they would be terminally ill. We dont have that anymore. You dont hear been stories anymore. That does not mean go out and find them, because you will be traveling the world looking for an unhappy vet. Have accountability. We had a lot of bad people in the v. A. It is called v. A. Accountability. We can now fire people that do not treat our vets good. We have sadists, thieves, bad people. It is called v. A. Accountability. Almost 50 years they have been trying to get it. Choice, almost 50 years they have been trying to get it. For many years i have been hearing about it for years they have been trying to get be a choice. Choice means you can have a choice of a doctor. You dont have to wait in line. I have to say the v. A. Has great doctors, but you cant get to them very quickly. Now, they go outside and they take care of themselves. So we have had a great morning. This is just the beginning. Its going to be incredible. Im going to sign a very important piece of legislation. You have been listening to present come at the rose garden. He will be sunny changes to the payroll Protection Program<\/a>, dealing with how much money needs to be spent on payroll versus things like rent and utilities, and expanding the timeframe you have to use those funds. Hopefully this supports Small Businesses<\/a>. It was a long and he is not done yet conference so far, a lot talking about how good the jobs market is, about how the Strong Economy<\/a> will bounce back, and we were in good shape before covid. But again pointing the finger at china, and a bit of a different tone when it comes to china and trade. Absolutely. Interesting he is ultimately signing a piece of legislation that will provide some flexibility for those that still need a great deal of assistance as a result of what is happening with covid19. The policy response is by no means over, both from the Federal Reserve<\/a> and from Central Banks<\/a>. Lets get mike mckees take on all this. Your thoughts on what the president had to say . Michael it is hard to know where to begin, because he talked about just about everything under the sun. Just about something alix said, the president saying the economy is in great shape. The economy is not in great shape. The economy is still in very bad shape. There are 20 Million People<\/a> who lost their jobs who have not gotten them back. We had a good month of hiring in the month of may. Thats what you can say. If it continues, the recovery may be quicker than people thought, but we are not in great shape yet. And that raises the question of what happens next. The president so far has not address that. It will be interesting to see if he gets that in a q and a, if he takes questions. Do they support a fourth round of stimulus spending to try to keep this going . It does appear the Paycheck Protection Program<\/a> brought people back onto payrolls. The president signing an extension of that today. That could help. But do they need to put more money into the economy to keep the expansion going and get us back . That is the unanswered question at this point about the economy, Going Forward<\/a>. What i also thought interesting, talking about how the economy was in good shape what he said about china, he said so far he is happy with how everything has been going when it comes to trade. But it felt like it was a dot, dot, dot, in terms of but we will see how it goes. Robert lighthizer in new york said he was also happy with the phase one trade deal. Ader, if they are happy phase two does not feel like it is in the cards. Lara it seems to be off the table michael it seems to be off the table. We do not know if there are any negotiations coming. And the chinese have not been buying that much, particularly on the agricultural side. We did not expect a huge number of agricultural purposes at this time of year, because it is not the harvest season in the u. S. , but you cannot claim that things are going extremely well there are a lot of other flashpoints between the u. S. And china right that had the president and folks in the administration suggesting he might want to abandon the deal or put additional sanctions on the chinese. Those of not going away just because we had a good jobs report today. We will have to see what happens with all of that. We still have tariffs on most chinese product. They still are taxes paid by americans, not by the chinese. That is holding back the economy. We will see if there is any change in the coming months. Guy mike, a lot of companies have taken advantage of the much easier conditions that now exist in the credit markets. It is fascinating to see the junkie asked of the junk that is out there doing really well once again. The market is seeing a vshaped recovery. It believes the debt is going to do well. Some of these companies are going to come back. What many people thought was they would be effectively dead on the ground. If we look to what happens next, do you think there is going to be pressure coming through from governments to try and encourage these companies that have done so well, that have survived the onslaught of covid19, to actually maintain employment . I know about the cares act and what some of the legislation look like surrounding the airlines, but a lot of companies are laying people off despite taking advantage. Michael i imagine there would be pressure on companies to keep people in payrolls, but there would be a lot of pressure on companies to rationalize payrolls. If demand is lower than it was before, you dont need as many people. As we go through the coming months, if Companies Find<\/a> that, they may decide they need to bring fewer people back, or start letting people go again. There is an ongoing question about what people call zombie companies, companies that are surviving because they were able to roll over their debt. And is that a good idea for the United States<\/a> . That will be an issue that gets debated as well. You start to get down in the weeds, and it is not something that is going to make a lot of headlines. Alix President Trump<\/a> is taking questions now in the rose garden. We will keep you updated on headlines that ross that are relevant to the markets, jobs, and the china picture. The changes president from just signed, the flexibility, do we have a sense yet of how many businesses will come back in and want those kind of loans, now that the restrictions have been eased . Michael i do not think we are going to have a lot more companies coming in. Most of that money has been dispersed. The question is, do they keep people on payrolls longer . Is it enough cash that went out to keep people on payrolls for the longer period they are not given to do that was to mark there was a feeling that eight weeks was not long enough. Some companies, especially Small Companies<\/a> this was aimed at, could not reopen. Do they bring people back onto payrolls right away, or are they holding onto it, waiting to see if they needed the people, and then bring them back on . This gives them more time to figure that out. One of the questions will be, do we need to put more money into this program, because companies are slow to ramp up what they wait to see what demand is . That would be particularly true for restaurants. We saw a huge number of hirings in the restaurant industry, but does that continue as we open up, as we see a lot of restaurants open, but only for outdoor seating . Are putting on restrictions in terms of capacity and restaurants. Are they going to need as many people . It gets back to what guy was talking about. Do we see people laid off . As Companies Come<\/a> back, we will probably see supply chains relocated over time. Do we see more automation, and therefore fewer jobs . A lot of questions that do not have good answers right now. Alix i appreciate you being with us. Really good breakdown. Thank you very much. Want to point out the dow is now up about 900 points. It is a huge riskon rally as the celeb in the bond market continues, with yields up on the 10 year about 9, 10 basis points. Position is that put the fed in as they come into next week customer coming up, we will talk to larry kudlow. Maybe well get a q and day, maybe not. Larry kudlow will be joining Bloomberg Television<\/a> later on in the hour. 13. 3 Unemployment Rate<\/a> has come down. I think as the president has noted, these trends will continue. Alix im alix steel in new york, joined by guy johnson in london, on a payroll friday with a muster surprise and a monster move in the market. The Unemployment Rate<\/a> taking down to 13. 3 . Some quirks in their argue that we could have seen the Unemployment Rate<\/a> a bit higher. The number nonetheless very strong, about 2. 5 million jobs actually added to the month of may. The Market Reaction<\/a> clear. It is risk on. You sell bonds, you buy stocks. The question is, is this the start of a real rotation . We are joined by the chief economist at kpmg. Constance, your biggest take away so far from the jobs number . That we have think seen the worst of it, but this is like saying the patient is off life support but still in the icu. Long, slow climb upwards. But we saw in the may jobs report was very encouraging. It is likely the ppp is contributed to some of these people returning to work. So the program is working as it was intended, to keep people attached to their employer. Really, it just depends on what do we see Going Forward<\/a>. For example, we will know over weeks thene to two degree to which social closeness will lead to a new outbreak. We have had a lot of it recently. We also know the ppp stipulates workers can be let go in 24 months, once the benefit period is over, without a penalty. It will be interesting to see how far we have climbed out from the bottom, if this can self sustain at that point. Guy we are getting more headlines coming through from the president , who is continuing to speak. The president saying that he for payroll tax cuts and more stimulus. Secretary mnuchin currently speaking, delivering lines as well on what is happening in the economy. He obviously has been pushing hard for much of the stimulus we have seen this far. Constance, i am assuming the easiest jobs to bring back are the ones that come back first, and it takes a while to go from there. And it becomes harder to bring jobs back. How much stimulus do you think we are going to need . How much more job assistance programs do you think we are going to have to see . Constance i think it needs to be a little more targeted, Going Forward<\/a>. This was very much a broad stimulus, with a broad brush. I think we need to get a little bit more targeted. Certainly, states that benefit from tourism taxes, that benefit from oil and gas taxes, are going to be significantly hit. And then with regard to the income tax that states receive, there is a bit more of a cushion because of the added payroll, the added Unemployment Benefits<\/a>, and the onetime stimulus checks, and the ppp causing firms to rehire people. Statesl glitch is where are receiving sales taxes. Of course, that is never going to come back. It could be there is some assistance needed to bridge the gap therefore states. And course we need much more attention on medical care. We need attention on testing, contact tracing, best practices, and that is going to make, i think, a significant difference in how successful our reopen is. Alix we only have about a minute left, but i wanted to look ahead to next week, the fed meeting. Does any of this make the feds job harder or easier, come wednesday. Ita constance i think makes the feds job about the same. They are acting as lender of last resort. They are providing liquidity. They have obviously provided significant liquidity, more than any other major central bank, in terms of money supply. We are up significantly, yearoveryear, and we are seeing much greater increases than the bank of china, bank of japan, ecb. And it is needed. A vshaped recovery is not still our base case. It is more like the square root where we come up sharply and then see a slow climb. The fed will do the appropriate monetary policy. In some sense, their job could be considered a little easier, but dont just look at one data point and extrapolate all the way to the future. There is still a lot of volatility in terms of data and in terms of the economic landscape in the next several months. How big have to wonder the revision can be next month. It could be absolutely enormous. Constance, stick around. We still need to carry on this conversation and adjust what we have learned today, the implications for the u. S. Economy and by extension the global economy. Constance hunter, chief economist at kpmg. The market is flying. The dow is up nearly a thousand points. Boeing is up by over 200 points. Massive week15 , a for boeing and airline stocks. Nasdaqot only that, the 100, record high. The nasdaq surging to surpass its record closing high. Larry kudlow coming up next. When you say what youre in the mood for, the xfinity voice remote will find exactly that. Happy stuff. The groups happy, im happy. You can even say a famous movie quote and it will know the right movie. Circle of trust, greg. Relax, the needles are jumping. You can learn something new any time. Education. And if youre not sure what youre looking for, say. Surprise me. Just ask what can i say to find more of what you love with the xinity voice remote. Guy what a day. European markets flying as a result of what we have seen in the jobs report out of the United States<\/a>. We are seeing a big rally on both sides of the atlantic. It has been a huge week, particularly if you are a thrar dollar investor. Lets look at the numbers and the session. You can see the Immediate Impact<\/a> of the payroll number that came through. Surprising just about everybody in terms of the very Strong Performance<\/a> that we have seen, a plus rather than negative number being delivered. In terms of what we are seeing today, this is the session. Its taken us up toward session high, 2. 5 . Lets show you on the week what european equities have delivered. Even in pounds, the numbers look impressive. The ftse up 6. 76 . The dax up 11 . If you are a dollar investor, you have made nearly 13 this week, nearly 11 in the dax. In spain you have made over 13 , a similar number in the italian market as well. Remember, we have also had a story coming out, more stimulus being added than anticipated and the germans adding stimulus as well. To give you an idea of what the sector breakdown looks like, we are seeing some of the most beaten up areas bouncing back strongly. You will see a similar story when it comes to the credit market. Some Strong Performance<\/a> being generated. The beatenup end of the market starts to surge. In terms of some of the sectors as well, it is the airlines, those kinds of companies that have done the best, and they have been what has been driving the market. Alix, its buy equity, buy anything that looks strong, banks, oil and gas, travel and leisure, insurance all coming back. What i think is interesting as well, always worth paying attention to, you are still seeing a bid in areas that have done well, food, health care, and utilities. But the bond markets today, alix, a very different story. Alix great point. You think if we are into a reopening trade, you would be selling winners, buying losers but its more nuanced than that. I am glad you brought up yields. Financial flying, up 5. 5 . The curve is the steepest we have seen since 2013. The selloff really continuing. Are we going to hit 1 . I am trying to figure out what that means. If we had talked about that a month ago, it would have been panic but now it means a good thing. Is that artificial maneuvering from the fed, passive yield control or are we really talking about some kind of better growth environment Going Forward<\/a> . So the bond market following the equity market expecting some shape recovery. Guy yeah, i the market seems to be really far ahead of itself in certain respects. The vshaped recovery was always something we were trying to understand. Are we starting to see evidence of that . We are far away from getting a clear understanding of exactly what is happening here in terms of the economy, trying to get a klee understanding as to what clear understanding as to what is going to go on next. We clearly have a white house that is on the front foot at the moment, alix. There is a victory lap going on, but i wonder ultimately if the fed can take credibility for what is happening. It will be interesting to see what larry kudlow has to say on that front. Alix thats coming up in just a few minutes time. It brings the broader question of what we are seeing from Central Banks<\/a>. Merkel and europe got their act together. Now you have monetary and fiscal policy working hand in hand. If we do get a steeper recovery here, that bodes well for europe. That supported a lot of people that werent working but they didnt have to be unemployed. Here in the u. S. It was a different tactic, supporting Companies Rather<\/a> than the individual workers who were in the companies, and is that labor flexibility going to look different for us if we do have some kind of v . Guy i think ultimately even if we do get a v, its not going to be a complete v, alix. There is still going to be a high level of unemployment at the end of this than when we came into this. I think that will be a huge challenge for policymakers particularly as these people are likely to be some of the most challenged in terms of their socioeconomic options. I think it will be really difficult for policymakers to figure out how to get the last or 4 , maybe 7 , 8 people back to work. In some ways, the easy bit will come now, as the economy starts to reopen. I dont think we will fully understand the impact, whether europe got it right or the u. S. Got it right until much later on or further down the road, because i think the easy lifting will happen over the next couple of months. Today may be an example of that, starting to reopen the economy, people are starting to go back. I dont think we know how it will happen. I also dont think we know how the economy has been reshaped here. In terms of the industrial story, what is going to change . I think it will be those jobs that will be tricky to bring back. Some service jobs may come back. Yes, probably more with social distancing, but probably going to come back relatively easy. Some industrial jobs, much tougher, i think, alix. Alix yeah, its a good point. Theyre selling bonds and buying stocks. Markets in the u. S. Totally flying. Abigail will give us an update. Abigail stocks in the u. S. Are flying. Risk asset up in a big way on the jobs report. Very fortunate for this country and those 2. 5 million americans who are in new jobs. Relative for what is happening for stocks, at one point the s p 500 had its best day on paper in two months. Its up 3 , best day in three weeks. The russell 2000 scorching hot. Also the dow transports up 5 . Both those indexes led out of february. Those very sensitive areas. We are seeing a bigger rally there. Interesting, we are seeing because of the cyclical tilt to the rally, tech is up less. The nasdaq up 1. 9 . What we do have is a new yull time high, imagine that. Very bullish. It reminds me of late march when investors wanted all in on stocks. All 11 s p sectors are higher. The best sector is is energy, higher with oil up 8 . We also have industrials up sharply higher, up 5 . Financials up 4. 6 . Financials getting a huge lift not just from the yield curve steepening. As we take a look at that, we are looking at the biggest backup to the 10 year yield on record. Going all the way back to 1962, the 10 year yield rising as you can see by 28 basis points. Technically its now above the 50 day moving average. You have to wonder if we will see a rotation out of bonds perhaps into stocks. Alix abigail, thanks a lot, really appreciate that. Coming up, we will speak to white house Economic Advisor<\/a> larry kudlow. Dont go away. This is bloomberg. Guy from new york city, good morning to you all on bloomberg tv and on bloomberg radio. I am pleased to say that joining us now is larry kudlow, National Economic<\/a> council director. I understand we are tight for time, i understand its very hot in washington, d. C. So i will try to keep this short for you. Thank you for your time. Quite clearly a huge up side surprise for the jobs report in america. An administration looking to do more. Your colleague talked about getting everyone back in the labor force. The president talked about more stimulus. Talk to me about how big and how quickly can we get the package through Congress Fast<\/a>. Larry look, i dont know about the get Congress Fast<\/a> part. We have taken some time off from legislation, even though we are talking to both parties. We have done bipartisan conference calls, and theres always conversations among our leaders and their leaders, but we wanted to assess the economic story and see what the original 3 trillion package was going to do for the economy and let the Federal Reserve<\/a> develop and evolve its various lending facility. So the point, jonathan, is we will come back i reckon after july 4 and we will have a good discussion. We need policies that will help longterm economic growth. I think the rescue package was enormously helpful. I think payroll Protection Program<\/a> probably saved 50 million or more jobs, 510 billion. The story in todays numbers as youve probably covered is the temporary layoffs have gone back to work, roughly three million. That is, i think, partly a direct function of the p. P. P. Program and the tax rebates and unemployment help. So there you have it. Jonathan i dont want to rush into anything. Neither does the president. Several times today, he mentioned that we would have bipartisan talks. He is still sticking to the payroll tax holiday for the work force which i think is a terrific idea. We are looking at a number of progrowth options inside the administration right now. Jonathan lets talk about the enhanced Unemployment Benefits<\/a> that expire next month. There were concerns that maybe they would discourage people going back into the work force. Quite clearly if the report today is any guide, that is not whats happening. What is the white houses position on extending those Unemployment Benefits<\/a> . Larry we havent made a final decision yet, so i cant get ahead of that curve. I would say there is a lot of omentum to reform the 600 plusup. There are probably better ways to get around the disincentive problem. You are right, it didnt show up today, but its early and i am concerned about that. We may reward work force for going back to work. We are looking at a number of options on that score. Bear in mind, jonathan, i dont think todays numbers was a onetime thing. I mean, the business openings by may 12, the survey week, was less than 50 small business. But the chamber of commerce down here is estimating now in early june, nearly 80 of Small Businesses<\/a> have reopened. So that means more and more people who were furloughed or temporarily laid off will get back into the labor force in june and july, and so forth. As you know, there have been a lot of green chutes popping up, whether its the driving, the big surge in housing purchase applications and other indicators. So is i think the so i think the economy, the contraction troughed in mid april. It was quick, it was heart breaking with hardship but i think we will have a very sharp rebound and you will see in the second half of the year probably about 20 economic growth. Jonathan larry, i hope we see serious growth. I dont want to get in the business of forecast with you. This jobs market can make people look pretty stupid pretty quickly. How will you know you have done enough on fiscal stimulus in the next month . What are you going to be looking for specifically to tell you whether you need to do more or whether you can pause . Larry we are going to look at the general trends. We try to track every number imaginable, particularly the socalled High Frequency<\/a> leading indicators. For example, i am not going to hang my hat on this, but i will say the apple mobility index is now widely used on wall street. Thats an indicator of people getting out and traveling. Theyre looking for directions. Most of its driving. Thats something we might not have thought about before this pandemic problem but now we are looking at it. I am still looking at traditional indicators like Mortgage Applications<\/a> or new business startups, both of which are rising sharply, and then the traditional indicators of course on jobs, income, and so forth. We are going to look at the panoply of numbers to get a feel for whats working and maybe where the trouble spots are. Jonathan larry, i think we have to spend a little more time talking about the disparity. The president called this a really big jobs report. He said this is a rocket ship. He also said this is a tribute to equality on day when black unemployment actually climbed, on a week where there has been real social unrest. I wonder whether that speaks to the tone deafness that some people are complaining about at the moment, dont we have to appreciate the disparity behind the headline numbers a little bit more, larry . Larry look, i was there. The president didnt denigrate that thought. His answer to that question, which i think was a cheeky question, frankly, was growth and opportunity. And look, you go back to january and february of this year. It seems like decades ago, but it was only a few months. National unemployment around 3. 5 and every single minority unemployment indicator, africanamericans, hispanics, asians, the whole panoply, they were rock bottom, record lows. Thats what growth and opportunity does. Thats what incentives do. We have added to that substantially with direct aid into neighborhoods and the opportunity zones packages, and look, i think you can look forward to more tax cuts, more deregulation, and more trade deals that are reciprocal and fair that will spark an export boom. I am not one that will target individual groups. I think if the overall economy grows, a rising tide will lift all boats and i think that was proven by trump policies in recent years and recent months before the pandemic. Go back and look run your fingernail down those Unemployment Rate<\/a>s. You will see record los across the board record lows across the board. The goal is to help everybody, help everybody. Jonathan larry, we talked about those numbers in the past. You had Great Success<\/a> in those particular areas. I am concerned, why wouldnt we if they have been disproportionately hit after what we have seen come out over the last several months . Larry i tell you what, the bottom of this contraction was i think mid april. Most economists are coming around to that view. So these job numbers came a few weeks later, so i think you have to calculate and examine and assess the next four or five or six, eight months, and then we will look at the story. These things cannot be done overnight. There is no question that the lower wages, lower income folks were the first to lose their jobs. I absolutely grant that, its true. Its also the case, however, if you go back a few months when the economy was booming that it was precisely the lower wage groups that have the highest, fastest growth in wages and income. So thats an example of how a growing economy and growing opportunities will help everybody. So i am just saying on these points, lets not rush to judgment. This is the first genuine, major piece of good news. There is a lot more coming and we will examine everything. Look, i spent my life as a civil rights republican, jonathan, and an equal opportunity republican. I was a protege of Ronald Reagan<\/a> and jack kemp, so i understand the issue. I am just saying that a rising tide will lift all boats and meanwhile we will provide extra help where it is needed. Have a look at the program for opportunity zones. Its a widespread Investment Program<\/a> with tax incentives, health care increptives. Thats something that incentives. Thats something that secretary ben carson and senator scott designed. Thats a program that should get more attention and visibility. Jonathan i would never question your compassion. You have always displayed great compassion on this network and i will continue to give you the opportunity to talk about these subjects. Theyre trying to pull you away. You and i could talk together forever. Le get one final question in on trade. The president said that he could do a lot when it came to responding to china and give them the consequences that he thinks they deserve. Have we seen the fullness of americas response in the last couple of weeks or is there more to come . Larry my suspicion is more still to come. China will be held accountable. We dont have time to go through the litany, but with respect to the pandemic, with respect to what theyre doing in hong kong and other problems, they completely lack transparency. So i dont know we may see more actions there. We are, jonathan, engaging with them on the phase one trade deal. We are. We will leave it at that. Jonathan larry, go and get a cold drink. Thank you very much. We hope these numbers continue and look forward to catching up again soon. Larry kudlow joining us from washington, d. C. Uy, back to you. Alix theyre talking about how theyre engaging in trade and assessing what theyre going to do next in terms of helping those who are still unemployed. He is looking for broad economic improvement that will help everybody. This is bloomberg. Is bloomberg. Guy welcome back. We talk about what is happening in the market right now. Alix, we heard larry kudlow. Which we heard from the president. The market is telling us that it believes the data telling us that a vshaped recovery is a real possibility. Small cap stocks are having an incredibly strong day. Airline stocks are really coming back strongly. Look at boeing. T is a huge component of the dow jones industrials. Oeing is up 18 . The market believes and volatility continues to come down. Austan again, i have to wonder how much of that is the real reopening and optimism or just good. F a buy what was not 30 . St is up sure, there is oil. The second best performing, apache. Then you have carnival. How sustainable is that . We have seen the rotation for a couple weeks now and the yield curve steeper. You have doubts. Economic data not back to the other side of the v. Guy i think thats probably a story for monday morning. But today its about fear of missing out. Its a fear of not being part of what is a huge price rally. I dont know what comes monday morning. Does the market reassess . Does the market look at the data and say maybe we need to be more circumspect . The strategy has been when the data starts to improve you really turn the taps on. That seems to be the strategy that seems to be working now. You pile into some of the most beaten up stocks. The European Equity<\/a> markets are up huge this week. It has been a massive week if you are long equity as well. We have seen the Central Banks<\/a> adding in on that. The data are getting better, but they are telling us that its probably still some way to go, alix. The market isnt on that page at the moment. Does it get on that page . At some point maybe, but not yet. Alix not on a day when we have payroll up by 2. 5 million. Never have economists been so wrong. So its been a pleasure joining us this week. Looking forward to the next. Thats it for guy johnson and i in new york. Coming up balance of power with david westin. This is bloomberg. . David from new york, this is balance of power where the world of politics meets the world of business. No big surprise, the numbers are up. To bring it all to us, we welcome abigail doolittle. Abigail looking at a best case scenario, not just the payroll report, 2. 5 million americans back to work, really fortunate and good news for this country, but its also good news for the stock market which might not have been the case because in some ways the s p 500 up before today. This is what markets were hoping for. Its a by the news event. Investors, the s p telling you that perhaps we are going to see strong economic data. You can see a rally across the board. The dow is up even more than the s p 500. 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