Domestic and geopolitical tensions, everything from what is going on in minneapolis to the president versus twitter. We will obviously be taking you through those stories and a lot more throughout the day. The s p 500 is down 0. 25 . Dollar general is once again the best performer today, but retailers lower in the s p, from gap to nordstrom. Harley davidson down 7 , matt. I know you take a special interest in harley. Yuan something we are at. Ng a close look some pretty broad we getting this last week. Right now offshore, the yuan is 7. 1666. At the dollar has been weaker, but it has also been above 99 this week as well, so plenty of whippy action for the dollar index. Gold futures up 0. 8 . A lot of fed speak as well. We will be discussing what Loretta Mester said to bloomberg a little earlier on in a few moments, and we have Jerome Powell coming up in the next hour. 6 t Harley Davidson down yesterday, so it has lost basically 1 10 of its value over the last couple of trading sessions. Here in europe, we see losses on the broader stoxx 600 index, as well as steeper losses on the ftse. That is really ample hide by the gains in the pound. If weuld be noted, havent said it enough already this week, there was a pretty decent rally every single trading session this week before today. We saw stocks really ramping up, so it doesnt surprise anybody that theres profittaking today , although the question of has the narrative shifted from the recovery to china is one we will be asking a lot. You can see rollsroyce down 12 today. Rollsroyce downgraded to junk. This is the jet engine maker, not the car brand owned by bmw. They fire 9000 people and back off a turnaround plan, just dying to just trying to stay alive. For more on what is going on in markets, we have christopher wolfe, First Republic private Wealth Management cio. Let me ask you first about Federal Reserve pronouncements. Today is the last day before the blackout before the june fomc meeting. What is your outlook for with the fed does between now and the end of the summer when we see the worst of the Economic Data come and go . Christopher that is a great question. A steadyen holding hand on the wheel during these turbulent times. There is also been a bastion of creativity, coming out with a lot of new programs. Who would have thought they would be buying Corporate Bond etfs at this point . We dont expect a lot of things that are very different from powell either today in his speech, or even go into the summer. Theres going to be a lot of continuation of the same plan, buying things, stabilize the economy. We would expect them to evolve their plan things like Consumer Spending recover, jobs recover, and Consumer Confidence. Those three things need to move in the same direction in order for the said for the fed to change course, and our view. Ultimately, that level of fed support we expect to continue as long as the numbers we continue to see remain week. We think the fed is going to be continuing with their programs for quite a while. In the so much is broken u. S. Economy right now. What are you telling your clients . The fed is doing all it can, but will it be enough to come up for example, keep asset prices where they are and grinding higher . Christopher thats a great question. Without more on the fiscal side, we think it is going to be very difficult for asset prices to rally on a longterm basis. Right now, this feels a bit like a bear market rally. We could retest some of the old highs. Theres a lot of gas in the system from the fed. In fact, some of the healthcare side of this equation is turning out better than expected. If you look at some of the gdp waited by state hospitalization, a large portion of gdp in this country is actually on demand. In fact, more than half is. So there could be a wave of reinfection, etc. , but the system is much more prepared for that. From that standpoint, things are better than where they were. We are much more prepared. What needs to be seen is the job creation functions start to pick up, the job return function before it turns into a job from a temporary loss to a job determinant a job permanent loss function. Our expectation is that we see that we very slow, and it is going to take several quarters, well into 2021. As a result, markets probably go through a period of turbulence betweenthe disconnect job creation and asset inflation is going to stay wide for a while. That is a recipe for market volatility. Add a political election into the cycle, and you will see that going into the end of the year. We have been telling clients it is still time to be patient and be cautious. Whenever i ask investors why u. S. Valuations are much higher or not much higher , theyuropean valuations always talk about the faangs as if they have laid everything up, but you noted that 95 of the companies in the s p 500 are above their 50 day moving average, which is extremely unusual. Does that make you think that may be this isnt a bear market rally . Maybe this is a march 2009 recovery . Yes. Topher we just had an internal meeting on this exact topic yesterday. It is very hard to tell. I would say the data is not conclusive. While the technical singles you quote, and we are very observant of really starting from a low , theres alsory other things that concern us. A wide number of bankruptcies are looking to increase. We havent seen the revenue numbers come in for the second quarter. Expect them to be bad. Given the Consumer Confidence and job losses, we are in depression era job losses, it is going to be harder for the consumer side of the economy to recover at the same ace that the markets asked the same pace that the markets are anticipating at the same pace that the markets arent is abating. We would like to see a bit more fiscal stimulus before calling that a durable bull market rally. We think the composition of the index is going to end up changing over time. Youre going to see true bankruptcy and the addition of more tech heavy and a more l care heavy index that has higher return on capital, higher growth numbers. You could see u. S. Valuations stay high relative to history and relative to other markets for that reason, an addition to all of the stimulus going on. It can be a confusing time. Why are the valuations so high, and how are we looking at that relative to the weak economy . Whats closing that gap is fed policy and that index change. Our recipe here is one of turbulence between here and the remainder of the year, so we want to be a bit more patient to focus on highquality companies in the u. S. Matt i guess focus and discipline are key especially in confusing times. Christopher wolfe, thanks very much for joining us with your insights today. Now lets check in on the bloomberg first word news. These are the top stories for the terminal. For that, we bring in ritika gupta. Ritika the coronavirus halt purchases of all but the most essential goods and services in the u. S. Last month. Consumer spending plunged in april by the most on record. It fell 13. 6 from the previous month. Consumer spending accounts for about 2 3 of the u. S. Economy. In minneapolis, a third Night Protests over the death of george floyd. Demonstrations spread to other cities. In louisville, kentucky, at least seven were shot during a protest over another police shooting. On twitter, President Trump lasted the mayor of minneapolis, called the rioters thugs, and threatened to send in the national guard. Between, saying it violated their rules for glorifying violence. Earlier this week, twitter began selected factchecks of its tweets. Today, President Trump will announce his response to chinas proposed crackdown on hong kong. He says he is not happy with legislation that would curb freedoms in the former colony. That is opened the door for the president to impose penalties that could range from modest sanctions to revoking hong kongs special trading status. 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. Im ritika gupta. This is bloomberg. Matt thanks very much. Coming up, u. S. Consumer spending plunges to a record 13. 6 . More on the health of the consumer in the wake of the virus. Derek webster, card flight founder and ceo, joins us next. This is bloomberg. Matt live from berlin, im matt miller, with vonnie quinn out of new york. This is bloomberg markets. Lets check what is going on in the markets without go doolittle with abigail doolittle. Abigail the Asian Session was a little bit weak on these china tensions, but on the week, it is a different story. We are looking at a pretty risk on tone. The nikkei really outperforming, up 7. 2 , its best week in almost two months. The stoxx 600 also sharply higher. Crude oil about flat on the week, but for the month of may, crude oil having its best month ever, going all the way back to 1983. Really quite a rebound there. Perhaps some optimism on the economy. Where we dont have optimism, the record fall for Consumer Spending that you were , theoning, down 13. 6 worst ever on record going all the way back to 1958. Really pretty amazing. Not surprisingly, we have Consumer Discretionary stocks the worst, including nordstrom, Harley Davidson, and the gap. Some pretty big declines there as investors and traders fret that week spending may continue weighing on Consumer Discretionary stocks. Matt so you consider Harley Davidson a Consumer Discretionary stock . You could live without a Harley Davidson . Abigail i could certainly live without a Harley Davidson. Matt i recommend you take a ride, abigail, and see what you think of a big hog. Abigail doolittle with some of the market moves. Its get to Consumer Spending. It plunged the most on record after the coronavirus pandemic halted purchases of all but the most essential goods and services. ,or a read on spending habits Derek Webster joins us, cardflight founder and ceo. Cardflight recently published a Small BusinessImpact Report that analyzes hundreds of thousands of Payment Transactions for this week. How did it look . Derek happy to be here. It looks great. We are starting to see great signs of a rebound. As you mentioned, things were pretty rough in april, and certainly the week of april worst soas our we are back now barely in excess of what we saw in march, which was our previous peak. Matt what kind of businesses are coming back the strongest . I would imagine Something Like a Movie Theater or many petty pedi may be less likely to get people in, but what about home depot, best buy, the bigbox stores . Derek are cork our core customers are Small Businesses. I think theres two areas we have seen. Theres a couple of merchant types that have been steady throughout. I category we call Onsite Technical Services is one of those. That is your plumbers, landscapers. We are seeing things are now running on much 30 above that probably which is driven as much by seasonality as anything else. Lawn care providers, pool cleaners are certainly always going to be in business more in late may then they are in early march. But i think the biggest rebound recently has been in health and beauty, salons and barbershops. They are still running 30 to 35 below that baseline, but we up overth and beauty the previous week. We think that is driven by many of the states starting to reopen , and those businesses being the ones that were pegged the strongest to formal shutdowns. Vonnie do you keep track at all of the businesses that were able andake part in the ppp other programs, and how much that is helping them to reopen . Derek weve actually found that businesses were able to stay open, and even in early april, our active merchant account was still over 70 of its peak, meaning about 1 3 of merchant had shut down entirely, but almost all of those have rebounded at this point, or more than 2 3. We are in the process of doing a survey of our merchants to find out which ones participated in ppp, and if you invite me back in a few weeks, i would be happy to share results. Vonnie what happens next . Is there anything you can do to encourage more use of your services, for example . Are there fees you can lower and so on . Derek we found that fortunately, the types of products we offer, merchants actually figure out the residence merchants actually figured out the relevance of faster than we did. Curbside,ves toward takeout and delivery models, so foodw an uptick in the space of people using our product. Additionally, we are seeing a big shift towards contactless payments, apple pay and google pay, the cards now that have contactless chips on them. Consumers want to minimize their physical contact with the merchant, even when the commerce has to take place in person. Matt nobody wants to touch cash anymore, even here in germany, which had really shied away from any kind of plastic transactions. What are you seeing in terms of bankruptcy . I am sure use our restaurant transactions fall to zero. How many restaurants are back open and taking transactions again, and how many do you think will come back . Derek honestly, we didnt see it fall to zero. We were amazed at the resilience and ingenuity of so many Small Business owners that found ways to stay in business. Again, pivoting to take out and delivery and curbside and all of that, while many businesses did close, i think theres just as many Inspiring Stories of businesses that have found a way to stay open and ultimately cap consumer need. Most people dont want to self cook 21 meals a week. So hats off to entrepreneurs doing that. We serve very Small Businesses, so theres always a high amount of closures, always a high amount of business formation in new businesses getting started, so while our weekly active merchant count is down, and still running down in the 12 ,ersus what it was at its peak we havent seen a huge uptick in permanent business closures. They are still behaving in line with normal levels, so i think we are holding out hope that even the businesses that arent profiting today are going to reopen soon. Vonnie derek, thank you for that. That is cardflight ceo Derek Webster joining us. Toll ahead, we are going hear exclusively from henry mcvey, kkr head of global macro and Asset Allocation. This is bloomberg. Vonnie live from new york, im vonnie quinn, along with matt miller in berlin. It is time for etf friday. Easing ictions are stayathome researches are easing, and businesses are opening up. Here to tell us more is berg etf analyst is bloomberg etf psarofagis. Anasios which etfs are best positioned caption the reserve the reversal . Sios a month ago it was the exact opposite. I would say the biggest beneficiary has been the airtime the airline etf. Incredible this instan streak of inflows. It is likely one of the longest streaks we have seen of any etfs. Everyone is betting that Airlines Come back. But even parallel to jets, you are seeing pickup and some etfs that track restaurants and hotels. There is one in entertainment holds hotels,at restaurants. That is starting to see inflows, see inflows, theater seeing investors positioning and some of these names that are going to benefit when people start going out again. Matt can you tell, when you look at the flows, who is buying these . Is it retail money going into these etfs or institutional moves . Athanasios i think jets is an interesting want to look at because it is a lot of retail. If you look at platforms like robin hood, a lot of the money is coming through that. This is almost exactly the opposite of what some of the bigger institutions are doing. Obviously, buffett had gotten out of his positions and airlines. A lot of retail investors, which sometimes tend to follow retail investors, doing the exact opposite. Isause of that, now jets becoming a pretty decent sized folder in these names, so jets is no i top five holder in american airlines. It is definitely more retail money betting on some of these names. Vonnie thank you. That is tom survey gets that arofagis with etf friday. Big cuts underway at renault. We will have more on that next. This is bloomberg. [ sigh ] not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. The kohler walkin bath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. Kohler is an expert in bathing, so you can count on a deep soaking experience. Are you seeing this . The kohler walkin bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkin bath provides independence with peace of mind. Vonnie this is bloomberg markets. Microsoft has become a mainstay of the global economy, according to matt winkler, bloomberg editorinchief emeritus. Alloweds that individuals to navigate increasing social and workforce disruption caused by the pandemic and other disasters stoped by Global Warming and climate change. I am curious as to what prompt of the piece. Microsoft continued outperformance. W it is great to be with you. One of the things i do with relish is look at what companies are outperforming. We couldnt help but notice that microsoft not only has been outperforming the best companies, the Biggest Companies this year with its appreciation, but also over the past five years. Then, as a result of seeing those two things together came the realization, you know what we are going through with covid19 and the remotely engaged economy actually is accentuating something that microsoft already anticipated 75 of Something Like all of the servers and computers operating systems by everyone worldwide comes from microsoft. Where people are think about how they want to be safe and secure, operating systems are critical. Thats why i think microsoft is doing as well as its doing. , butis the big picture this is a Technology Company increasingly. If you look at what has been going on in the stock get so far this year, it has really been the nasdaq all the way, not the s p 500, not the dow. The dow is really a relic of what it once was. It was mostly industrial companies. Matt m i also think one of the coolest threads of your story is that microsoft is the secondbiggest company in the world. Saudi aramco is the biggest. But it is not just viruses that cause global disasters. More often, it is climate change. You make the point that the more disasters caused by the Biggest Companies, the narrower the spread between aramco and microsoft becomes. Matthew w absolutely. What is stunning is that aramco, which is not really freely traded yet because it was an ipo in december, has actually shrunk as a company 13 , which is saying a lot because it came in just under 2 trillion as an ipo. It all of this period where is shrinking, microsoft is gaining. Perhaps a better contrast is tesla, which is the clean company, and tesla is up more than 90 this year. And what is tesla all about . Everything online, zero emissions. Car companies are scrambling to borrow a page from tesla because people dont want to be together too much. They are going to have to buy , so this remotely engaged economy that microsoft has really created more than any other, because macro soft goes all the way back not just the past two decades, but further, is very much in opposition to aramco, which is the old world, the fossil fuel world. Vonnie and of course, microsoft managed to do this even through changes of leadership and so on. The other broader point is that micro soft is doing this, and it may not be as obvious now as it would be at other times because the whole stock market is rising in defiance of what is actually happening with the real economy. Youhew w yes, although if look carefully, it has really been the nasdaq more than any other index that is pointing the direction of the stock market. There are a lot of Industries Still troubled, and will likely remain troubled because Economic Growth globally is going to be weak, even if there is a rebound of sorts. Companiese Technology Actually are in a better position because everyone is dependent on using computerized information, if you will. Everyone. And that is not going to go away. We are doing it right now, having this wonderful conversation, and we are doing it remotely, and we are doing it because the technology is there to enable us to do so. Matt m it is great to have you on. Matt winkler, bloomberg editorinchief emeritus, thank you for joining us. Fantastic story on the bloomberg terminal. Coming up, the race to cut costs at renault intensifies. The carmaker is slashing around 14,600 jobs in a bid to outrun the automotive downturn. My exclusive interview with the ceo is next. This is bloomberg. Matt m some breaking news first off from the banking industry. Me,ie quinn in new york, matt miller in berlin. Socgens top governance body has pushed for a Strategic Review of the banks business is after it sustained heavy losses in its once vaunted Equities Trading unit. The move reflects the boards dissatisfaction with recent troubles in the equity division. No one likes to lose money, or at least not make as much as anybody else. That is at the heart of the banks surprise First Quarter loss. ,hose equity trading losses according to those familiar. That is why stockton is starting a strategy review, and you know what that means. There could be sales or reductions. It may cuts back it may cut back complex equity reductions. There is some news we will continue to follow for you out of the french banking industry. In the car making industry, renault is cutting 14,600 jobs worldwide, about 8 of its workforce. Capacity in aower overturn the losses that have rocked the industry. I spoke to the ceo ever know. The ceo of renault. I think it could have taken a little earlier, but i think we took at the right time. It only shows that it is even more urgent than what we could have thought. But we are in time. Matt do you think posing plants now do you have to close them now . Is waiting until the end of the year too late . Where not going to close any plans right away. What we are doing is reviewing what needs to be done in order to reduce the capacity. But we are taking the time. If the outcome of the discussion with the social partners, the local authority, concludes with the same ideas we have on the regrouping of some plants in the change of a matter of some others, we will take the time. It will be in plummeted between 2022 it will be implemented between 2022 and 2024 for some of those. So we have plenty of time, but we want the discussion to happen now in order for the people working at this plant to have the time to be retrained, to move if they need to in order to join another site, etc. But we need to engage the discussion now if we want to make sure that at the end of the day, we will achieve our goal in reducing by 2 billion our cost, which is an absolute necessity. By reducing the number of plants that would a simple parts, we would increase the competitiveness of the remaining lands, especially in france, and be able to attract additional volume from other partners like nissan. But it is absolutely necessary that we engage in discussion now, even though it will be implement it at the end of the current cars used at this plant. Vonnie when you think about matt when you think about current partners, do you ever think you need another european partner . For instance, would it be easier to work with a dimer then another work with a dimer then another a daimler than another asian partner . Clotilde the First Priority is to make sure we excuse the plan that we have with nissan and mitsubishi. Me, is already a partner. We are already doing cars together. For me, daimler is already a partner. Looking beyond this is another wery, and clearly, i think should first try to make sure that the excuse we have in mind both for renault itself on this Cost Reduction plan, and for the new alliance we are working, is indeed delivering before welcoming additional partners. Matt how much money can you save across shared processes like sharing research and development on autonomous driving, shared research and develop, and even battery production in electric cars . Can you save a lot of money that way . Clotilde we dont give global numbers because we still need to implement, but we can give you an example. If i look at the development of a previous generation of cars versus what we want to do, making sure the common platform stays calm until the end, making , andlower the producing at the same plants, our simpsons we could save up to 40 of develop and costs. That is huge. The example we have in mind, it could even be up to 2 billion of cost savings for the company. ,hat is an extreme example where we have been very bad in the past and would be extremely good in the future. Yourtheless, it would give a good deal of money on the table if we act correctly as we have decided within the alliance. So in message of hope there, or at least a plane to turn things around and prevent further losses, from clotilde delbos, the acting ceo of renault. It was a horrible day for automaker job losses. At 15,000, another cutting 15,000, bmw cutting 5000. Europe,er, just in 35,000 job cuts announced in the auto industry. Vonnie it is really phenomenal. That is one of the reasons why we saw president macron come out and offer to the industries to try and save some of those, at least in france, but really a tragic paper job losses. It wasnt so tragic for one Hedge Fund Manager out there. We are getting worried that alan howard has done it again. His hedge fund soared 100 this year. Macrotegy strategy, of course. That is the main fund. The money had pulled from 40 billion all the way down to 8 billion. It was one of the interesting hedge fund stories we were following, how size matters and maybe makes it more difficult to make money. Brevan howard made a comeback in this year has returned so far 100 . We want to hear from all of those other Hedge Fund Managers out there who have returned more than alan howard this year. Still ahead, new challenges for investors as economies reopen. We will discuss in an exclusive conversation with henry mcvey, kkr head of global macro and Asset Allocation. This is bloomberg. Erik welcome to bloomberg markets. Im Erik Schatzker new york. Mcvey is head of global Asset Allocation at kkr. He is with us for massachusetts. A lot of people have divided the pandemic into phases or stages. Mike corbat, ceo of citigroup, because the current phase stabilization. You call it phase two. What does it mean . Henry thanks for having me. What we at kkr have been think about is phase one was kind of where you had no fiscal and no monetary, and you could buy really high quality credit at very high prices. That was mark into what we saw in 2008. Phase two will probably be a 12 to 18 months period where you have corporate deleveraging, and the Second Action Item is we think youre going to start to see some real acceleration of trends where you can get behind those trends, and you really need to think about 2022 or 2023 earnings. So we can spend some time on it, but theres some really important themes emerging. Beyond the pandemic human component that we are sensitive to as an Inflection Point for investors. So theres some real themes that have emerged. You and i have talked about already, even before the pendant, that 100 of corporate profits in the last decade had come from technology. That has probably accelerated, and there are several more we are investing behind. Erik i am going to interrupt you for a moment to say that before we get to the themes, i would like to stick to some broader macro for the moment. Right now, we are showing our viewers a chart of the leading indicators. As you know, this chart looks absolutely horrific. People might be inclined to jump to some conclusions on the basis of that chart. Lust, is the macro outlook improving or still deteriorating . Henry it is improving. We operate in over 25 offices ,lobally, and data is improving led most by china. Ultimately, i think it is important for investors to know markets are discounting mechanism. They are looking towards that improvement. You have seen that in terms of some of the earnings revisions serving to turn up, consumption start to improve. That is all good news, and ultimately we are looking for more than 10 million americans to come back to work by the end of the year. The bad news, unfortunately, is that the rate of change will start to slow, and we are probably going to be in a fairly Slower Growth environment, so there will be some destruction of demand that doesnt return. Markets,ight now, the what we think the markets are saying on the credit side, they are discounting about a 9 default rate, and we think it will probably be around eight. Has come in a lot since when the market was discounting about a 14 default rate. On equities, what the market seems to be saying is that the multiples should be back to precoronavirus levels, and that in terms of demand destruction, we are only going to lose about 5 of total demand. We think the number is probably closer to 10 . So i think equities are right to rally on the fiscal stimulus. They have been right to rally on the monetary stimulus. I think from here, we probably appreciate a much more measured ise, and we have to, what going to be most important is getting the trends and the themes right because there are going to be some businesses that were overleveraged and have bad Business Models that dont work. There are going to be Good Companies with add Business Models that firms like kkr help to repair, and then there will be some that dont need any capital. This is an accelerant what they were already doing well. Are askinge themselves, can central banks, the fed chief among them, put a floor under the market indefinitely . Which is to say every time investors throw a tantrum, theres more stimulus coming, more liquidity coming. Or in your mind, is there a limit . If there is a limit, where is it and when is it, as best you can guess . Henry i think there is a limit. Near term, we are seeing a shock and awe campaign. When you add up stimulus in europe and the u. S. , it is somewhere between 35 and 45 of gdp, which are extraordinary numbers. Theres nothing like that we have seen. What will change Investor Sentiment around that is a couple of things. One is that money is not free, even though we have really low rates. Someately, there will be taxequivalent or Slower Growth because of the higher debt levels. That will affect the rate of growth in terms of how personal incomes grow. That is probably the phase we are going to enter in 2021. The other thing you and i have talked about, there is some Tipping Point on debt levels for governments. Our work shows it is about 150 of gdp, and we are getting closer to those levels. I dont think we are going to see the bond vigilantes today because the bond vigilantes are being overrun by the central banks, but ultimately, that liquidity spigot will probably turn off by 2021. I think our view at kkr is that the treasury, the ecb, and the fed have done an extra ordinary job. You look at todays data that came out of bloomberg, what you guys show . You showed that personal income actually grew 11 sent. That is an incredible number, and that is all the c. A. R. E. S. Act. Investment was 6 . At the same time, actual spending was down 11 . , of theof the stimulus income that came into simmers in america was from the government. Into consumers in america was from the government. So it has been an extraordinary buffer. I dont think, to your point, that you can continue that. I think that is why youre seeing a bit of a pivot in d. C. And other areas to open up the economy, even though you are not seeing the rate of new cases decline the way some would want. Ultimately, if you look at china, peak to trough cases took about three weeks, and right now, the u. S. Is multiple weeks into it, and the data still suggest another three to four weeks to come down. Erik lets quickly talk somatically. You are bullish on credit. Kick er just raised a fund for dislocation opportunities. Not everybody has that luxury. For the mere mortals that have to invest in public markets, with high yield not far behind, where do you pick spots . Henry you pick your spots in high yield. The second thing is just get the themes right. The lesson from 2008 is that you need to understand what businesses are going to accelerate from here. Theres a lot of value right now in the russell 2000, that the s p and the nasdaq have moved up, so this has become an active managers market. That is what we are doing in our dislocation fund. Im also very constructive on infrastructure. Globally, you are going to see is be very aggressive on that. I also think for those on the institutional side, theres will value on the private equity side , particularly outside the u. S. , where the indexes are really dragged down by the banks. You see that in europe right now, with the european stocks only back to the levels in 1999 when the euro was formed. So theres real value from active management and on the private side. Erik terrific perspective. Henry, thanks as always. Henry mcvey is a partner and head of global Asset Allocation at kkr. Vonnie wonderful interview. Thank you. We will be digesting it throughout the afternoon. Coming up at the top of the hour, we are going to bring you Live Commentary from fed chairman Jerome Powell. He will be in conversation with alan blinder. This is bloomberg. Vonnie live from new york, im vonnie quinn, along with matt miller in berlin. We are counting you down to the european close on bloomberg markets. In the u. S. , we had seen stocks lower. The s p 500 dragged down by some retailers, some energy companies. Down 0. 6 now. The nasdaq is the best performer of the day, but it is still down just more than 0. 1 . As you can see, no respite for the offshore yuan. It did strengthen just a little but having gone above 7. 19, we are at 7. 1640. The dollar index at 96. 20. Gold futures are actually picking up steam today. I guess it is a friday as well, and we are heading into what should be a normal time what should be in normal times the summer. We are pretty much done with may at this point. Matt