Continues to spread in the u. S. , these hotspots, all of it being pressured by the bloomberg dollar index. Does not feel like a huge haven bid, but the fact that you do have the dollar higher can create a sense of risk off for the risk assets. That is what we are seeing. A little bit of a catch up to reality. Investors not climbing that wall of worry at falling off it to some degree. David and of course we have the numbers out of florida, which were alarming. There was really an uptick. Then we had new york and new jersey and connecticut say if youre coming from a virus hotspot, you have to going to quarantine. That has to be raising questions about this recovery, how fast we will come back. If it is not the dollar, are there other safe havens . Rashad we are seeing a bit abigail we are seeing a bit of a bid for bonds. Earlier not quite so much. Now at the lows a decent bid for bonds. The yen not being bid up. Gold is being bid up. Psychologically it does not help. It has felt to many for last couple of makes last couple of weeks too good to be true that you have fed liquidity saving the system to some degree , and the fact it is diverging from some of the Economic Data, the sense of what people are seeing in the real world, and with the virus hotspot you were mentioning florida, the fact that new york, new jersey, and connecticut could require quarantine. I read that houstons icu beds are to the limits. All of this has been in the tell the last two weeks. The s p 500 down 5 on a self basis. The nasdaq 100 hitting a record high. Over the last two weeks stops down 5 while haven bonds and the yen have been rallying. When you see divergence between haven assets and risk assets, you know something is up. The worst day in two weeks. Lets not forget, two weeks ago you have the 6 selloff in the s p 500. Volatility breeds volatility. More to come on all this uncertainty. That mean somebody is making money. Our people short the market were people cashing in on the shorts . Abigail looking more the options market. A lot of people are getting caught by surprise by this move. Two different pools of investors. This view index created a longterm put or bearish bets on the s p 500. That has been rising and that has been a very good tell in terms of based selloffs, including the one we saw in february. Ratio has been it complacent lows. Those investors are surprised by the degree of risk off, where the longerterm bearish bets our position further out but there is a sense around the vix curve there could be some sort of a correction later this year. Todays volatility may be a bit of a tell on a correction to come. Yesterday, when stocks were up, reminded me of february you had the virus raging in february but stocks in the u. S. Not paying attention to the fact that in china you have the economic slowdown. A similar situation, a reconnection of reality and what is happening with the financial markets. David thank you very much for that report. Markets are moving so we will keep an i on hour. We came in this morning thinking it would be about trade in the u. S. Is proposing 3. 1 billion for new tariffs in retaliation for subsidies to airbus. There may be some coming back reciprocally on u. S. Exports. We welcome michael mckee, our chief economics and policy correspondent. This was not entirely unexpected. This is been in the works for a while. What does it say about the u. S. Eu trade relationship . Michael the u. S. And eu are on a slippery slope, headed for trade war, just with the Global Economy needs. A transatlantic trade war. Back in october the wto gave the u. S. The right to impose 7. 5 billion dollars worth of tariffs on european states that contribute to what were deemed illegal subsidies for airbus. The u. S. Only put on about half of those tariffs. They were on things like wines and cheeses and scotch whiskey. Now the u. S. Trade representative wants to use the rest of the tariff money and impose additional tariffs. The first round of tariffs were 15 on aircraft parts, 25 on everything else. These could be as high as 100 on machinery, trucks, and gourmet food items including british gin, even though the u. K. Has left the eu, they are part of this tariff. The eu is waiting for a ruling from the wto expected anytime that would give them light give them the right to impose tariffs on the United States for illegally subsidizing boeing. The eu says it should be 11. 5 billion, the uss 300 million. The eu has made it clear that if the u. S. Will tariff them, they will tariff us. David in the meantime, if we needed more bad news, the imf came out with revised projections and they revised them down. Give us a sense of what the imf is looking at and why did they have to change their projections . Michael a much deeper recession for the world and most of its countries because the covid virus is hanging around lumper and has done more economic damage. Here is the important point out of this report. The imf says the markets have not priced this in. The markets are too optimistic about how fast the world and the United States will recover. Now they expect global gdp shrink 4. 9 . In april they thought i would be only 3 . In the u. S. Gdp expected to a change8 , that is from the 5. 9 they thought in april. The euro area will shrink 10. 2 in 2020. China one of the few countries that will grow, only 1 . There growth rate was much fact was much faster. They think china will pose a little bit of growth. All countries will return to growth next year, except they will not make up the difference. They will lose a lot more than they will get back in 2021. David i want to pick up on the point you made. They say if that happens the way they think it may, that is something we do not need. David given the fact all of Central Banks arent zero or negative territory around the world, and qe is in place, there will not be a lot they can do to loosen those financial conditions. There will have to be some sort of stimulus that would go into the markets to boost the financial conditions, but at this point, it would be a tough sell were some of the Central Banks, tough road for some of the Central Banks to get something done. It is all bad news. No surprise the markets are selling off today. David specifically with the fed , essentially jay powell has said whatever it takes and has backed it up. The fed has said whatever it takes. That is sort of it. We have an open checkbook. We still have financial conditions tightening under those circumstances. What does the fed have left to do . Michael that is a question i put a some fed officials who do not have a lot of good answers. When they are talking about their toolbox, they are talking about ways of keeping Interest Rates from rising. Theyve already gone to zero. They do not want them to go up. They can do Forward Guidance or yield curve control or qe. Additional stimulus will be harder to come by unless they use qe the way they did coming out of the great financial in thewhere they buy safe areas to try to drive prices down and push people to take more risks into equities. The question is with the valuations we have in the markets now, with a be risking blowing up a big bubble if they did that . David thank you so much to mike mckee, our chief economics and policy correspondent. Coming up, we will talk about going from protests to voting. How could the economic inequality we have in this country affect the voting in november . Will be joined by rishaad robinson of color of change. That is next on balance of power on Bloomberg Television and radio. David this is balance of power. We have had great economic inequality in this country for many years. We see graphically the results of the disproportionate effect of the covid19 pandemic on our black and brown communities, and then the aftermath of the killing of george floyd and the protest that ensued. The question is what can be done. We sure do somebody who is been addressing these issues for many years. He is were shot of color change. Thank you for bit he is rishaad robinson of color of change. For people who are more privileged, who have not experienced of great inequality in this country, what can we learn about this to help make a difference . What do we not understand that we should. Rashad often times what we do not understand is we talk about inequality as an unfortunate, almost like it is a car accident, like it just happens, rather than that it is unjust. As a result of talking about it, it is unfortunate we have all of these ideas that naturally occurs and there is nothing we can do or we can put forth Charitable Solutions to the problems. We can help people get coats in the winter times, we can do things like send Water Bottles to flint instead of dealing with the structural reasons of why a city, because of the ways in which weve created a tax status that has taken money off the books, many cities have to go on attackty and as a result our public resource and public good. It ends up with a situation that is not unfortunate, but unjust. I think for a lot of folks who hear about economic equality, may be to do something, may be put money into those charitable pots around the holidays and wonder why things not changing, it is because you cannot change problems without changing the rules. It is not unfortunate, it is not a car accident. It is a result of a set of choices we have made at the policy level that have gotten us into the situation. Can we get from protests in the street to voting . We hear reports of younger members of the Africanamerican Community who say it is the system and voting only feeds into the system. We need to do something more fundamental than vote to start changing who is in office. What you say to those people . Rashad it a mix of both. Sometimes folks tell black folks just vote when we are out protesting. Black people are the protagonist in the american story voting. No people in america have fought harder to access the ballot, have gone up against more barriers. Even yesterday, the image and stories of people banging on the doors, leading on incredibly long lines, folks have voted. I think a good example we can look at his over the last movementsars, as the around Police Accountability and a movement around criminal Justice Reform have moved from protests at the ballot in terms of electing reform minded district attorneys around the countrys, and those reform minded district attorneys going into the office with mandates at the intersection of criminal justice and economic justice. Reducing the size of jail, which is not just good for our tax base but deals a blow to things like money bail, which is a way in which poor communities are fleeced by the criminal justice system, whereas you are better off being guilty and rich than innocent and poor because folks 70 of people who are behind bars in jail are not there because they have been convicted of anything. They are there because they are too poor to pay for their freedom. Side, we aref these pushing biden and pushing the democrats around what is their agenda going to be as it relates to Corporate Power and Holding Corporations accountable. We are starting to see real things with coming out for things like Debt Free College education, coming out with an economic agenda that will look at how do we deal with homeownership, how do we deal with access to capital, those things are quite encouraging. Since 1980, the white and black wealth gap has constantly expanded. There is no amount of individual work a person can do to overcome those systemic barriers, even while we may have more black millionaires and billionaires never before, we see income inequality continue to expand. We see homeownership cap continue to expand. Those are all related to rules. One clear example of how this plays itself out is in the second version of the cares act that came out during the post coronavirus era, where the loans to Small Businesses all went through big banks, all went from the Small Business administration through the big banks, and then what ended up happy is did not get around to black and black black and brown communities where many of the folks running Small Businesses are not banking at the big banks, do not have relationship with the big banks, especially since 2008 during the banking crisis and the ways in which black communities were targeted with loans that did not pan out and as a result people lost their homes, their businesses, and so much more. We ended up having a set of rules that was meant to help folks, but actually did not help black and brown communities. What we need is not just this idea that if we overlay a policy it will help all communities, but a recognition we need targeted resources. The same way a policy for folks in appalachia is not going to be the same thing for folks in new york city, the same thing is true for different communities from a racial perspective, gender perspective, and elsewhere. So very david helpful to have you on. I hope you will come back. A lot more to talk about. That is Rashad Robinson from color of change. It is time for first word news. We go to mark crumpton. Mark doctors in the u. K. Are warning to prepare for a second wave of the coronavirus. In a letter published in a british medical journal, doctors say local flareups are likely and there is a real risk of a second wave. The warning comes as Boris Johnson is lifting lockdown measures imposed in march and urging the public to go out and start spending. New york, new jersey, and connecticut are taking steps to make sure the Virus Outbreak does not spike in the region again. Announce they will require visitors from states where the infection rate is climbing to quarantine for 14 days. Hospitalizations are down 85 in new jersey from an april peak, and more than 90 in new york. States are in the midst of reopening in phases. A federal Appeals Court has ordered a lower court judge to drop the case against former Trump National security adviser michael flynn. The judge was examining whether the governments dismissal of the case was a corrupt attempt to help one of the president s allies. The Appeals Court said that would harm the executive branch exclusive right to prosecute. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. David this is balance of power on Bloomberg Television and radio. For a brief moment today, alphabet, the parent of google, was over 1 trillion. The markets are being disrupted by this news of covid19. Kailey leinz is here to explain what is happening. Is tech a defensive sector on a day like today . Kailey that is what we have seen over the last couple of weeks. Investors are no longer interested in the cheaper value areas of the market. Stocks like alphabet, notably also microsoft, amazon, apple, which closed at a record high. Today you have news from reuters that the boj and state attorneys general will meet on friday to look at an antitrust probe and alphabet. Politico also reported the doj and states are eyeing up antitrust probes into apple. On the day, both of those stocks are still outperforming the broader market. They are down more than 1. 5 , but youre still seeing tech stocks a bit more escalated from all of the other risks we see going on right now. A bit more isolated from all of the other risks we see going on right now. David thus far stocks have not been hit very much. It is a fascinating phenomenon what is going on with big tech right now. That is kailey leinz reporting on the market on a date we are down about 3 more or less in response to all of the news that has been coming out. We thought we were out of the woods on covid19, but it turns out we were far from it as florida has record numbers. We have the state of new york and new jersey and connecticut saying we will make you going to quarantine if you come from one of the virus hotspots. There are quite a few virus hotspots. In germany they are having their own fair share of trouble. They have had to put 500,000 people back on lockdown because of flareups and specific spots. The market is reacting to a covid19 virus that does not seem to want to go and is not predictable. In the meantime, President Trump says he wants to reach out to black voters this november. Does he have a chance . We will talk with tw shannon, the former oklahoma speaker of the house of representatives. That is here on balance of power on Bloomberg Television and radio. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Im david westin. Markets are having a tough time and its mainly about the coronavirus. We have an uptick in florida. There are a lot of concerns around miamidade. And new jersey are saying that if you are coming from a virus hotspot, you will have to come into quarantine for some time. Now, were are joined by our reporter. Give us an update on where the markets are. If you look at the major benchmarks, we are seeing a nasty selloff. The s p is down, the dow is down. The nasdaq not falling quite as much. Mentioned, you just the worry is a growing second coronavirus wave. Investorsis is what ,ere really keeping top of mind all saying that this was their top worry. Time, over the past couple of weeks or so, we have seen this tone change in the started to see largecap and mega cap performing the best once again. We have seen cruise lines and airlines on the flipside starting to perform underperform. Weve seen these worries seep into the market even as the market retains its resilience. As we know, the markets are always right and they never make a mistake. What exactly happened here . Experts are about this possibility. It is still very soon. It was just two thursdays ago that we saw a decline and then the market regained its footing and continued. Whenever we see the market gets spooked, there is reason to take notice. Said, the market is a forwardlooking mechanism and if it was worried today and showing ,orries of the last two weeks the fastest 50 day rebound on record, there is reason to take notice. There is reason to believe or at least wonder but there is reason to believe the coronavirus might be with us for longer than some had expected and that may feed into corporate earnings and we may not see an economic rebound come back the way we had hoped. Thank you so much. Lets turn to the election come november. President trump attracted 8 of black voters, frankly only slightly below the normal average for republican get it at spirit this year, he said he wants to do better, but is that really realistic given all that has happened . Shannon, theed itw oklahoma speaker for the house of representatives. Better is it realistic for President Trump to do better . Absolutely. The proof is in the putting. When you look at what the president has done in terms of the unemployment rate, the lows in the history of africanamericans, if you look at unemployment as a whole. The president has a proven record. When you look at what he did in terms of criminal Justice Reform. Day, thousands of africanamerican fathers were at home because of what President Trump did trim of Justice Reform. We have just got to cut through the Fake News Media and get it told. Will help us cut through the socalled Fake News Media. Is one thing to grow the overall economy and say and hispanics will benefit as well. Specifically but income and wealth inequality of this country. His tax reform certainly did not benefit the lower paid people. Yout actually did when think about the wealth gap in this country. It was one of the lowest it had ever been. When you think about the longterm strategy for communities that have been displaced, but we really talk about is how we break the cycle of generational poverty. Was so proud President Trump has been such an advocate School Choice initiatives we know many kids are stuck in failing schools and President Trump has really led the way on opportunity as it relates to School Choice. Increased hbc you funding a percent and then he went ace step further so that president s of black colleges dont have to watch d. C. Every year for additional dollars. Think about the Economic Opportunity of africanamericans improving over the longterm, i dont think there is a president that comes close. Do you believe members of the black committee understand and appreciate it . Lets assume that is all right. Think they will be more inclined to support President Trump . I cannot speak of all of africanamericans. I speak a lot of africanamericans every day who are giving it a shot. Listen, we cant continue to do what we have always done. I know on sunday mornings before the election there is always some democratic candidate who comes in and promises hope and change. The Community Never changes. Ago mett trump years africanamericans in the face and said what do you have to lose . Last election, 13 of africanamerican men actually voted republican for the first time. This tall long way to go, but as we get closer and we start drawing a contrast to joe biden, where is joe biden . No one has even heard of this guy. Definingeally start candidates and people get a chance to see the difference, remember, joe biden is the same waswho, in the 90s, locking up more africanamericans than any legislator around, declaring that the youth of africanamericans were juvenile predators. When that gets told, i think even more africanamericans will recognize the donald trump has or hope for the Africanamerican Community. Part of that message has really been about the protests and what has been done in this country. Charlottesville, a lot of people were not particularly supportive of the africanamerican. How does your church react to those stigmas from the president of the United States . This is a turbulent time. When you think about coming out of a pandemic and thank goodness for what donald trump did, certainly any of us as an african american, my heart went out to him and to other africanamericans who have suffered like he did. Thats why i appreciate President Trump for putting forward legislation that holds Police Departments accountable. We certainly have a lot of work to do there in the communities. Stepped uprump has and said he wanted to address them. When we think about the longterm opportunities, it really starts with Job Opportunities and making sure we have a fair criminal justice system. I think President Trump has really started that conversation and has led some initiatives to help in those areas. As a relates to educational opportunity, are hcd views are critically important. They have been ignored for decades and i think there is more work to be done. Hascertainly, the president a motion of unity. Nobody is subjected to protesting. But i believe they are objecting to his violence and destruction of property we cannot have living anarchy. We have to have real enforcement of the law and real leadership coming out of washington dc. Particularly when you have these democratic sanctuary cities. Toas we look forward november, have a couple of conventions coming up. What do you want to hear from President Trump that might appear to the africanamerican voter . I hope we are going to hear about how to return the economy to where it was before the disaster. At the numbers on how africanamericans were doing as a whole, i want to hear that we are going to make America Great again, great like it was before the pandemic. Awant to hear that there is siege of unity where all americans feel appreciated, where we are not allowing people to enter our country illegally. But for the citizens who are here, we have the greatest Economic Opportunities and are supporting Strong Families. Cities, itgreat starts with great, Strong Families and thats what i want to hear from the leadership coming not just from washington dc but all up and down the political spectrum. Cities we see that are in turmoil have been led by leftist regimes for generations people are recognizing it is time for a change in the cities that i think youre going to hear a resounding message from the president during that convention. The government has extended trillions of dollars to try and get the economy back on track. There may be a trillion or more coming. Is it your sense that has been distributed equitably to help the least fortunate web and the hardest by the pandemic . I am a banker here in oklahoma city. I could tell you the program has been a resounding success, particularly minority businesses. About 40 of the loans we have done have been to womenowned businesses 20 to the minority community. We are seeing it affect all shifts not just the once big banks focus on their yeah, i think it has been an elitist moreed there certainly need they have the available resources. At the end of the day, the program was made available in record time. I applaud President Trump for bringing congressional leaders together and signing that bipartisan piece of legislation and then also having his agencies at the Treasury Department do their jobs. I applaud Community Bankers around the country to make sure those programs reached where they needed to. So absolutely i believe it is equitable, more could be done. Completely out of the woods on covid19 yet, not until there is a cure or at least an until then, were going to need our leaders to provide leadership and recognize there is not an exception to covid19. We were joined by the former speaker of the house of oklahoma. In coming up here we are going to talk to our politics contributor and a professor. Thats coming up next on balance of power. This is a balance of power, im david westin. There were some primaries held yesterday. To go through it, we welcome our political contributor and effexor of local signs at iona college. Do these primaries point us any particular direction . Really on the rise in the democratic party, particularly in states like new york, but we have also seen it in places like tuckey. We are seeing that him people simply dont like the establishment, so none of this yesterday is good news. We saw Donald Trumps chief of staff mark meadows went down to double digits to a 24yearold in the North Carolina runoff. Of course, flipped to new york and you see longtime representatives like eliot engel. I dont think the race is quite called yet, his progressive challenger is up very strongly and it looks like his long, 30 year history in the house may be over. Rise ands are on the aoc had a very strong finish in her race. Elliott ingle, the representative for my district, we knew he had some challenges as a problem. We werent sure about the congresswoman for a long time. We are not, and there were some neat challenges in new york from the left. Maloney is another one. She seems like shes in a better position but its really shocking. She is something of a beloved figure and i think what we are seeing from the Progressive Left they are all organized and very wellfunded we have seen that across the board and so many races in new york they have really come on strong. Andrew cuomo has faced his share of aggressive challengers but the point is moderates have to watch out because there will be a lot more come november or next year. We also had a New York Times poll out on the National Race which did not seem like encouraging news for President Trump. Really tough news. Of course, it shows biden with a lead that follows a fox news poll, which showed biden with a 12 point lead nationally. Trump campaign can rightly say that you cant trust and dont need to look at National Polls at this point, but if you dig deep, and both of the polls he is losing women, collegeeducated, hispanics, africanamericans. Most importantly, he is losing seniors to joe biden and that is a big problem for trump. He carried seniors by almost 910 points. Look at the state polls, those are also not looking good. I was looking at a compilation. At a potential states, he is only winning narrowly in four of those. We have news crossing the bloomberg. Senate democrats have not blocked the Republican Police reform bill. To what extent will this be a big issue come november . This was in the aftermath of the tragic killing of george floyd. This will be a real issue. Ever quite measures the most important issue tends to be the economy. But given what has happened in the last 12 months or six weeks it is particularly important, as we saw last night. You can see the challenger down in Mitch Mcconnells seat, he really benefited an awful lot from the work he has done. Going to be as big issue Going Forward and i think both democrats and republicans are going to figure out how to speak to their voters. We have already seen President Trump testing out message and in terms of how to grapple with the momentum on this issue of policing. Talking about the economy and money, how is the money reach going . Joe biden maybe catching up. Piece of that news for the president was that joe biden beat him last month in terms of fundraising. Obviously, the president still has a huge advantage there, joe and wes raising money saw the fundraiser with barack obama. I do think that depending on what the democrats can do, they are going to have to raise because the present has an awful money. He lot of ,oe biden is traveling a lot but it still does not seem to have impacted his fundraising over the last month. All of this momentum is really going to help the Vice President there. R president always great to have you. In the next hour, we are going back to bloomberg invest. We will hear from others like David Solomon and bridgewater. This is balance of power. On Bloomberg Television and radio. David this is balance of power. We have been watching the markets closed for the entire hour because they have been selling off on news of the coronavirus kaylee is here to take us through what we are seeing. We are off the lows of the session we are still down on the major averages and i could point to a number of reasons why. You have the fact that valuations have gotten lofty, you have renewed fears of tensions on trade. That was true when i came in this morning, when we really sought the selloff deepening was when we saw headlines about the surge in coronavirus cases. Houston area intensive care units were set to be at 97 capacity in the announcement quarantines, all of that seems to be rattling investors, shaking the resilience you have seen. They are very optimistic the crisis is nearing its end they are hoping the economy will recover more quickly than indicated. In cases of resurgence may be throwing a little bit of cold water on that. As a practical matter, a lot of people talk about the fact that markets be getting ahead of where the Economic Data is. It raises the question whether the markets were a little bit ahead of where the facts were. I think that is the right question to ask. Market valuations are trading at a multiple of 20 times earning expectations, so its also about the corporate profit outlook. Those stocks are doing a new resurgence. Some of them are rallying on the idea that demand is going to come back and travel will pick are the sectors that are most under pressure. Maybe demand recovery is not going to happen quite so strongly quite so soon. Least thats the fear, at thank you very much for the report on the markets. We will be one, the radio and really devoting most of the time to a discussion between David Solomon and john nichols with. John micklethwait. We will listen to both of them, among other people command on the second hour of Balance Power on bloomberg radio. This is bloomberg. It is 1 p. M. In new york 6 00 p. M. In london on vonnie quinn and welcome to bloomberg markets. Were going to take you it is 10 p. M. In to the bloomberg invest global summit, bringing you the biggest names across finance, including david airedn and bob prince ill be speaking to the ceo of the tennis association, just one day after novak
vimarsana.com © 2020. All Rights Reserved.