Caroline lets take account to City Private Bank chief economist, stephen whiting. How are you looking across assets at the moment in terms of where you allocate . Not only stocks falling but bonds falling on the same day. Optimism that perhaps yields have fallen too far, too fast. Well, we are a bit underweight global fist income global fixed income. A think this will still be volatile environment. No substitute except for u. S. Hedges,es, some literal not terribly well in the full economic recovery we expect. Underweight fixed income portfolio. There is really no substitute for the safe haven assets. The strategic return estimates have come down. Fortunately, u. S. Yields, when you look at missable bonds coastal eddy good premium to municipal bonds, still at a good premium to the world. They were already priced for crisis. With those, we want to really take them out of portfolios because of valuation issues. Romaine i was looking through your midyear outlook. Because, interesting am wondering, when you talk about the recovery globally and the general idea that it will be a little bit uneven, Certain Companies will recover a little faster than others. I wonder how that affects your Investment Outlook and how you allocate in the short run with an eye on the next 5, 10 years. That is important about this is figuring out what is discounted or not discounted relative to those forecasts. Expect latin america would be hit later than north america by covid, and later than china . Gete we have seen covid impact early, we have seen greater recovery. The asset prices were more depressed in europe, africa. Despite having a very poor immediate outlook, we think they discounted too much of an economic collapse. Europe, shared international tourism. It is a little bit harder to bounce back and have people cross borders with covid immediately. We think that is a reason for Southern Europe again, they have a deeper decline this year. The fact that the u. S. Is leading in the fiscal stimulus, letter member, more and more, we will look to 2021. Up,e economies that catch further out, eventually we want and to be in our allocation account for where we are going next. Caroline City Private Bank chief economist, steven wieting. Next,d you miss . Is up where we will be speaking with the creative director of the luxury womens brand. This is bloomberg. Caroline from bloomberg World Headquarters in new york, i am caroline hyde. Romaine this is whatd you miss . Caroline the markets close lower. The dow jones eking out some gains. As new music. 3 changes a little bit even as stimulus picks up. As eagerairlines falls travelers return to the skies from shelterinplace orders. Protests continue, but what can policymakers and Business Leaders do to promote true diversity and inclusion . Zahidi andith saadia carly cushnie. Docusign has been a winner of the endemic because of course well need to be able to sign documents from our home. First quarter loss per share of . 26, but billings are ramping up. Second quarter revenue was a key beat. Clearly, this company on a tear. Resorts fiscal earnings for the quarter, three at 3. 6 but,ng in and net revenue also coming in above estimates. Shares up slightly after hours. Lets get back to what is going on in the world. Specifically with geopolitics, the recession, and everything else. Theeconomic director at World Economic forum, saadia zahidi, i am happy to say she is joining us now. I want to start before we get to some of the more current issues, i want to start with the Economic Issues that sort of grew out of the covid19 shutdown, and this idea of an economic recovery, and whether or not that economic recovery will be the tide that lifts all boats. The measures that you have seen so far worldwide, is that going to ensure that everyone who was hurt by this crisis will benefit on the upswing . Saadia thank you, thanks for having me. It has become very clear that we are looking at a very prolonged recession. Some of the earlier hopes foray quick recovery, that really may not come true. I think the point you are making is a very pertinent one. The support that is being given, while the measures are welcomed, the size and magnitude of the support given to fiscal policy, monetary policy, that is important for this recovery, but unless it is channeled through to all of the most affected people, we will not have a tide that lifts all boats. ,hat specifically impact women impacts people of different racial minorities, it specifically impacts lgbti folks, it impacts physically disabled. We have to take into account diversity inclusion, and take into account that those who already belong to the lowest income brackets are also the people who are most affected by the fallout of the pandemic. Taylor women owned businesses come out quickly do we need to that rebound to make sure some of those job losses are not permanent . Saadia i think there are a couple of elements here. Largeularly, the multinational businesses who can drive some changes and set sort of an example in their industry. So there is that piece, even as they are having to conduct furloughs, even as they are having to think more tentatively about hiring and as they are thinking about where their future growth comes from, they need to take into account some of the diversity and inclusion related issues. The second element, we had already been seeing over the past 10 years or so the dismantling of some of the social safety nets necessary for dismantlingand that not only has to be unraveled, not only do we have to invest much more in those social safety nets, but they need to become more precise. Governments need to much more proactively think about the social mobility they can create across populations. 60 ofunited states, those that grow up in the bottom sixth income bottom fifth income quintile belong to a racial minority. If you look at those who have social mobility, the number of those who belong to racial minorities who go for the bottom quintile to the top quintile is tout 1 5 of those who belong racial minorities. Youre basically looking at a system that is lopsided to begin with and promotes intergenerational and intragenerational lopsided this across society. Caroline can you talk about a country, an area, that has managed to aid social mobility and other areas of the world can follow as they perhaps look at restructuring the way that policymaking has worked . I think that countries that come out near the top are almost always the nordic economies. You dont always see the same makeup of the society in terms of diversity of race, diversity youncome, etc. , but definitely see the best policies being put in place to create a society where there is more mobility, where there is a basic social protection floor, where someone loses their job is still provided with enough support to upscale themselves and move on to the next learning opportunity. I think creating that floor for opportunity is very much in the nordic economies. Interestingly, they also come out near the top in terms of competitiveness. They also happen to be those countries that maximize product video. This does not have to be a tradeoff. It is possible to be a just society while at the same time being] he can being an economically competitive one. Caroline thank you. Lets have a quick look at earnings. Slack withdrawing 2021 guidance. The a business that fullyear adjusted loss per . 19. Will be . 17 to the Second Quarter has been a beat overall for select technologies because people are working from home up by 13 . Just over 200 million, that was a beat. Romaine lets get back to what is happening here around the country with those protests. A little earlier today, sonali bostic spoke with galaxy digital. He has been talking a lot about inequality and what he and others like them can do. A white businessman, his job is to be in support. It is to listen, to have to help,to ask where he can to bear witness. Cantk, more broadly, we just change the black community. We have to change the white community. While the black community, they need to lead in this, i think it is very important that the Business Community is right there. Reformrt of the alliance. I always tell people, robert kraft is one of our agreement alliances with just reform. When he talks, people go, he owns football teams. He is converting people over that might not see the world the same way as a liberal new yorker sees the world. Ofhink you need an Army Criminal justice reformers who say, wake up, watch the video. I was kidding around with a friend today, i have been arrested twice, drinking, having fun my whole life, and not once have i felt threatened by a police officer. Lets hold onto that for a second because i do want to get to criminal justice reform. But i do also want to talk about systemic racism on wall street and how much wall street can be doing more to create equality in this industry. You built galaxy, about 60some people now. You told my colleague that there are two black people who work for you now. You had a chance to build galaxy from the ground up, very well established come along histories, also very few black people at these firms. Why is that and how does that change Going Forward . Change is tough. We looked at ourselves. We had a few more africanamerican blacks and they left for different reasons. , we have gotp team to do better. We will get a black member of our board soon. I made the mistake of thinking, weary startup company, it is hard in a startup industry where there are not a lot of black resumes and you are going as fast as you can. I almost gave myself the excuse of we will get there. That is a mistake. It is hard. There are not a lot of black resumes. You have to look a little harder and look in places you are not used to looking. We are going to try harder. Are there people you are working with in the community that are helping you address this issue . What kind of support are you getting in terms of finding change . We have a Philanthropy Group called galaxy gives that three years ago really committed our resources to criminal justice reform. On the floor right below galaxy digital, we spent all day, lots of money and effort listening to local estimate local activists. We have a program called galaxy gives where we have mentorships and grants, six small ngos run by formerly incarcerated men and women who are working on issues in the criminal justice system. Had one floor of our company, one floor of my universe, that was completely engaged in this. But the company right upstairs, we were less integrated. Of resources. I know lots of people that would be good for members good board members. The employees is harder. Caroline michael nova grants, founder, chairman of galaxy investment partners. This is bloomberg. Caroline lets return to our conversation about americas latest crisis over racism, police brutality. We turn to one of the most important black voices in the fashion industry, she has beyonce,ichelle obama, and her luxury label is available to the masses in a new line from new target. Carly cushnie. Talk to me about how it finally feels the silence on race is no longer an option. Companies and businesses have been speaking out. What is your message that you have been trying to carry for years now, is it resonating . We are hearing talking of the talk, how can these companies now walk the walk . It is important for companies to focus on communication right now, whether it is speaking on their platforms, it is trying to speak up and beyond that, take action. This is not just a moment in time, not just a post on social media, it is really a time to make change happen. Caroline what about what you have experienced, a black entrepreneur building a business, you come from the u. K. But you build your family and business in the united states. What learnings have you have, what experiences have held you back, and what policies have made it easier to raise capital and build a successful business . There have been so many challenges. When i was trying to raise money for my company, it was very difficult for investors to take me seriously as a woman of color, a woman in general, a woman of color who was both a creative and the Business Leader behind my company. That mentality really needs to change. Romaine how do you sort of address that . You obviously have your own company. When you look at some of the big sort of Fashion Companies out there, some of them do have creative directors that are people of color, but a lot them have either resisted that or at least not publicly embraced it. What is the message you give to them to say, go down this road . Carly it is time for change right now. They need to be hiring black people at the executive level so that change can really trickle down. Companies should be establishing education programs, scholarship opportunities, internships specifically for black people so that black people can get the support, the knowledge that they need to enter into these industries, these different fields. In the fashion industry in particular, i am on the board of the council of fashion designers of america, and we are taking a first step in creating a program, an Employment Program that is about placing black people in all different sectors of the fashion industry to really try and make this industry much more racially balanced, more than it has been. Caroline so it is about seeing people at the top, being able to look at those who they can emulate. Like when you are first entering the fashion industry, i am sure there were few. What about brands collaborating with you . Collaborating with target, a huge brand. How much can we see these larger corporations partner with blackowned, black run businesses to ensure that this is indeed change for the long haul . Carly absolutely. It cant be a moment in time. These big banks, investors, they need to have black people making the decisions at the executive level as well. Target haship with been amazing for my business. It has been in the works for over a year now and it is finally about to launch. But it has really given my brand the opportunity to get this broad exposure. I would really like to see more corporations doing things like this. Really uplifting people of color. Romaine it is so great to get your voice here on bloomberg tv. I think a lot of folks should be aware of what you have to say and what you are selling. Carly cushnie, creator and ceo of the fashion brand cushnie. This is bloomberg. Caroline we are going to take you to some breaking headlines. Romain, you have been looking at broadcom. Didine broadcom results cross the wire just a moment ago. Q2 adjusted eps pretty much in line, 5. 14 per share. Tousted net revenue at 5. 6 5. 9. That is a range. The analyst estimates falls within that range. Same thing on the revenue side. Shares down 1. 5 . I think we also got gapper earnings crossing the wire. Up 2. 51,s per share, versus eps estimate of . 61. Not providing any sort of sales and earnings outlook. 15. 9 in afterhours trading, pulling the 2021 guidance for calculated billings for the quarter. This is a stock that was up about 124 . Expectations were high. Also getting some other breaking, what could be a big deal for oil. We were getting holdouts on production cuts that were looking to be extended. Opecplus says they do have a tentative deal with iraq and saying they are meeting over the weekend. There id been some talks that they had broken the compliance for those production cuts. Aec saying they have tentative deal on better quota compliance. I want to switch gears and go back to some of the conversations we have been having about the protests and some of the data behind those numbers. I want to look at a chart here showing the economics behind the numbers. Of cost in nominal terms fully funding has jumped. But it has stayed relatively stable in Police Funding as a percentage of state and local budgets. Only about 3. 7 of budgets have been spent on this since the 1970s. The steady amount of funding as a percent of total budgets is interesting because crime is fallen significantly during that time. And tog us this story talk about all of this is bloombergs holly moses. What does your Research Tell Us about why somebody why some people think that budgets for some Police Officers have remained too high even though as a percent of total budgets, it has remained unchanged in the past few decades . The sheerrs people is number when you hear it, 114 billion as of 2017, the most recent year for which we have data through the u. S. Census bureau. If we compare that to some other large agencies at the federal level, it is infinitely larger than those agencies. I think that is part of what really jars folks, how spending has really risen since the 1970s to this number now that is so large and notable. Jars peopleing that about it is that Violent Crime and property crime has fallen over that time. You see crime going down. Caroline i love how some of these bloomberg stories really bring the data and the numbers to the fore. Your take on what protesters are seeking in terms of changes in the way money is spent, policing is funded, to help basically compass toe the ensure that they are all aligned in the right direction. What we are seeing right now, a lot of activists are calling for the defund the police movement. They are basically seeking not just to stop the funding but actually redirect and. Rather than have some of this money going to the police budget, they are wanting to see us go into alternative budgets such as the department of education, department of health, other public works programs. They would just like the money to be spent on Different Community measures that these activists believe will also help to reduce crime. Romaine when you take this data and you lay out the correlations, when you hear from Law Enforcement and Justice Department agencies, what is the response to this type of putback type of pushback . I think the response has been that there are a few bad apples that should not define the department and not define their budgets. They are also saying that there is a reason that crime is down, that spending has gone up. There is a concern among some people that if you cut spending, you could see increase in crime. I think some people in the industry could want to see some reforms made, they just dont necessarily want it to come at the expense of their budget. Romaine you can check out polys story on the bloomberg terminal. What piggybacking off of pauly was talking about, congressional are preparing a sweeping package of police reforms. Pressure has been building on the federal government to respond to the death of george floyd and others who have died in Law Enforcement actions. House Speaker Nancy Pelosi says that legislation may be unveiled on monday. She says the measure would include an attempt to correct, racial profiling among other issues. New york city may be able to reopen Outdoor Dining next month. Mayor bill de blasio is preparing for the start of phase one. He says he anticipates reaching phase two in july. De blasio said today that restaurants are a key part of new york citys economy. China will ease its ban on Foreign Airlines next week. The coronavirus pandemic prompted flight cuts earlier this year. President trump called on its top political aides and campaign advisors. They were at the white house today. Bloomberg has learned that the meeting was expected to be tense as the presidencies is political standing as eroding in a number of key battleground states. Polls show joe biden up by 11 Percentage Points nationally, and a new Quinnipiac University poll shows the race essentially tied in texas, a reliably republican state that mr. Trump cannot afford to lose. 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 a mark crumpton. This is bloomberg. We see a gradual recovery of the oil markets for three reasons. Largely better than in the previous months. Demand recovery. Two, opecplus agreements, electric tent, compliance. Number three, not much talked about but very important, steep and other u. S. Countries where the markets are run by the private companies. Dont see demand recovery continues. If we do not see open plus agreements fully complied, this may well be a shower on the current gradual recovery of oil markets. Three factors need to continue in the next few weeks and months if we want to see a recovery of global oil markets. Going into this meeting, it seems like saudi arabia and russia are acting on the same side and they really want to clamp down on the cheaters, the iraq, cheaters, kazakhstan. Is it possible for countries like iraq and nigeria to really start to cut production and not to cheat . I cannot again say they should do this or that. But not all producers are in the same category. Some of the producers have much stronger reserves. And political stability. Andrs are politically economically much more fragile. Mentioned iraq. A new government, deal just tounties give you a Number Company 80 of the iraq government budget comes from oil revenues. At the current price levels, they are only able to pay half of the salaries of government employees. Leave aside money for health services, education, and others. Therefore, those countries, iraq , nigeria, angola, algeria. Algeria is hit twice, one because of the low oil prices. Another because the index. Different countries with different challenges in front of them. And nigeria are at the top of the more Vulnerable Countries category. Iealine fatih birol, executive director, speaking earlier. Now, the coronavirus pandemic, the nationwide downturn, the nationwide protests that have forced many Venture Capital investors to hunker down in the past few weeks. Despite all of that, our next guest has launched a new firm and is seeking 200 million for a debut fund. Wonderful to have you with us. In how yousted differ from the larger Venture Capital firm. What is it that you want to provide . Thank you for having me. It is good to be here. I am excited by the organizing in Growth Equities and tactical opportunities. We will primarily target longterm investment for companies build both for sustainable and aggressive scale but also capitalize on evaluations that we believe are too high or not high enough. Also focusing on distribution linked innovation has a unique sector opportunity. This is an area that cuts across a number of impactful industries and forms part of the distribution chain that facilitates communication and ultimately connection. But the underlying opportunity about, toe excited dramatically maximize venture economics. Talking you started about this idea of going after companies where the evaluation might be too high. I am wondering how you pull that off, assuming the company is not public. How do you pull that off when options andut things like that that you would use for he publicly traded company . The opportunity for arbitrage exists when fundamentals correlate. What i have seen is that this correlation factor varies widely across the spectrum of opportunities. What this means is that not all value can be created equal. Possesspanies will shorterterm, less stable, or more ephemeral value. It is hard to distinguish among different types of value. Goes, it your question is precisely the question i spent quite a bit of time andking on, focusing on, started understanding. I can offer a few insights. The first is that the strategies will differ depending on the timing of when we are engaging in this opportunity. The key question, are we in a position to anticipate this or are we meeting it head on . The second is that there are unique constructs that capital has to concede. I am excited about the opportunity of creating this and other types of exposure for the benefits of the overall portfolio. Finally, these constructs involve counterparties including firms that can create a market in a space. Caroline in laymans terms, basically you are looking in a private secondary market of privately Held Companies that you are able to buy instantly sell of able to buy and the stock of. I amat is not what directly referring to. Thatoint of stress here is traditional venture is among only strategy. It is quite constrained from managing the challenges presented in longterm investing. But it also simultaneously misses the boat and the opportunity to capture shortterm optionality. Important incredibly to stress because we have seen quite a bit of inefficiency in the market. That means that you can find yourself on the losing end of either bad. The shortterm optionality i am speaking of refers to the optionality of acting on these pricings and distortions that arrive in imperfect markets. Why havent more funds destructed disrupted this already . Market hascause the been so limited in terms of its ability to respond to these situations. We continue to see environments of distortions exist. The primary level of optionality i have seen has been firms to invest directly in companies to procure what basically amounts to a bundle of call options. But i think there is an opportunity to design a much more advanced payoff structure. That could dynamically replicate the purchase of stocks. Caroline keep us abreast of how it goes, how the fundraising continues, and how you are focused in particular on the disruption of distribution. Thank you. Coming, Airline Stocks increase thrust. And we will be going to know going to none other than joe weisenthal. This is bloomberg. A few earnings crossing the wire. Slack shares down. Expectations were incredibly high going into earnings. The made headline here is that slack is withdrawing its annual link forecast, citing business uncertainty. That seems to be the thing that triggered the selloff. Metrics for the First Quarter were relatively online. It provide a adjusted loss per share estimate actually a little bit better than feared. But, again, withdrawing any fullyear guidance, and that appears to be the catalyst for going lower. Caroline pretty lackluster forecasting. Foring about weak demand smartphones overshadowing basically the rising orders from data center owners. 5. 75recast will be billion. The average assessment had been more than that. In afterhourswn trading. Reporting a loss per share. Anycompany also removing sort of guidance Going Forward for the year. We should point out that net sales at all of the companys main brands did fall in the quarter. Time for our favorite segment of the day, not because we are joined by joe weisenthal, but because it is almost time for us to go home. Joe, what have you been watching . Joe i was pretty struck today, as were many people, by the performance and the airlines. Particularly american airlines. The stock was up 41 today, company indicating it was expanding its capacity in july due to better than expected things. This is so crucial. This really affected everything. So much rides on the degree to which normalcy does return. Granted, the stock is still down a lot from where it was in february, but if people are returning to the air faster than anyone thought even a few weeks ago, that affects a lot of things. Even crazier than the american hertz, a company that declared bankruptcy come up 77 . Everything related to returning to normal and traveling having a huge day. Amazing because these companies are apparently going to expose themselves to u. S. Consumers who are hungry to get back on an airplane. I have recently flown on an airplane. It is impossible to social distance. Therefore, you do have to isolate afterwards. How do you think the unraveling will go . How do you think the unraveling the longerterm is for travel, and people in new york who have a different relationship to coronavirus because it has been so hardhit, compared to places like where you are in texas where demand is quite different. Joe it is a great question, and i do think it remains to be seen overall whether there is a return to normal or whether a lot of these services will plateau at a sub par level. Another thing that is crazy, the casino stocks having a really big day. All of these images of las vegas a. M. Os packed at like 2 00 you cant social distance around a blackjack or poker table. We are seeing all of these people return to normal and say, i want to play some cards. I dont know about everyone but there are certainly pickpockets of the public who are just ready to take the risk and get back to normal life. Romaine they opened their doors right at 12 01 a. M. They were doing temperature checks, causing people to wear masks, we had some casinos trying to put a partition between certain chairs and things. That is not enough to get you into the casino . Joe i think i am willing to chance it. Like the week before the shutdown in new york, i had a trip to vegas plant and i had to cancel it. I am thinking maybe october. Caroline it is all about online poker now. Joe that is true. But i miss the smoke and the drinks and all that stuff. Seeing those photos really got me going. Romaine diamond joe weisenthal. Caroline joe, we wish we could have you back with us but it is a joy to have you across in texas. Technology is next. Romaine this is bloomberg. Welcome to bloomberg technology. Im emily chang. Emily the unarmed black man who died at the hands of police that sparked nationwide protests. Protests are going on for the ninth day. The latest being peaceful. Some cities along with my own washington, d. C. , and l. A. Are lifting curfews and we are