Global recession since world war ii. Senate democrats with a Sweeping Police Reform bill. Manus 6 00 a. M. In london, 9 00 a. M. In dubai. I have two pieces of paper, one is the dollar destruction story, is the bondte one vigilante trade it was not really a bear market, but what i like is he says the market selloff was a panic attack. I want to tell you i have had more panic attacks since 2009. I think they are inextricably linked. Nejra it is always great to kick off the show with an update on how many panic attacks you have. I love the daily comments, he has coined another acronym, mother of all meltups. To classify what happened in the selloff is a bear market is if we are talking about a bear market, you might expect more losses to come. If you see this as a panic attack, you could have faith in further games. Erase see the s p 500 yearly losses. We are seeing green on the screen in asia for several days in a row, but weakness in u. S. Futures. What a stunning move, 45 rally from the march low. 5 from a record. Citigroup questioning what we have seen in terms of the rally, but you have other investors questioning how bearish they were. We talked about dollar weakness, a ninth straight day of declines. We study up today, the 10 year yield dropped a little, and oil edges into positive territory. The dollar is absorbing privilege. Markets, on the day the , the bond vigilante said he may no longer refer to it as a bear market. It was too brief and ended too strong to qualify. The shocking rally has claimed another bear, Stan Druckenmiller who warned about owning stocks says he thinks he was too cautious. The World Bank Says the Global Economy will contract the most since world war ii, sending millions of people into poverty. Benjamin jones, senior multi asset strategist, state street us now, he is our guest host for the hour. Lets talk about the comments in terms of what we saw was a bear market or not. Do investors perceive what happened in that selloff as a bear market . It does matter if we see losses or gains. Benjamin i think it does, and i pick up on the other comment you made that the market has gone through this panic attack. If you look at price action in march am i you could be forgiven for thinking investors had panicked during that period. The thing for me is that investors remained cautious but not panicked through this period. A lot investors i was talking to were in a cautious position, they were not overly euphoric even though we had a positive market coming into 2020. At the beginning of january we were talking about a trade deal and easing tensions between the u. S. And china, everything looked positive. Investors did not buy into that. There was a lot of cash on the sidelines. During march, investors did get more cautious. They were worried what was going on, and rightfully so. There was not any sign of panic. That is largely because investors had a lot of cash on the sidelines and were not in that euphoric state of mind. When you get that state of mind, you get a selloff. There is a lot of capitulation and forced selling. That did not happen in 2020. We said today, Stan Druckenmiller as you highlighted, investors will be cautious to chase this rally as well. Seen a lot money back into equities or risky assets. This rally has a lot of legs to continue. The other point is, if you look at how sectors have performed, the difference is within the index a lot of winners from last year continue to be the winners in 2020. The tech trade, the growth of value trade are intact. There has not been pressure on investors to capitulate and sellout. It has not been that painful for investors. Rarely suffer from the euphoria moment, i am more of an intermittent panic attack bear. Momentum . E dollars the selloff in the dollar, has that at any level added to the equity binge story . Benjamin i think it started to more recently. The dollar was performing reasonably well in april when equities were rallying. We are seeing a breakdown of the dollar now, and we think that has room to continue. We have a lot of questions about driving differentials currencies lately. I think that will continue. If you look across the developed market space, the rate differentials have largely disappeared. What has adjusted is you can go by u. S. Assets such as u. S. Fixed income, u. S. Equities. We can hedge the Currency Exposure to something you could not do before. There is down or pressure on the dollar going forward. Is theu are seeing morey from europe has been than expected on the monetary side and the fiscal side, which was a bit of a surprise. That will start to help the euro against the dollar. We are looking at dollar weakness, but not a dollar crash in a changing trend currencies since the beginning of this year. Nejra if you think this equity rally has for the legs to run, what is the smartest way to play . Hat as an investor at the index level, by relative trades, by a factor of growth versus value . Benjamin very much being selective. Flows,seeing a lot of etf flows for example suggesting investors have been doing that through this year. The big index funds have not received that strong of inflows over the last couple months. But if you look at factories, yes. They have attracted more of the flow. It makes more sense to play the selective trade. If you think about what covid19 has done, it has not put new trends in place. It has accelerated existing trends. Working remotely for the last few months, and i expect that to continue for some time. That suggests we are more , and also technology for our personal lives. The tech trade continues. Hit is why the earnings will probably be positive for some of those tech companies, whereas manus can we have a quick sum up where we are in terms of tech. A look at the nasdaq at record high, but it is underperforming the s p 500. My question is, is tech richly valued because we look back to february and the nasdaq was far outperforming the s p 500 at that time. Are we reaching expensive levels in mega tech . A briefer path. I think it is still strong. Stocks thate some. Re, but broadly speaking manus ok. Stay with us. I will get you up to speed with their first word headlines. The lockdowns around the world may have prevented about half a billion Coronavirus Infections, according to the first peerreviewed analysis of the impacts of health policy. It comes as the World Health Organization says people without symptoms passing on the virus is very rare. Ofcontradicts speculation asymptomatic transmission. Boris johnson will talk his through thehe plans locked down restrictions as the nation reported the lowest number of daily death since the measures were imposed. No new cases. Ng it is on schedule to reopen nonessential retailers on june 15. A new round of arms control talks between the u. S. And russia. Senior officials will meet in vienna on june 22. Washington will enlist moscows help to bring china to the table. Washington wants a threeway treaty. Past china has balked trilateral communications. Nations are the about to mark the 20th anniversary of the first summit between the leaders. Were hopes this would be a moment of reconciliation. 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. Coming up, ready to help, Christine Lagarde signals a willingness to help solve the german court issue over bond purchases. More on the story. This is bloomberg. Manus it is bloomberg daybreak europe. ec president Christine Lagarde says they are willing to play a more active role in responding to the German Constitutional Court over its Monetary Policy. It is a fresh indication the central bank will work to defuse the crisis. More recentnded crisis fighting initiatives, saying the net effect from last weeks expansion of an emergency Bond Buying Program by 600 billion euros to 3. 5 trillion euros are overwhelmingly positive. The european commissions proposal for a revived Financial Framework and the next generation eu are decisive in this regard. Largestd not forget the Initiative Announced with the associated proposal could have a positive impact on the International Role of the euro. It will be important to get that package quickly. , seniorenjamin jones multi asset strategist, state street bank is our guest host. When you look at what the ecb is doing and germany is doing, the partners say this is game. Hanging, the scale if it is Game Changing, are you taking advantage of that from an equity exposure point of view, or preparing to . Benjamin i would agree with the sentiment, it is Game Changing and will be cast as to do whatever it takes. Annual. Multi it will play out for a long time. That was one of the key points we saw last week. It is the first time we see fiscal and Monetary Policy , somethingconcert that has not happened in recent years. We see that is more of a positive. With aplaying this recent shift in position, we think the euro can strengthen from here. Is onthat is it on sentiment. We are starting to get more positive with some other ys equityountr markets. There are structural issues and we have to remember the European Equity markets tend to be out exports depending on and industrial markets. They are not the new tech market. They can benefit from this improved sentiment. We are getting more positive on the euro. The one area i am concerned about and has done well the last couple of weeks is the Banking Sector. We will get rallies around sentiment at low levels. Environmentre in an where rates will be low for a long time if not forever. The yield curve will be flat. That meet pick up on what you are saying about rates. There are some who believe we are at a turning point for german bunds. A 70 chance the 10 year bond yieldgoes into bund goes are you taking any positioning around bunds or fixed income in europe . The way we play in the fixed income space is to favor or btps over bunds. In a relative sense i think there is compression there. There is some upside on german yields. Think the spread compression between the periphery is the better way to play it rather than outright bets. Even if we get slightly higher yields on german bunds, it will be relatively small. The pressure from policy to keep rates low for a long time still. Manus what do you need to see . What you need to see to become more convicted on paneuropean exposure . Does it have to do with china or internal domestic reform . Benjamin a lot of it has to do with china, and the general trade conditions. Covid, but story is the trade war is in the background as well, that tends to be a headwind for european assets. I would like to see some trade tensions simmering down a little bit, and trade picking up, so people starting to move around the world again, flows of products increasing, that would be positive for europe. And generally a return to more stable levels of inflation across europe. We are seeing a bottoming of inflation in europe and the rest of the world. Stabilization and trade, i am late jumping into europe, i have been pessimistic on europe for a long time, but it is better at the moment to wait for that conviction before you buy in as opposed to jumping in just yet. Nejra benjamin jones, senior multi asset strategist, state street bank stays with us for the hour. Coming up, the u. S. Democrats propose a Police Reform bill urging action after weeks of protest. This is bloomberg. Nejra this is bloomberg daybreak europe. Here is what you should watch out for today, ecb member speak some Monetary Policy at 9 00 a. M. And gdp expected to indicate the start of a deep recession. Secretarygeneral will deliver an address him a strengthening of the alliance any post covid world. Later the fmoc meeting kicks off, they are expected to use the full range of tools to support the u. S. Economy during the pandemic. Nejra and house and Senate Democrats propose a Sweeping Police Reform bill. Joining us with the latest is annmarie hordern. What measures are democrats proposing . Annmarie democrats are taking the energy on the streets about Racial Injustice and Police Brutality and want to put it into concrete legislation. Some measures talk about prosecuting Law Enforcement officials, making that easier. It also looks at things like banning chokeholds, no knock warrants. Nancy pelosi said this is a first step with more to come. Joe bidens campaign praised this package. How this get through the republicans and white house remains to be seen. Manus can we talk about the World Health Organization, the latest discussion around transmission from asymptomatic patients. Annmarie it feels like a 180. The worry was asymptomatic are the ones spreading it around, but now the world is saying it is harder and rare. They say it appears to be rare that an a sympathetic person transmits it to a secondary individual. It is based on reports from a number of countries. Early reports sparked that concern because of this. Of new england journal medicine said this would be the achilles heel for pandemic control, they are waiting on research, but you have to think this is a bright spot. Nejra briefly, november election inching closer, what is the latest on that front . Is what is going on in the nation when it comes to the reform bill, how will that be painted . President trump wants to get those Massive Campaign rallies with voters back in attendance. Joe biden biden is meeting with andrtain number of people only just started seeing people, and he is wearing his mask. Two Different Campaign messages heading into november. Manus are you ever coming home . Annmarie hordern in new york. Billions of euros to the rescue. Right here on bloomberg. Manus good morning from dubai. I am manus cranny. Nejra cehic alongside me. This yearserases losses, seeing an almost 45 rally from its march low. Stock futuresu. S. Trade mixed. Asian equities look at the longer stretch of gains in two years. Christine lagarde defends crisis fighting measures, saying the pandemic plan is targeted and proportionate. The worst global recession since world war ii. House and Senate Democrats propose a Sweeping Police Reform bill. Top lawmakers, including nancy in honor ofled george floyd. Welcome to bloomberg daybreak europe. Forave erased the losses the year on the s p 500. The 45 rally, mother of all what is interesting is he is starting to question whether the selloff we saw as part of the pandemic should be called a bear market at all. The reason this matters is if you see it as a bear market, you might prepare for further losses. If it is just a blip in what is still a bull market, maybe you prime yourself for further gains. Manus indeed. Part of the narrative as well is going to be the dollar. The dollar is down for nine days in a row. That moniker that it holds might challenged. Our guest host says the rally has less participants than we would normally have seen and the gns. Still rei the dollar down for the eighth day in a row. This exorbitant privilege that moniker will be challenged. The saving rates in the u. S. Are plummeting and deficits are mounting. We are seeing goals flipflop. Bethe dollar drops, you may one gold in your portfolio. At the bond market. Of course, our people closing out ahead of the fed . Will yield curve control come in . Will it be muted . I cannot see anymore prices. I am not going to bust in the blind because that is too dangerous even for me. Lets talk about that comeback kid. Log onto the pension fund and see how battered and bruised it still is. The s p 500 the strategist who coined the model. Theay no longer refer to march selloff as the bear market. The plunge is exceeding the conventional definition, it was too brief and it ended too strongly for a bounce to qualify. He called it the 66th panic attack since 2009 and the shocking rally claimed another bear. A legendary investor who warned about owning stocks that he now thinks was far too conscious during current market gains. The Global Economy will contract, sending millions of people into poverty, manus. Manus lets turn to europe now because the french government will present a plan worth billions of euros to the Aerospace Industry. To the aid package, it will be aimed at the european jet any factual. The engine maker. And hundreds of french suppliers that have seen their business quite literally dry up overnight. Lets get to our colleague and correspondent. Good to have you with us. To support the Aerospace Industry now and what exactly can we expect . This comes as a part of many packages for these french, auto, and tourism sector. The auto plan a couple of weeks ago, 8 billion euros. The industry was next. The newspaper is talking about potentially 10 billion euros for the aerospace sector. We should find out the details in the next couple of hours. This will come separately on top of the 7 billion euros of loan guarantees already for air france klm. It is unclear how much money will go directly to airbus. Of course, we know that this will help suppliers. As many as 200,000 people in france. Some of the suppliers are very strategic. They are also defense suppliers. We expect, for example, some aircraft orders guaranteed by the state. Some extension of parttime unemployment subsidies and a specific Investment Fund for those suppliers. Just like we saw with air france, the rescue package was tied to a reduction in Carbon Emissions so we expect similar measures to be announced for the plane makers and suppliers today. We talked about developing some hybrid claims for the next few years. You. good to talk to airbus had years of fully booked orders before the crisis. Is that no