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 a