Corporate taxes will rise in the united states. That is the possibility, they will not rise as profoundly as they drop. I think it is not clear whether we can make that case or not at this point. Romaine we are speaking with stephen whiting. Here is where we close on the day. Pretty much a risk on day with all of the major indices, including the russell, getting in on the action. Caroline nasdaq up 2. 2 . You really can see where the commitment is within the sector. Volumes were lower. Just coming off the back of fourth of july. Indeed, about 10 for the dow jones in terms of trading. It is notable that we are seeing such outperformance from the nasdaq come up 16 year to date. Romaine we crossed back above some key technical levels. The 50 day moving average, it had actually been declining toward the middle of the end of last month. The s p 500tocks in that at one point today traded at or above the 52week highs. Most of those are actually record highs. You definitely have some enthusiasm. But some of the names are the names that dont necessarily scream bullishness before they scream maybe a little safety. You jump into amazon, microsoft, apple, these type of names that we typically think about as growth and momentum names. Caroline defensive perhaps when you are looking at the benchmarks in the u. S. Is it defensive to be going into the emerging markets now or is it too much of an opportunity . Best day since april 7. Highest since february 21. The dollar has been lower. But what do you make of the desire to get into the emerging markets . Think emerging markets are a relatively beatendown opportunity but we have to be specific within it. The bestperforming large stockmarket of the year is china. It has been relatively defensive in this covid collapse. The nature of their industries. The early timing of the covid impact. Their treatment and generally north east asias response has protected those economies. Latin america has been off as much as 50 this year. In one way, we are sticking with our longterm optimism about asia, knowing that it has picked up a lot. But after the collapse we had into april, we have taken a position in latin america. Latin americauy when it is off 50 , you can never buy it. As we have seen, region by region that gets impacted by covid, it eventually does pass. The bounceback potential in that region is quite high. Caroline great day to be finishing a conversation on asia. Seemed to have fueled the desire to get into equities. City private bank Global Investment strategist steven wie ting, thank you. That does it for the closing bell. Whatd you miss . Is next where we will speak about how businesses around the world conduct safety and quality with the virus. This is bloomberg. Caroline from bloombergs will headquarters in new york, i am Caroline Hyde. What you missed is yet another record high for the nasdaq. Risk on mood following from china to europe to the u. S. S p 500 up almost 50 points. Signed, sealed, and food delivered. Postmates in a bid to expand its food Delivery Business. Covid19 spread rates jump the highest in weeks. New york into phase three. People around the world still left wondering, how will i get back to work . All that and so much more coming up but now, we are focused in the Global Equity market that started the weakening strong, optimistic mood. Chinas security times said it is no more important to the economy than ever. We are joined by tom orlik, who knows all too wealthy desire for retail money to get in. Thehis the state 80 feeding feeding frenzy when it comes to stocks . China went into the covid19 crisis first. It has also come out of it first, and come out of it looking healthier than most other major economies. There is a lot of stimulus coming into the economy as well. Stimulus often finds its way into higher asset prices. At the same time, i think the important thing to keep in mind is that the use of the state 80 is kind of a blunt instrument. They can say we want a healthy bull market, but if they are saying that in such a public way , you had Better Believe there unhealthyo be an moving prices. Chinas policy, makers, they can make the market go up, but if it decides to come down, do they have resources to manage that as well . Romaine in the context of whether this is the bubble that the times for china are different. There seems to be a little bit or incentive now for countries to sort of goose their market the best that they can to their ability. You have china sort of putting out this editorial or whatever you want to call it, and its sort of provides a sense that they be day need this market to go up, they are willing to let togo up and they are willing deal with the consequences down the road. Is astrong stock market positive for china as it would be in any country. It boosts confidence for households, makes it cheaper for businesses to raise funds. Potentially it creates a path to securitizing some of the massive debt chinese corporations have as well. At the same time, ultimately, there has to be a relationship between the earnings of businesses which are listed and the value of stocks. Really sustainable to have a long bull run at the same time you have trade conflict, slow recovery from the pandemic hitting corporate earnings. I think that is a question chinese investors and policymakers will have to wrestle with. Caroline are they thinking back to 2015 or are they thinking that leverage is under control . Is the same group of people in charge. This is an experienced team. They saw what went wrong in 2015. I am sure they will be alive to those risks. There are a bunch of micro interventions that china policymakers have. They can allow more or less leverage into the stock market. They can slow or accelerate the pace of ipos. There is a lot of different levers they can pull. With the market rocketing up so quickly in the last few days, i think there will be questions about what does beijing see as healthy, what can we infer from those micro moves . Romaine if you look at some of the moves made in years past which led to that astonishing growth, not only in the Financial Markets but in real estate, lending. Has that sort of, i guess for lack of a better word, baggage ever been cleaned up . 2017, 2018, china did something which i think is pretty remarkable. Before the bubble burst. Before the debt triggered a crisis, they said, the debt is building up too quickly. We need to put the brakes on. They had two or three years where debt levels stabilized and even started to come down a bit. We are not in 2008. They still have a lot of debt. Because they were conservative, because they took those early moves, fixing the roof while the sun shines, as Christine Lagarde once said, they now have more space now. That is why you are seeing credit growth picking back up again. Orlik, bloomberg economics. Thank you so much. New yorkcoming up, as begins a phase three reopening plan, many begin returning to work. This is bloomberg. Precovid, the u. S. Highyield 350et traded Something Like basis points over. The average highyield bond was 350 over. This had been going on up and down for the last several years. At that point, there was putty of capital being raised, that were called activation funds. The activation funds needed to be activated upon some event. That event was typically Something Like highyield going to 700 over or 750 over. At that moment in time, if highyield ever got to that, that would have to be an unbelievable opportunity to deploy capital and credit opportunistically. That is where it is today. The u. S. Highyield market today, depending on what index you want to use, is somewhere in the zone of 700 over. People are trading at the level that people said, i only hope it goes there so i can participate in this opportunism. Again, i think it is both. There is and continues to be a terrific possible moneymaking opportunity in credit. But it certainly will not look like the march 23 flows. One of the four businesses you are in, structured credit and clos, those thrived in the decade after the financial crisis. What is the future for them now . I think it will be similar. It may take a little while longer to get there. The exact shape of it is unclear. Thethat growth in largely clo market but really just credit creation. There was a large amount of credit creation and the decade after the financial crisis. When there is credit creation, there is the ability to get sliced and diced, owned, managed. February, manynd people were starting to sign the alarm about the amount of corporate leverage on balance sheets. And the amount of leverage in the bond markets. If we are going to have even more, are we not just inflating a bigger bubble to burst when the next downturn comes along . I think a little yes, a little no. What happened here to the economy was probably almost singularly unique in history. The economy was moving along and ran into a multimonth revenue whole. There are all kinds of ways to measure. You will hear people quote that phenomenon in a lot of different ways. Companies, consumers, the highend, the lowend, mall owners, lenders. Whatever it is, the world is not old for the zero revenue scenario. A certain amount of what happened was the government in a way doing its job. When something extraordinary happens, the government is the last line of defense. Whether it is the direct dollars or indirect dollars, as the government is filling a revenue whole that otherwise would have cascaded into an even worse outcome for everybody. Too much of a good thing can be risky, so there is talk of moral hazard, of whether the highyield bond buying part was necessary, and so on. But, big picture, there was a 10 children a 10 trillion hole in the economy. The government in part filled the hole, then did a variety of things to on glue that. Caroline another one of our exclusive front row interviews with the sculptor capital ceo. New york city officially kicked off phase three of its reopening today. Parlors,ns, tattoo restrictions in the u. S. Have lifted and in some cases reimposed restrictions. , founders, luke anear and ceo of safetyculture, who works with companies to conduct safety and quality inspections. What are you seeing . How are you looking at Companies Worldwide looking to ensure that safety is at the very heart of what they are doing right now . Ceos arends of the focused on trying to win customers back and build immunity to risk. We are seeing that safety is becoming a differentiator that will attract customers the same way that product quality has always done a core component of their Brand Reputation across all industries and a permanent agenda item the immunity to risk, it is no longer good enough to have Risk Management in place. You now need to make sure that every action of every team member is building immunity to this virus, this crisis. It is the biggest shift in operations we have seen since world war ii. Globally, there is a repurpose in order retraining of teams to be able to combat this virus. We used to see checklists only really in the bathrooms, you could see who cleaned the bathroom last. Now we understand that every worker is the front line of defense. We are seeing a lot of increased activity. Theine with regards to types of businesses, are you seeing some businesses maybe embrace this more quickly and more fully than others . Luke businesses that typically have high levels of compliance in place, like construction and mining, we have seen the safety levels about three times the activity. They are used to wearing protective equipment. Certainly, in hospitals. The number of checks happening much higher. A lot of those workers, this is new to them. They are learning how to deal with this in a very different way. Caroline im interested in the fact that you are currently set in australia. You are a Global Company with a big footprint. Which areas have we seen really being able to manage driving forward. We all look at new zealand. But they have a lot of wind in their sales in terms of the and island nation. Have they managed to get in place a reasonable and safe way for companies to unfold . Results arest coming from the countries where the states and local governments are coming together. Where they are operating independent of their neighbors, florida, for example, you are seeing flareups happened, even australia, there have been some issues in the past week or so. We are starting to see the localized outbreaks we are expecting. And tivoli levels can show us how they are responding to those outbreaks. It is somewhat controllable now in the sense that the lockdown is controlled by people. The states and areas that are able to get those edgers in place early are able to restrict the extent of those outbreaks. We would expect that would continue. Were certainly seeing the areas managing that early and on the front foot are the ones that are able to contain it. Romaine with regards to the companies that are making these to hireo they have additional workers or some sort of additional labor to do this, or, lets say a restaurant just takes their normal staff and have them do some of these safety procedures . Luke mostly, it is the existing staff. There is usually less customers in a Business Today because of social distancing. Staff that have been employed previously are able to adapt and take on a lot of the control measures we are seeing implemented. Retailers,igbox Online Ecommerce companies, fulfillment centers, customers managing those deployments, really utilizing the staff that they have got, in addition to new staff. 2002 2004,ember in when one of the early sars outbreaks occurred, alibaba really thrived because everyone was shopping from home. We have seen logistics and the Companies Ramping up and utilizing team members they have in place. Caroline there are certain Industry Groups that will forever be hurt or changed by this. You work for like emirates and british airways, the Airline Industry has been hit so hard. How are you seeing changes in the longterm being made to those industries . Will they in the longer term be able to keep such pandemics and check . In check . Luke it is manageable. It has become a way of life now. Our awareness of how this virus is transmitted has increased significantly. Locally, a lesson on how easily these viruses are transmitted. Theres obviously going to be other viruses in the future. By understanding how to reduce the transmission is the key focus for the ceos that i speak to. Others ared certainly able to reduce the exposure. Customers are seeing some of the new designs coming through from airline manufacturers, talking about the middle seat facing the opposite direction, having screens and things like that. We will see whether these things are required. Basic sanitation, hand cleaning, things like that can go a long way toward reducing transmission. Romaine really appreciate you getting up there. Luke anear, founder and ceo of safetyculture. We have got a tease. 2. 65 billion delivery. We will talk about ubers acquisition of postmates and how it will bring food Delivery Business to a new level. Caroline live pictures of a pretty hardcore storm going on. Apparently there is pingpong sized hail that could be wreaking havoc on the upper west side. That is your hood, right . Brooklyn, we can see. New york, be safe. Its pretty inspiring the way families redefined the word school this year. Its why, at xfinity, were committed to helping kids keep learning through the summer. And help College Students studying at home stay connected through our university program. Were providing affordable Internet Access to low income families through our internet essentials program. And this summer, xfinity is creating a Virtual Summer camp for kids at home all on xfinity x1. Were committed to helping all families stay connected. Learn more at xfinity. Com education. The reaction has been way beyond our expectation. We have a very much overloaded wish list of people wanting to come over and test the vehicle and have the experience. Our Operations Team is really working daytoday to handle other requests, having people come in and get them what they wish. Now, a safety driver is still required in these driverless cars. At what point do you think a safety driver would not be needed . A safety driver today is like the Guardian Angels of our driving system. Right now, we are at the point where we are starting to introduce passengers to our testing process. It is very important to withhold the safety standards. The steering wheel, and one is looking at the system to observe what the computer sees. Thisars competition in robotech see market. Idis technology apart from the rest of the pack . I think we have a lot of talent and great companies. They have made a lot of progress so far. I think essentially what it boils down is to two things. One is the ai capability. That really boils down to how much data has been gathered and how efficient we leverage those data. Two is how quickly can you build up a network of vehicles as well as passengers. , we have advantages on both. We have a really large fleet of vehicles. All of them are gathering road data and we are leveraging those data to really improve our algorithms. Have readilyd, we Available Network users. Once we have autonomous driving running, we can insert those vehicles into are already Available Networks so the passenger will not feel a thing. They will be able to transition into that experience with autonomous services. When you look at the industry overall, what is the big bottleneck to mass deployment . Is it that technology development, is it regulation . I think it is all. The reason this is a very difficult problem is that it is not a problem only for one party. I think it has to be a collaborative effort across the technology developers, the service providers, the hardware providers, as well as the regulatory body. We are trying to move this in the same direction together and hopefully we will be able to solve them around the same time so that it is in parallel rather than in serial. Rmd center ind an Silicon Valley for years. I think it is not really a competition for autonomous driving. This is very advanced technology, trying to solve the problems of efficiency and safety for passenger transportation. I dont think anybody should compete on safety. It is a problem we are trying to improve. There observing come over covid19 in recent times, that some of our u. S. Counterparts, have plans,they changing the org structure, leaving some of the talents outside. I think for us, we believe that this is a problem that is very difficult. We need the Global Talent base to come together to solve it. Inare maintaining our growth the u. S. Office as well as the china office to help together more talent and solve this problem. Romaine ceo of didi Autonomous Cars was speaking earlier with selina wang. Aroline there is always great barometer that the roof that the bloomberg has that i have not checked in on in a little while. I welcome you to the bloomberg u. S. Startups barometer. It tracks every single monday. Romaine you are all about the weather today. Barometers. Caroline this one is a storm in terms of funds flowing into private companies. It has been pretty dire, of course. But maybe next week, you will see a little tick higher. Today, an exit for none other than postmates. We do have confirmation that uber will be buying postmates for 2. 65. All about the expansion into delivery. The uber knows postmates stories. Talk about this uber deal. How good is it for uber . It is not as exciting as the grubhub deal would have been. If you really think about the food Delivery Market, there was sort of doordash closely followed by uber and grubhub, then in a distant fourth, postmates. The big problem in the food Delivery Market has been sort of this intense competition with all of this capital that has flooded into the market, everyone trying to establish market position while basically ignoring profitability. Postmates helps, it gives uber a strong position in los angeles. Its biggestckout competitor in doordash or a long entrenched player in new york and chicago like grubhub. Romaine the sort of barriers for entry for this industry are not incredibly high. Even if you get the consolidation, there is no guarantee that another Delivery Company might crop up a few years from now. That is right. Grubhub and seamless merged. They thought they had the market figured out with their model where they facilitated restaurant deliveries. I guess sort of one half joking softbanks that vision fund is less of a threat now. Not quite the same risk that truly Irrational Capital will flood in and keep the competition going. , basicallyostmates delivery as a service, not just food. How does it help uber in the longerterm . Will we see it expand more onto the grocery side of things or are they trying to narrow down what they do rather than expand . Hasber, in announcing this, emphasized postmates General Delivery ambitions. I think uber shares those General Delivery ambitions. But postmates has mostly been a food delivery, the food Delivery Company. They see this path, we can compete with amazon, we will be sort of some local delivery facilitator helping Small Businesses of all sorts, not just restaurants. I just dont think we have seen a full execution of that with postmates. Desires sort of a shared to achieve something in terms of the broader delivery vision. I dont know how much that helps uber achieve it. And they have got to make money at some point. That is what they keep saying. Romaine we wish them the best. Eric newcomer, he covers startups and a lot other things for us here at bloomberg. I think we are going over to the great Caroline Hyde for our weather report. Sorry, the first word news. Caroline i will discuss the storm outside first and foremost. Then i will get onto the nations top Infectious Disease a nationalpeaking to institutes of health conference, shot forauci said a covid19 wont work like a measles vaccine, which lasts for a lifetime. Florida is continuing to see record numbers of coronavirus. 3. 2 today, down slightly from the day before. Or than 50,000 new cases in the past week. Hardhit miami. Officials are planning to close restaurants, gyms, and other businesses. Meanwhile, new york city is taking another small step toward reopening plans. Salons, tanning to reopen. Floridauch as texas and after they reopened. Canadas Prime MinisterJustin Trudeau says although he wishes the u. S. And mexico well, he will not be joining a white house meeting to celebrate any regional free trade agreement. President trump and mexicos president are set to meet on tuesday. Trudeau has been conducting cabinet eating is online instead of in person. He praised the new act, saying it will help north america emerge stronger from the pandemic. 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. Im Caroline Hyde. This is bloomberg. Natural gas pipeline and storage assets. The chart you are looking at on your screen gives you a sense of why you have not seen a bigger deal by berkshire in quite some time. The last big deal they did was about three years ago. Big reason, that white line, a sense of s p evaluation. Than blue line at the bottom is brookshires cash flow. It gets a little bit harder for them to find those companies that can deliver some of the value returns they typically look for. This next chart will give you some idea of why the stock has been underperforming. These big deals were part of the secret sauce for the company for decades. That divergence you are seeing on the right side of your screen sincen returns in s p 500 march. Stocks that did not necessarily carry a lot of value but did find returns. We want to bring in our Bloomberg Finance reporter who of course has written a lot about Warren Buffett and Brookshire Hathaway and hires dealings. This deal, not a very sexy deal, but it does seem to be in Warren Buffetts wheelhouse, these Energy Companies that in the past have returned a good amount of value. Buffett has been very cautious since the pandemic started. He really has not pulled any of the big moves that built his fame in 2008. This deal, while it is sizable, and i think it does at least show that he is willing to put up money for businesses he likes in areas that he knows, they are picking up some assets that are really just going to scale it up a little bit more. While i think it is a good sign that he is willing to spend more money on good businesses, it is not quite the one buster deal everyone was hoping for. Caroline the press release that came out, the fact that Warren Buffetts name comes up first rather than possibly his predecessor, greg able. Greg able is the man who helms the energy part of the business. Agreed. If anything, buffett turns 90 next month. I think it is the fact that his name is at the top of the press release kind of reinforces the idea that he is still at the helm of this company. He is still really having an important role. Greg able knows this business well. The fact that greg shares the stage with Warren Buffett in may actually underscored the point that he is a good dealmaker and knows a lot about the business. Romaine there has been a lot of sort of trolling online as of late denigrating buffett, saying he is washed up because a few day traders made a fortune on hertz or something, but there is a transition that will take place that will still prefer debt still preserve the general ethos that really undeniably has been a success. Agreed. These criticisms of buffett come up routinely. You think of the dotcom bubble. It is a little hard to say whether the criticisms are fair this time. He is approaching 90. He has already built a huge business and there probably is a part of him that does not need to keep doing exactly what he did before. But he has built a huge business. I think underscored by the fact that when Dominion Energy needed a buyer that was willing to construct a unique deal like with the assumption rate this operation, berkshire was there. Even though we are going through one of the most Tumultuous Times in history. It kind of underscores that while berkshire is struggling to pull off the big deal that made it famous and it needs to supercharge its growth, it is still a pretty solid operation that can pull off some interesting deals. Romaine anyone who looks through their financials can definitely see that. Thank you very much for that. Caroline i quick check on the latest is this flash headlines. For now, facebook will not process user Data Requests from the hong kong government. There are concerns that new demands could criminalize protests. Apollo Global Management plans to shakeup private credit with a 12 billion lending program. Their firm will offer loans of up to a billion dollars for big businesses. 210 from assets under management. A couple of highly the Ivy League Schools are unveiling plans. Harvard and princeton plan to bring back a portion of undergraduate populations. Princeton is also cutting students, 10 for whether on campus or taking classes online. This all folds in rather nicely to a few conversations i was having over the course of the weekend, the fact that people are so desperate to get their kids into school. For many, they have moved to, shall we say, expensive, taxing areas. Not quite the same capacity they had always envisioned, but there were stories today about how people are making enormous downpayments and actually paying deposits to get their children into newer schools. Romaine a lot of these people are new yorkers who fled to other jurisdictions. They are still kind of hedging their bets on making downpayments in private schools in the city. But also trying to get their kids enrolled in florida, california, the Upper Peninsula moreover they may be camping out. Nobody knows of the schools will be open in the fall. As a parent, it does make it a little bit hard to figure out what to do. Caroline as many in these situations, i am sure, do, the throw money at the situation. Trump was out today saying that schools must open in the fall. Exclamationee points on that. For now, i am going to be heading out. I know you are going to shed a tear. I have to move over to Bloomberg Technology for the evening. My conversation with scott kessler. 5 00 p. M. New york time. This is bloomberg. Romaine welcome back. Time to check in with joe weisenthal, who is out there somewhere in texas. We were talking a little bit earlier about what was going on with the vix, how it was off those highs but still almost double what it was in the precovid era. We are trying to decide, a bullish signal, bearish signal, or what . With thisntly, even huge rally, still elevated levels. Near the highest levels of 2018. Even 2015, when we had some big downturns. I think you could make the argument that this is camping some of the downside. Some selloffs here in there lately but i think it is one of the clearest indicators that for as much as the market has rallied, everyone is waiting for that other shoe to drop. Romaine the chart on the screen showing the cap between that drop in the vix. We have seen some strategists and analysts say that gap is a little too wide and does not really reflect enough hedging here. Ae it is just so hard to get feel on this market. Tesla last week broke 1000 and ay, it is breaking 1000 1300. It is not intuitive how this fits with such a vix at a high level but i think it speaks to how hard it is to get a true read on sentiment. Romaine at least for a while now, you will not have a lot of data that matters in the short term. Right now, you have a market that is basically chasing price action and continues to push us higher. Joe it certainly seems like it. Great story on the bloomberg today by sarah ponczek, just talking about the extreme uncertainty still. Last earnings season, it helped catalyze a rally. But so Many Companies just pulled guidance entirely. The last earnings season would be difficult to measure against benchmarks, i think this one will be just as difficult. Now we will see companies have a better idea of what the postcrisis era looks like a little bit, maybe more talk about longerterm plans. But we are really going into this one as blind as ever. Romaine we had sarah on a little earlier to talk about her story. We always use her as a warmup act for you. Be well, be safe. That is of course the normal andst of whatd you miss . Bloomberg markets the close. Joe weisenthal camping out in texas. Bloomberg technology with Caroline Hyde is coming up next. This is bloomberg. Caroline u. S. Stocks jumped. Its sixthsting straight increase, the longest winning streak since december. Tesla extended a five day rally to more than 40 . Cases rose by less than the seven day average. On the other hand, new jersey saw