Its 46 waiting to apple, amazon, microsoft, facebook, and google. We are seeing the worst case fear on the part of investors that if those names go down it will take the market. We are seeing that split between the s p 500 and the nasdaq. Small caps getting a bid, which did not happen yesterday. David speculate with me. How much of this is the real world . We have the big european fiscal bailout approved yesterday. We are talking today about one in the United States. Is it possible this is reacting and stocks would do well if there was a recovery . Abigail i think this has more to do with trading and technicals. When you look at the rotations, there are many rotations going on week after week between the different sectors. It does not fit into one bucket , and lestlogy investors think one week unless investors think one week recovery. Where we have real euphoria is silver, up 60 . Gold lagging behind on the year. Gold is leading. It is not stocks that are getting a huge big rally out of the lows on central bank liquidity, it is also precious metals. Itll be interesting to see if the rally out of the march low can happen across Asset Classes or if we will see a tapering this week, perhaps relative to stops on our next statement. David it is exciting on the equity side. Bonds not so much. More boring. Thanks to Abigail Doolittle for the running down on the market. Nancy pelosi meets with secretary Steven Mnuchin of the treasury department. We turn to david mcintosh, the onsident of club for growth his take on what is going on with the stimulus. We all know with the stimulus are. What are the things you think would be good for the economy and what are you not so sure about . David m. great to be with you. The key, looking at the next round of federal road legislation of federal legislation is what will keep the economy open and help businesses recover. Just spending more stimulus money will not do it. Especially when it is spending money that goes to local and State Governments. What is needed are policy changes. We have to protect people from the threat of lawsuits. The senate has put that on the table and is adamant about it. Should authorize the president to continue waving regulations and red tape, so a Small Business is reopened, they will not be threatened with a huge regulatory burden. They have not spent half the money regulated earlier. What they have to do is reassign that to some of the areas where people do need help. They can extend the Unemployment Benefits but correct it so they are not paying the 600 bonus where you make more not working then you make working. Correct the formula and extended by using the existing funds they appropriated a month ago when they did round three. That is what we have told them is the best for the economy. It will help ensure businesses can get back on their feet, can start rehiring faster and the recovery will happen sooner. What about the direct payments . They are talking about a renewal of the payments. There was 1200 before. Do you think that has helped the rebound in retail sales . David m. i think it has helped in liquidity and giving people the cash available to do it. Frankly it is better to use that money in stimulating jobs where people are making money directly from their employer been able to spend based on that. They better target is the assistance to people who are out of jobs. That is the unemployment mechanism, so they have the cash and the money available to keep doing what they are doing looking for the new jobs. What you do not want to do is continue every two to three months to send Cash Payments that have no larger economic growth. If instead of sitting out the cash payment they focus on getting Unemployment Insurance corrected so people are helped but not incentivized to stay away from work, then we can see the liquidity in the economy and people go back to work and grow the economy. David what about keeping people in their jobs . There is a lot of reporting that if there is not support given to state and local governments we will have a lot more layoffs. There already have been son. Governors are morning they will have to lay out theyre already been some. Governors are morning they will have to lay off more people. Come republicans and democrats. David m. the states have in their control to get revenue to their taxes. If they continue to shut down where it is not needed, they are losing revenue. We do not want to create a disincentive for them to do the right thing of protecting people from the virus and reopening the economy. I am not sympathetic to that claim by the governors. Most of the local governments we talked to have already received more money than they wouldve expect to have gotten in revenue at 100 normal economy. They are putting their hand out for more when they see an opportunity to do that. California says we will start paying down the debt we have and balancing our budget. The states have in their control to deal with this. They do not have to lay people off. State andare tactic local governments use. They did a budget, and instead of producing the overhead that is not needed, they said we will take away fire and police. They know politically that is the most sensitive. I think it is a political argument, not a big economic factor. David what about one particular aspect of State Government i do not think much money has been spent on. That is the school. To get kids back to school safely. Everyone seems to agree that will take extra money. If you have social distancing recommended, if you have the equipment, are you in favor of giving states specific targeted efforts to support the schools. David m. a great question. We are in favor of money going to education, but instead of sending it to the schools, what we would propose is it is almost like Cash Payments, but you directed. You have a covid emergency grant to every parent, may be up to 10,000 per student. They can use it to send to a private school or if they cannot afford tuition to send them to the local Public School. They can use it in homeschool or use it to assist in the Public School system and things of the schools are shut down and not able to do it or they are distancelearning and they have difficulty with that. By the way, i am told they only spent 195 million of the several billion dollars already directed to education. There is money in the system that has not been used yet. Use that and converted into Grant Program and then use it for Public Schools, for private schools, for home schools. David thank you so much for joining us. Always a pleasure. David mcintosh, president of the club for growth. On the other set of the atlantic , europe has agreed to a 700 50 billion euros stimulus package. Jacobl talk with kierkegaard of the Peterson Institute. That is coming up next on Bloomberg Television and radio. David this is balance of power khan blumer television and radio. I am david westin. Is balance of power on Bloomberg Television and radio. We go to mark crumpton. Mark the Justice Department accusing chinese hackers from Companies Across the world, and more recently targeting firms developing a vaccine for the coronavirus. The hackers stole information they knew was of interest to the chinese government. The hackers targeted companies in 11 major nations, including the u. K. And germany. China, flying across the country. Waters rose as high as 10 feet in some areas. Heavy rain is expected to continue for six more days. Least 141 people theian interference in brexit referendum. Only back against President Trumps threat to send federal agents to put down on rest. On twitter, mayor lightfoot said she would not allow it and i will do everything in my power to stop you. Twice in recent days the president has said he wants more federal Law Enforcement officers sent to the city following the dispatch of the department of Homeland Security personnel to portland oregon, ostensibly to protect federal property there. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. David . European leaders reached an historic agreement on 750 billion euros of fiscal stimulus. We welcome jacob kierkegaard, the senior fellow at the Peterson Institute. Welcome. I said historic. How big of a deal is this for europe . Jacob i would use the word this is the first time the European Union or the institutional embodiment of the largean project used amounts of common debt to solve a common problem. This would be about 750 billion euros, some of it will then be given as grants to Member States, some of it as loans to deal with the postpandemic economic recovery. That is a very big political taboo that has been broken, and perhaps more importantly, in the future, when the eu is again hit by whatever crisis might affect , leaders at that point in time well look at the playbook established in the last five days and they will choose to so they do not have a full fiscal union in the eu because of this. Prospectinly have the of future crisis being solved with more common debt. That is a big deal for europe going forward. David how much diplomatic capital was used up getting this done . We had the netherlands, the Prime Minister really digging in his heels. Will people remember that in the future . Doubt in is no my opinion the frugal states led by the netherlands, but including the scandinavian countries and austria, i think they played a diplomatically not very clever hand, but they clearly shows for their own domestic politically they clearly chose for their own domestic politically reasons, they wanted to get more of their money back rather than push for the money being spent on the right thing. One of the unfortunate consequences of the political was you did keep the focus on the pandemic recovery, but you made other cuts to other parts of the longerterm budget, particularly regarding support for research and development and Green Technologies and these types of things. Country typically says they care a lot about. They got themselves into a little bit of a corner, and i do not think they have reached out but they will have a lot of other capital in the next six to 12 months. At the end of the day, the most important thing is there was a deal, at the end of the day you came together and move forward. That sounds like it was very important for the eu overall. How important is it for the european economy . When will the money hit the street. In the u. S. We had the fiscal stimulus out the door quickly. It does not sound like the 750 billion euros will be sticking around main street soon. Jacob it is important to is anize that this deal Macro Economic game changer it is not big enough. Opal tokely to be disperse about 1 over the next three years. That is not going to change the trajectory fundamentally, given the scope of the decline we will have this year. Is greatlyal does do ofands the political space the European Central bank to keep up its very aggressive monetary stimulus activity in very aggressive asset purchases. Those are the asset purchases that enables the individual Member States, including italy and others in running very large deficits so that they at the National Level can finance most of their own recovery, of course with the side effect that a lot more of their National Debt will end up on the balance sheet. There is a very important coordination between physical and Monetary Authority between fiscal and Monetary Authority, and there is an important political signal. Italians seet being hit by the pandemic, there is a degree of insurance cost. That is an important political signal. When this decides money gets disbursed and how it gets dispersed . To the Member States keep strings on it . Jacob this is where it gets very detailed and very murky and potentially quite problematic in my opinion. There is a condition in this agreement that individual canonal Member States basically put down and veto on dispersing the grant component of the money, which is 390 billion to individual countries has notfeel the country done enough economic reform to justify it. That is a potential recipe for a lot of ugly political mudslinging and posturing because we can imagine there are parties in the Dutch Parliament saying this about italy over the next 12 months or so. If that were to happen, then you can be sure italy would object to other things and not very much money would be dispersed. Unanimity ornt of the ability of individual Member States to block individual investment grants is the potential and significant source for concern with regard to relatively timely distribution of the money and at the money goes to the countries that need at the most. Thank you so very much to jacob kierkegaard of the Peterson Institute in washington. Coming up later, we will hear from Penny Pritzker, former commerce secretary, advisor to joe biden, on the new plan joe biden is announcing this afternoon for 750 billion in china in childcare and elderly care. This is balance of power on Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. Time for the stock of the hour. We will look at halliburton. Halliburton, with other Energy Stocks, is up on the fiscal stimulus out of europe and maybe some out of the United States. Kailey leinz is here to explain. Kailey a little bit of video with halliburton because they reported secondquarter results. Taken positive by the market. Ebida beat relative to expectations. 450 millionve dollars was double street expectations and their margins approved thanks to costcutting. That helped offset the fact revenue was down 7 . Fracking all but shut down. It got two analyst upgrades. That is part of the reason the stock is rallying for a second day. Ofouldve picked any number Energy Stocks to talk about. They are the leaders of todays session. The Energy Sector is up 6 . Outperforming the broader market, which is up. 4 . Every single stock in the S P Energy Index is positive on the top 10 each of the performers. The conocophillips and Occidental Petroleum this is in part thanks to the rally we are seeing in oil. Him up ons. Optimism as well as tops resuming in the u. S. On the next package aiding hopes about a recovery. David just to push a little farther, it is not just oil. Commodities overall are up. Jacob that is right kailey that is right, the ideally demand for commodities is going up. The bloomberg commodity spot marchis its highest since 11. That underscores the optimism about this recovery we are seeing. I would point out it is not just energy, but other cyclical sectors like financials and industrials benefiting from that today. David yesterday was all tech, today does all the cyclicals. Wait until tomorrow. Who knows what it will be. Coming up, we will be talking about the u. S. Charging chinese hackers with stealing research in covid19. We will be joined by james lewis. Ons is balance of power Bloomberg Television and radio. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. David this is balance of power on Bloomberg Television and radio. Im david westin. It is time for first word news with mark crumpton. Department isice accusing two chinese hackers of stealing hundreds of millions of dollars of trade secrets from morenies around the world, recently targeting firm developing a vaccine for the coronavirus. Prosecutors say the hackers stole information with the help of the chinese government. China is providing a safe haven for criminal hackers who, as in this case, are hacking in part for their own personal gain, but willing to help the state, and oncall to do so. The hackers allegedly targeted companies and 11 nations including the u. K. And germany. David westin will have more on this story coming up. The pentagon is considering changing its military presence in south korea and around the world. Defense secretary mark esper says the United States is turning more of its focus to china. Troops he favors having rotate their deployments as opposed to being permanently stationed somewhere. The u. S. Has 28,000 troops stationed in south korea as a defense against north korea. Joe biden has unveiled a 775 million plan to improve child care and care for the elderly. It would be paid for in part by taxes on Real Estate Investors with incomes of more than 400,000 annually. The Presumptive Democratic potential nominee would also increase Tax Compliance by high income earners. 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. Much. Thank you so just as mark was speaking, we had one more headline cross. Has reached an important milestone for the boeing 737 max approval. Right now i want to come back to the store that mark was talking about, the accusation of chinese hacking of intellectual information. The Trump Administration has made it a priority to protect our cyber world from china. We welcome now a true expert in this area, james lewis, the the Technology Program at the center for strategic and international studies. Lets take a this report today, the Justice Department accusing two chinese hackers. What do you make of that story . James justices have decided to push back against the chinese. Espionage has been going on for 20 years, they have ratcheted it up, looking to steal technology. This administration has been harder than any other. It is not a surprise that there are dozens of instances like this where you catch chinese spies trying to steal intellectual property. David do we have a comprehensive policy to defend ourselves against it, is it possible to have such a policy . James it is, and that is where we are headed. You need put together a package of things, factions, indictments, expelling people, working with allies. The chinese are not going to stop doing this, in part, because it is one of the secrets to their economic growth. This goes back to the 20th century, the idea that china needs to steal intellectual property. We have only started to just put together policies that push back on that. The Obama Administration reached an agreement with the chinese in 2015 that each side would stop using government actors to espionage. Ommercial that agreement lasted about a year and then the chinese walked away from it. What we saw today is a pretty consistent pattern. If you are a hacker in china, you dont get a vote. The ministry of Public Safety will come to you and say work for the government or go to jail. These hackers probably did not need much encouragement. China uses this system of both state hackers, what we would call spies, and these private individuals, criminals, who acted as proxies for the state. Longstanding story. Expect to see more indictments like this in the future. David you took me right to one of the questions i had, and that is could we do this alone . You say the Trump Administration has been tougher, but he looks to do things on a bilateral basis rather than multilateral. Chinese abuse of cyberspace without our allies . James no, you need a concerted approach. What is interesting, the japanese, the australians are pretty much there, the brits. The germans are a little bit on the fence. They are chinas biggest market, so they dont want to alienate them. If we pull on this together, you would have a strong front against china. The chinese worry about that, that maybe we will figure out having allies is a good idea. Until we do that, it will not be as powerful a response. The pieces are there, we just have to decide to put them together. David also in the news is secretary of state mike pompeo visiting the u. K. To address the ei and their use of 5g equipment. That is one of the things President Trump has emphasized. Are we in a battle with china over five g technology . The 5g issue gets back to chinese espionage. Huawei has been clobbered it, alleged, to be with chinese intelligence agencies. When you approach chinese espionage, you are also talking about huawei and 5g. Some call this a victory for secretary pompeo because the brits changed their mind and said they did not want huawei in their system. Some of that was u. S. Pressure, without a doubt. But you have this risk that many europeans are concerned about that china is stealing their intellectual property, building computing industries, and putting them out of business. Huawei is part of the larger debate. 5g will be the way that networks are constructed in the future, people will need to figure out how to make money from them, but if you have a chinese equipping company, theres a possibility they could be signed on. It is similar to the transition over the internet. All kinds of Digital Transactions are possible now than they were before. The question is, will you be dependent on china or western suppliers . Countries are slowly coming to the point of view that it is better to be dependent on the west. China will not go down easy on this one. China told jeremy that if you ban huawei, we will stop buying german cars. It is germanys biggest market, they cannot afford that. That was my question. The u. K. Is one thing. What about germany when it comes to huawei . James the germans are on the fence. It is an intense debate. Having talked to the minister of economics who thinks they should buy from huawei, and the head of the German Intelligence Service who shares all the concerns that we have about using huawei, you dont have a common position. Angela merkel has done the right thing, stalled, but the germans are on the fence. David really appreciate you being with us, james lewis. , we will speak to Penny Pritzker, former commerce secretary about this new proposal by Vice President biden about childcare. This is balance of power on Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. Im david westin. Later this afternoon, Vice President biden will announce a plan of 75 billion dollars for elderly care and childcare. I talked earlier today with Penny Pritzker about what this plan would accomplish. Penny when joe will be is a good jobs president. He will provide greater in ourty an economy domestically and internationally. His proposal today is one piece of that puzzle. He has presented a better plan for america, recognizing we have too much income and will disparity in this country. The plan that he has offered today, which is the third pillar of his economic plan, is focused on investments in childcare and elderly care. Helping americans be able to go to work, making sure they have a safe place for their children and for their elderly parents. David how many jobs are we talking about . Penny millions of jobs. I think the estimate is 3 million jobs just for this part of his proposal. He has also made proposals around manufacturing and innovation, as well as infrastructure and investing in the Green Climate economy. All of those have millions of Jobs Associated with them. Joe biden is really focus on the future that we get back to work, and get back to good working jobs. David what will this do as a practical matter for parents country . E take the childcare issue first, is this universal prek . Penny yes. He wants to make sure you not only have access to daycare but every child has access to universal prek, which we all know, every study shows children who get that kind of head start, if you will, have a better opportunity in their education. Tos is just a practical plan put america on good footing, to help all americans. Federalill this be a program or by way of block grants, delegated to states . Penny the specifics of how it is structured will be worked out mostlyress, but education is handled at the state level, the specifics of it. Governors welcome it. I have yet to meet a governor who said i want to be able to offer more care, more education options for the families in their states. This will be a Welcome Program across the country. David particularly right now given the pandemic, with people at home . With the horrific situation facing our country, we have the pandemic, now an economic crisis, a realization of the Racial Injustice weve been suffering as a country, and we need to stand up to all three of these crises and issues that are facing us. Joe biden is the right guy to do it. Ares proposing plans that very practical, that are stable, reliable. In the you are someone workforce, Business Leader, in the not for profit, you know how to plan. From oneeen careening idea to another idea with our current administration. Isoe Biden Administration going to stick to a well laid out plan, and you can rely on that, whether you are in our country or are our allies. Time, theree same are price tags attached to each one of these. This is 75 billion. How would that be paid for . Of all, folks like myself will have to pay more in taxes. There is also the ability to look at restructuring incentives so that folks can be able to take deductions, to be able to afford the kind of daycare, childcare, elderly care we are talking about. A mix of programs that we will be able to pay for this. It is absolutely doable, these are completely within the realm of possibility in terms of structuring both our tax and revenue plans for our country. David this third plank wood raise some revenue from commercial real estate investments. Changes on the tax treatment. You and your family have had a Fair Experience with commercial real estate. Commercial real estate right now is under stress because of the pandemic. What will be the effect of commercial real estate on prices in the markets . The most important thing in commercial real estate is to have a sound economy. If you think about commercial real estate, what do we do . We house the economy. A Strong Economy will drive value within the real estate market. The fact that we have a weak economy, huge unemployment, uncertainty, that is the problem for the commercial real estate business, not particular proposals by joe biden. With do you anticipate your friends and colleagues that invest in commercial real estate that they will buy that or will they resisted . Special interest has their own focus, but that is not the point. This is a time when the country needs to come together and recognize we have to build a better economy for our country, one that is more durable, works for all americans. Folks in commercial real estate, business, leadership around our country recognize that that is essential. We can no longer live with this massive disparity we have. We can no longer have a situation where health care does not take care of every american. We can no longer have a situation where americans have no idea how they will be able to go to work or get an education or be prepared for the jobs of the future. That is the other thing that joe biden is focused on, helping america be prepared for todays jobs and jobs of the future. You will hear more about that in the upcoming weeks in terms of upscaling, making sure we have the kind of training we need in this country to be competitive. That is more important than any particular modification in the specific tax policy. Apart from tax policy, commercial real estate is under pressure from the pandemic. Ls,ther Office Towers or mal there are questions. In your experience, what kind of longterm changes will we see in that market . Penny what i am hearing is that king what are rethin they will need in terms of their Office Real Estate footprint. They are recognizing that they can do more work from home. We have all learned to become much more technologically savvy. Mean that it is to the exclusion of having offices, but you will see shifts. When i hear from my peers in the ceo community, they are listening to what their workforce is telling them they need. I think you will see a shift in demand. I think our sanctuary cities will remain places of great. Nterest and great demand once we can get back to a healthy environment and a situation where we are not having to stay at home, i think youll see a vibrant economy in our major cities and in our commercial real estate. To retail, retail has been going through a change. Pandemic has hastened that in terms of how much we rely on ecommerce. , one of is something the things that folks in commercial real estate learned to do, adapt their properties. I think youll see change coming. David a little more than three months until the election. We see the polls, a long way to the election, but they are indicating that joe biden may well be the next president. Markets are starting to take that seriously. Talk to, what do you tell them a biden presidency will mean for the markets . Theres a lot of concern about taxes and regulation. Penny i think what a joe biden presidency will mean first of all is stability and certainty. That is what American Business leaders want to know. If i have talked to one, i have talked to dozens of my Business Leader friends who say i dont know how to plan because i cannot tell what to expect, because i dont know what are the rules. They keep changing. What are the circumstances they are facing . Certainty is number one and most important. The second is our relationship around the world. Whether we like it or not, we live in a globalized world. That means we have to work with our allies. It is extremely important that we participate as a country in the major issues facing our planet, like climate change. David former commerce secretary Penny Pritzker. This is bloomberg. David this is balance of power on Bloomberg Television and radio. Im david westin. Unidentified federal agents have been showing up in portland, oregon in the demonstrations out there, doing what appears to be police work. President trump says that he may do that in other cities like chicago and baltimore. We welcome josh wingrove. What is going on . The federal government has the power to protect federal buildings. They are using that as almost a trojan horse to force officials into portland to guard the courthouse, which has been the site of much of these rolling protests, which had elements are riding in them, over the course of the last 50 days since the death of george floyd. They are pulling people from dhs, border guard, making them into essentially courthouse guards. They have the power to defend the courthouse and arrest people who try to damage it. The question is how far they can go. If they see someone throw a can of paint at the courthouse, it looks like they are chasing them through the city and arresting and attaining them. This raises questions about whether Fourth Amendment rights are being violated. Some are being detained without charge. They are not identifying themselves. Driving unmarked cars. Striking, are quite evokes things that you would not associate with a democracy, but it is part and parcel with the president s contrasting of what he tries to portray as democrat lawlessness against his push for law and order. He is really leading into this, saying we expect chicago and other cities to be next. Although it could be different, it would not be protecting a courthouse, they may try to team up with Law Enforcement. David one of the things that we generally want, particularly in the wake of the killing of george floyd, is accountability from the people policing us. If the marshals are protecting the courthouse, and there are Prison Guards are being used in washington, that may be, but who is in charge . But we reallyhs dont know. This is opaque by its nature. The federal government has come responded to school integration. Do feds have the power to some of these things, but the mayors in portland saying that they dont want them to do this. They say they are making things worse. The president says you are not stopping the protests, we are going to stop them. Of course, a controversial figure. It presents a perfect test case for him to do this, to send in these troops. They have a culture of protesting there. They are not going to go away. President trump, four years ago, was running on building a wall along the mexican border, and now he is troops away from the border to protect a courthouse in portland. Fascinating story. Thank you, josh wingrove. Coming up on radio, we will take up the question with judicial 10 and her nomination to the Federal Reserve board of governors. That is coming up later on this afternoon. This is balance of power on Bloomberg Television and radio. Vonnie it is 1 00 p. M. In new york, 6 00 p. M. In london, and 1 00 a. M. In hong kong. Im vonnie quinn. Welcome to bloomberg markets. Here are the top stories we are following from around the world. Another round of stimulus negotiations. Steven mnuchin is on capitol hill to begin legislative talks with both parties. The white house and congress only about 10 days to come up with another government before Economic Relief dries up. Glance into how much it has been helpful and can it to be needed across industries. Groups adamrmr portnoy. They have properties ranging from hotels to gas stations. Cocacola says it will get better from here. Their Earnings Report shows incremental improvement in sales. Lets take a quick check on the markets. The dow nice balance in in particular, bowling among those