Airlines. States added into the quarantine list in the tristate area, and that is affecting airlines. Twitter is up 2. 9 . A little bit of a tease early on, a tweet from jsck saying f everyone inthat it america wore a mask, they would add a like button. Lori heinel is with us now. While we looked like we were seeing a selloff, we are now fighting for a take a lower in the markets. Is there anything to upset this market trajectory . Lori there is plenty to be concerned about. Everyone is certainly watching covid cases and whether those continue to accelerate. While we are likely to see optics in cases, and it will be spotty around the globe and in the United States, we think there is less chance that we will have the accounting draconian measures, a complete shutdown. We have to think about covid but also how this will improve as we dont have those complete shutdowns that we had earlier this year. Vonnie would you say to any client that you need to be somewhere, given that they are such a gargantuan portion of the market these days . It is hard to be out of them completely because they are such a large proportion of the market but we have been underweight to those names in the aggregate. We think they are pretty extended. We think there are other opportunities in the i. T. Space, other sectors where they have been more underappreciated. If we are right, that we will see an improvement in the economic backdrop into the end of this year and 2021, we think there are better opportunities in other sectors. Vonnie would you put new money to work, take money out of some areas in order to make it pay better dividends . Lori right now we are slightly aggregatet in the because we think the market has run pretty hard. We have taken some profit and redeployed that in Investment Grade credit, where we think Interest Rates will likely remain low for a long time. We have also seen good policy support from the fed, has committed to support many of these markets. We think that is giving the current inflation backdrop, which is nonexistent, some pretty attractive returns. We have also continued to look at places within equities. That would be more of a rotation, where we think the earnings cycle is improving, or where the relative valuations are attractive. Signed tou must be get questions on the 2020 election. Early and some say it is too early to talk about it, you have to start taxking about a change in regimes or regulations, should there be a change in the leader. Lori absolutely. We think the markets are likely to turn their attention to the elections in earnest once we get past the conventions in august. Probably we will still focus on covid for a few more weeks, but once they get past that and get into the fall, the elections will loom larger. Clearly, the candidates are wildly different in terms of the policy they may support related to Certain Industries like energy, financials, health care. Taxation is certainly an area where the two are likely to be different. There will be implications for how any current your stimulus evolves. Depending on how the polling is going, one or the other party may want to push its own agenda as it relates to the stimulus that might be supported in 2020. The election will have a lot to do with how the markets respond over the coming months. Data hashe economic been quite strong, but at the same time, there is a sense that the economy has to be week. We are in a massive recession and there will be a bounceback but we will very likely be around 9 unemployment at the end of the year, according to many. How can the market holds up so well in such a weak economic environment . Lori i think a couple of things are driving it. We have been advising our clients not to just focus on the next couple of quarters but to extend their time horizon. Think about what the economic backdrop is likely to look like in 2021 as we start to get past the pandemic, potentially get a vaccine. That timeo elongate horizon and you can see a pathway to a pretty sharp recovery in economic data, corporate earnings. That provides some support so to speak for the markets, although we would technology that the market may have gotten ahead of itself on a nearterm basis. Equities relative to bonds also look attractive. If we are correct about the idea that Interest Rates are likely to remain low, near zero globally, then if you think there is a future where there is economic recovery and we believe that will happen you may find attractive entry points here. To us it is less about the market being attractive in this elongateut trying to that visibility. Our view is that we will see a pretty sharp recovery in 2021, providing support for equity markets in the intermediate term. At what point do investors get worried about the fed tightening again . If we see this rebound, surely that will come up at some point. It will at some point but we dont think anytime soon. Even before some of the most recent activities, the powell regime has been committed to letting inflation run hot. We were writing earlier this year about the fact that you may see inflation pick up above the fed target because they were not going to be in too much of a hurry to take away the punch bowl, so to speak. We dont think there are concerns about the fed choking off any recovery. We also dont see any signs of inflation. A little bit of concern that you may get some food inflation, energy inflation. Yearoveryear will look inflationary, but in terms of capacity constraints, labor, things of that nature, all the things that typically drive systemic inflation, we are not seeing the rationale behind right now. Vonnie thank you so much, lori heinel, executive deputy chief Investment Officer at state street global advisors. Lets go to Mark Crumpton with the first word news. Mike the white house wants congress to pass another stimulus package by the first week in august. According to Vice President s top aide, the administration wants to keep the price tag at a trillion dollars or less. The economy is bouncing back and spending should be limited. He tells bloomberg goal is to protect those who are unemployed or hurting. Brazils president joe your pulse in a row has tested positive for the coronavirus. He told cnn brazil that he is taking hydroxychloroquine and is feeling fine. Calledyearold president the virus just a little flu and has disobeyed medical recommendations about contamination. A globals become hotspot for the virus, second only to the u. S. In cases and deaths. Millions of americans have already moved due to the coronavirus, according to a survey by the pew research center. It found 3 of u. S. Adults have moved temporarily or permanently. 6 say someone has moved into their home because of the virus. Young adults are most likely to have relocated. Have said they0 moved. The japanese Prime Minister shinzo abes ruling party is calling on the government to cancel a visit from xi jinping. No choicehey have after the imposition of a National Security law for hong kong. It would make secessionist activities illegal. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im Mark Crumpton. This is bloomberg. Vonnie this is Bloomberg Markets. Im vonnie quinn. Fors go to the emily chang a conversation with the postmates ceo. Week. Iously big news this postmates agreeing to sell to for 2. 65 billion. Joining me now is the cofounder and ceo bastion lehman. So curious to hear your thoughts process. As recently as last week, you were still considering taking postmates public. Take us through your decisionmaking progress, how did you decide to sell to uber, and why now . Thank you for having me, always great to talk to you. You are right, we were very close to we were very excited about that pat. What happened in quick order, i got a phone call from dara. We spoke on the phone and we talked about a framework that we think makes sense to bring the companies together, and we took it from there. 90 you are still working on the integration, but what can you tell us . How many of your employees will have a job in this new world . Will you be with uber . Bastian we have been focused on the for now. There will be time to do work on the antitrust side. 2021ink we have until q1 to figure of the details of the integration. Ber is excited about the brand, something that they were missing, a beloved, very millennial brand in the food delivery space. I believe it will be a great combination. I have no doubt that our team and employees can find a great home in the joint entity. About myself, we have not talked about the role at all. If dara were to retire, you know emily we will let him know that, thank you. Was the big first ondemand food delivery company. I was one of your First Companies customers, and you inld extrapolate for me interviews how big you thought the market could be. It was not a straight line, and im sure you could tell stories four hours. Give us one or two of the hardest things that you did in the early days to make this work. Bastian it could fill a book. Its important that we look at postmates and we see it as a Great American entrepreneurial story. It has founders that grew up poor or from humboldt upbringings, college dropout, scrappy teenager fighting against millions stacked against us. We never gave up. We always had this clear vision of what we can achieve. There are so many things. I will give you one example. Very early on when we started the platform, it was really more of a business to consumer platform. We would allow you as a store owner to ship an item that you just sold. The reality is nobody used the app for that. Customers would use the app and would try to purchase at stores. This was just the beginning in 2011. We realized we needed to have an ability to purchase items at the star, that you were to enter, like a shopping list. That . We do payment infrastructure and not exist the way they do today, so we would equip our fleets with visa cards. We would take a credit card and purchase thousands of dollars in these are credit cards, and in turn, we would give them to our fleet in san francisco. Our very first version, they would walk to a store, purchase items with a visa gift card, and then charge you at the door with the square reader. Gladly, we have moved on from that. Emily the rest is for the book. A, youly took off in l have a stronghold on the american southwest. Why do you think you could not replicate that success elsewhere . Bastian i think we did, i truly believe we did. You have to recognize this quickly became a competitive space. Others had a bit more luck in different areas. It is not different than what we see in europe, with the exception, you see these players having strongholds in certain that america as a whole is larger. These are not surprising dynamics. It is a regional game. This is still a super competitive, rapidly consolidating business. A lot of the biggest players still lose a lot of money. What is your view on how this market looks in five years . Who wins, and are they still bleeding cash . The most important thing to recognize is this is a market that is rapidly evolving. Look at the scale that postmates has achieved, 87 of u. S. Households within a year. Strong abilitys to deliver groceries from whole foods. This is a market that is evolving in a rapid pace. Covid, as tragic as it was, has pushed this market forward by at least two or three years. If you look at the concentration and the order frequency of groceries compared to europe, the United States is not leading. The habits of these customers will change and the order frequency and the usage of these services will accelerate. It will include many categories that are untouched. I believe this is the next frontier in commerce, moving way beyond prepared food. I think the players that you see right now, more than it is understood, are in their own ways, on a path to profitability and have great prospects to get there. All of these companies have been fighting a law in california that says your contract workers should be fulltime employees with benefits. At the same time, you have certain cities putting caps on the fees you can charge to restaurants, and some Companies Like postmates have been accused of flouting those rules. How big of a risk are these issues to the longterm success of these businesses . Bastian clearly there are challenges out there. Unfortunately, became so thing thatolitical it is almost impossible to talk out anymore from a factual basis. Provides nob5 framework for the future of the gig economy. We propose alternatives. We have done some of these. We are the only company that has representatives from the fleet interacting with the company. Jointlylso have propose to work in a different way. I believe we can do it a lot better than what we have with ab5. If you think about cities imposing restrictions on these platforms, there are things that we can do which are better. Believe all of these players pay into it, evenly distributed to the restaurants, is a better approach, and we advocate that in the cities that we are operating in. We are making great headwind there. You takingpreciate the time to join us this week, bastian lehmann, cofounder and ceo of postmates. Emily chang, thank you. Much more coming up. This is bloomberg. Vonnie this is Bloomberg Markets. Im vonnie quinn. It was an all stock deal valued at more than 3 billion. If it goes through, can the company will have 75 of market share. In this merger, you have the acquirer and the target moving higher, which is not always what you see. Vivent hasiting that done well in reviving its sales process. 2021 sales are expected to rise 51 from five years ago. But they had lagged behind what it comes to storage. Wants to leverage some of the investments it has made across the past couple of years on the form a bit they want to lower the cost of signing up new customers. Marketing is usually the biggest expense for u. S. Installers. The key strategy is to go doortodoor for sales, which fell down by the way sidearm the lockdown. Solar could be an industry that recovers faster than others, especially with people staying at home, driving up their electricity bills, thinking of ways to renovate their homes. Vonnie any regulation issues . It is a possibility but sunrun will provide 75 of new leases each quarter. Chairman today shrugged it off, is not overly concerned. He says there are 10,000plus Solar Companies in the u. S. , and the residential solar generation is still pretty small. He does not see it as an issue. This is one of the Solar Industry biggest transactions can and could lead to more consolidation. Scarlet fu, thank you. Coming up, we are talking Hedge Fund Liquidations with fabiano avoldelli. Mark im Mark Crumpton with bloomberg first word news. Tennessee senator Lamar Alexander is the second republican to announce he will skip the 2020 republican convention. Grassley said monday that he would skip the gathering out of concerns over the coronavirus. Largelyention is gathering in jacksonville, florida. Last week, jacksonville had the Fastest Growing rate of the coronavirus of any metro area in the u. S. In florida, the percentage of covid tests coming back positive is climbing, undermining Governor Ron Desantis claim that the crisis is not getting worse. There percent went to 16. 5 from 15 on monday. More than 61,000 new cases over the past seven days, the highest ever. Beijing reported zero new coronavirus cases for the first time in 26 days, a sign that a resurgence that raised fears of a second wave in china is now under control. Acrosstheboard lockdown, beijing included targeting measures, including testing more than 11 million people. Biggestg is seeing its number of coronavirus cases in three months, stumping local health officials. There are only nine new cases but it is a set caught setback or hong kong, a city the largely contained in virus. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Greg im greg bonnell in toronto. Vonnie im vonnie quinn. We are joined by our bloomberg and Bnn Bloomberg audiences. Here are the top stories we are following from around the world. Liquidations climb to the highest in four years. The pandemic triggering sharp losses across the market. We speak with Fabio Savoldelli of the Columbia Graduate School of business. The Keystone Pipeline stays blocked. What comes next after the Supreme Court refuses continued construction, rejecting a bid by the Trump Administration to jumpstart the project. With and we will speak lets have a look at markets. Interesting moves out there today. We had a nice rally based off the strength we saw in china. Weakness out there right now. If we are looking for strength, it would be in a tech stocks, but that has largely been the story of the pandemic. The nasdaq continues to make new highs. The s p 500 down a third of a percent. The dow down. 75 . United airlines, concerns in the Investment Community about the coronavirus. Even though we have had a sharp ounce back, we are seeing signs out of europe that it will be a slow recovery. Out that theound president of brazil tested positive for covid19. A says he feels fine, but reminder that the virus is not gone. United airlines down about 6. 5 . Tech is working today but not so much when it comes to those names dependent on us getting past this and back to something that looks like normal. When we talk about the big bounce back in stocks, it is all about playing nimble. Lets talk about the Hedge Fund Industry. Sloan robertson today announced the closure after 25 years. When you have an event drew a like this, how does the Hedge Fund Industry survive and thrive . Joining us now is fabulous sabol delly. These are the rock stars of the Investment Community. How do they survive in times like these and how do they drive . we really have two things, rock stars, and when we see these large numbers, it is the younger startups. Starsre are rock quitting, they are a lot closer to Keith Richards and the jagger in age than they are to a young startup. When we look at the people that quit, sloane robinson, the partners are in their 60s at this point. Sloan,founded by hugh George Robinson in 1994. You add to that they were down around 12 between january and june of this year, down in the main fund by about 8 . Overad dropped from well 10 billion to somewhere around a billion now. Everything is in place to do a jagger and mick hang up your boots. John paulson had less than 9 billion this year. Inmade 20 billion in profits 2007, 2008. Hit on gold and then they became one of the largest hedge funds in the world. Europe, was down around 23 for the first half of the year. Dropped from 22 billion to less than half of that. In europe,ing funds the United States, funds trading in asia, all older managers frankly hanging it up. I guess that is not a huge shock. Greg hedge funds returning 1. 4 in june. Some people are needling them in the press, saying the socalled robin hood investors are doing a better job picking stocks than the hedge funds. The case could be made that maybe they should also try to robin hood. One of the things that has been interesting is some of the older hands that have been around for , it is kind of a shocking number, but only about 50 of managers that are out there have over seven years experience. The majority were not even a run for the 2008 crisis. Had drawn down they never had before, and took risk off of interest instead of looking at the market in a , as we see money coming into the market, we are going to reflate. What hurts you is not the drawdown. What hurts you as a manager Going Forward actually is not capturing the bounceback. That is what will cause these guys to really get crushed. Is it a question of strategy as well . Macro do, we have seen best out of all the strategies. Fabio that is correct. Well passed on decently but still up only 3. 5 roughly speaking year to date. Gave you a god given opportunity, the currencies have given you a godgiven opportunity. You cannot say that you did not have enough volatility. Some of the macro managers really did get it. Others said we didnt know what was going on. I am not an epidemiologist and im taking risk off the table. In the old days, you would have seen Hedge Fund Managers more aggressively approaching the volatility. Vonnie do we see new hedge emerge . We are seeing a huge amount of credit funds being created, a lot of money going into that because there is the perception that there will be distressed situations to take advantage of, but now that the fed has stepped in, the mathematics has changed, too. Fabio i have got you now. Funds closing, and the strategies vonnie specifically credit strategies. We have seen a lot of money raised there. The fed is now in that market, so where does that money go . Fabio a lot of them wanted to see things worse than where they work. They did not want the fed to step in and take away their opportunity. I think you will see, where the real opportunity may end up going, is actually in places where they have not intervened. You will see a lot more people looking at european credit and emergingmarket debt. Uncle to comech and bail you out. There will be much more of an opportunity of the conditional hedge fund style that will allow them to get involved. Certainly, opportunities in the u. S. Airlines, travel, things that are below bbb and ineligible for fed purchases are very much in play and will offer opportunities or hedge fund. One opportunity i noticed out there in terms of where these hedge funds actually made the right that bet, dividend futures. Some of the more noble funds are the ones that took advantage. Is this again the young, nimble ones taking advantage of an opportunity in the market . Fabio i think you are right on the money on that. One of the things that you see, one of the great risks they you startstors have, off with a small amount of money, you can do trades like that. Once you reach 5 billion, you cannot move the needle executing those trades. There is a balance between an optimal size and with the you areof 2 and 20 the hedge fund manager, you want to be the biggest on the block. Investors like me would ask, how much money did you make on the trade . When you see the fund is 3 billion, and you did that for years ago, that doesnt do much for your longterm track record if you are doing things that you cannot do Going Forward. Vonnie we are out of time, but right to thanks but great to catch up with you. The Keystone Pipeline faces another set back. With the latest decision from the Supreme Court means for the oil and gas industry. This is bloomberg. Vonnie this is Bloomberg Markets. Im vonnie quinn. Court refusesme to let construction start on the keystone xl pipeline, rejecting a bit from the Trump Administration to jumpstart the project. For more, we are joined by rachel adams heard. What do the different constituencies say about this . What we had yesterday was the Supreme Court say a Lower Court Decision that affects this permit for a lot of pipelines across the u. S. Did not hold, but did hold for keystone xl. Faces a lot of challenges before this, but this is the latest blow to the ineline that has been lined the courts for decades for now. We have been waiting for a decision to be made. Are there any more steps that can be taken . I think that we will see is there will obviously be continuous legal challenges over this pipeline and the additional pipelines that are affected by this decision. What we had yesterday and on sunday was this 24hour period where you saw this gas pipeline get canceled, and that was Lower Court Decision on the keystone xl pipeline that was upheld by the Supreme Court. I spoke to someone who said we had to be honest with ourselves, a world in which a gas pipeline smaller than keystone xl is not built, it is probably a world that keystone xl probably does not get built, but we will have to see. There are certainly a lot of skied x when it comes to this pipeline. Greg when it comes to canada, connectedrts are very to the energy industry, pipelines are that of an a bit of an obsession. A lot of canadians think it is a made in canada problem, but this highlights the fact that it is not a clear and easy path south of the border. What is the appetite or pipeline construction in the United States . A lot of people are seeing that we are running up against the end of the big pipeline buildout era and that we may have seen the last major oil and Gas Infrastructure project, or that we will in the next year or so. Keystone xl is so interesting. This is something that trump moved to streamline and his first week of office, and here we are four years later, going into another election, and this thing cannot get built. It really shows you can have a friend in the white house, big industry efforts to try and get this through the courts, but at the end of the day, the opposition from the environmental groups who are targeting fossil in general is so strong and successful, building a pipeline in america crossing borders is becoming almost impossible. Thank you for that, amber. Sorry, rachel. Thank you for filling us in. Vonnie coming up next, we are speaking with someone from the eurasia group. We will be speaking about amlos visit to the United States. This is bloomberg. Vonnie you are watching Bloomberg Markets. Lets get a quick check on the markets. We have been bouncing around a little bit, started out on a down note but now we are in the next. The s p is down a quarter percent. The dow is down. 6 because we have airlines lower, after new york and stated quarantine bans on three more states that have seen their rates top 10 . United airlines down 6 . Really getting affected at newark. Tomorrow, we will have an interview with the cfo of twitter. The leadership putting out the idea that we could get an edit b utton, but for that, the whole country would have to wear a mask. Canada . Ask compliant in it is not federally mandated here. It seems like each individual state is judging how bad the spread has gotten in their state before the local leaders will come out and say you must wear a mask. Greg very much the same here in canada. The problems in ontario, where we are located, the premier said the local cities need to decide for themselves. The city that i live in mandated the wearing of masks. What i can see anecdotally, people were wearing them for the most part. In indoor spaces but they are leaving it to a regional perspective, you decide what is best for your region. Vonnie we are going to get more on the coronavirus with more than 140,000 vaccine candidates around the world. The ceo of a Vaccine Company joined bloomberg earlier following the news that they would be getting funding. Tactic of taken the having a vaccine that has the recall been in protein we make that largescale. That protein itself has the ability to stimulate antibody responses that should be protective. To boost theix it immune response to the antigen and to boost the response. Our vaccine has both. You would think both components are important. Do you think a world where we get a one shot and done, like the measles, is realistic . Can you give me a perspective on the timing between a multishot versus a onshot deal . In our trials, we are trying out once a day, following up on day 21. For our vaccine, it could be a standard approach. Other vaccines could be is trying could be trying just one does. There are several different approaches to a vaccine. We are all targeting the same protein, the spike protein. Its a protein on the surface of to virus that has to bind your human respiratory cells. If you make antibodies to that spike protein, you can block it from causing illness. There are several different ways, three main ways we are making this protein. One, where it is inside of a that has been killed so it does not infect you. The other is to make mrna that encodes the same spike protein. I guess ours is the more proven traditional way. It sounds all but it is not. To actually make the protein itself that forms a nano particle that is immuno resistant. There are three different ways to make that protein, could result in three different immune responses. Some more potent, some less. He data will show us we are all racing as fast as we can. We are in phase one trials, getting data at the end of the month. Those should turn into phase two trials at the end of august. By sometime in the fall, we should have evidence, because we will be doing this in multiple countries. We should have evidence that the vaccine is stimulating and immune response that is safe. Dr. Fauci talked about the fact that we are starting to see mutations in the virus. Would that affect the spike you are talking about, is that were to mutate, how problematic would that be to your efforts . We have looked at it and so far we are in the clear. That is why you want to have a which has a ours fulllength protein, stimulate antibodies to many parts of the protein and has an element to broaden the response. Of vaccinee is a lot under development from different companies. How is it to get test patients to try the vaccine . Isnt an easy, do you have to compete with other companies . Its a question that is increasingly asked. It is not hard for the phase one study. 130 people in one day. Withu get into trials every thousand people, we can do that as well. Lots of people that would love to have an experimental coronavirus vaccine. Three or four trials with 30,000 people, you may pop into one another. Vonnie that was earlier. See you tomorrow. This is bloomberg. I got an oriole here. Eh. Common bird. Ooh look over here something much better. There it is. Peacock, included with xfinity x1. Remarkable. Fascinating. Very. It streams tons of your favorite shows and movies, plus the latest in sports news and. Huh run the newest streaming app has landed on xfinity x1. Now thats. Simple. Easy. Awesome. Xfinity x1 just got even better with peacock premium included at no additional cost. No strings attached. Just say peacock into your voice remote to start watching today. 2 00 p. M. In new york this is Bloomberg Markets the close. Bring tech down. The sectors, continuing to outperform. The nasdaq into another record day. Facebook, google, twitter, topperforming. And follow the money. The Trump Administration, releasing a list of companies that received more than 150,000 in ppp loans. The big names that made the cut. All that and more, coming up. Lots to talk about teddy on the big show. We started out this morning with Industrial Production orders out of germany,
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