Outweigh things Going Forward. They not think the fed will step up. And is off the table for now. I do not think bonds are attractive. More. greg has what is the bid is biggest crack you see emerging . Greg probably a another turned on in the economy, covid19 is damaging the fundamentals of corporate america. I think it is a negative story you are telling in the abutting, but supply is getting absorbed in the marketplace. There is a Strong Demand for retail, from overseas investors, and the cost in the hedge has come down. Supplies are actually being absorbed. Taylor this week we set a record investmentgrade issuance for the year and it is only midaugust. It is the market digesting this healthy amount of supply within the corporate investmentgrade bond market . Greg 1. 4 trillion dollars is the number you are talking about, the most that has been issued, and we are only in the third week of august. We think the supply will come down toward 80 billion a month, but that is still quite a bit. The market is still there. If you are a corporate treasury, you would be a fool not to issue this debt with a coupon on the 30 year issuance. That is very cheap money for apple. But on the buy side, looking at market money funds at two basis points, 240 is not bad. Taylor what about the spread right now, the bloomberg investmentgrade spread, is that appropriately priced . Greg probably not. It would be justified in an economy not in a recession. In terms of a market where the fed is supporting the spreads with their secondary market purchases and is a Strong Demand from those investors i talked about, it is probably appropriate. In fact, there is potential and room to tighten. Taylor do you worry that the fed is creating Zombie Companies . Greg i do not think so, they have only been buying investment grade. They are not going deep in terms of the quality structure. I am not worried about that, but accruing tooare much interest right now. Taylor i want to talk about the broadening issue of more debt on the balance sheets. We were not sure if companies coming into the pandemic the pandemic showed if we spend money on buybacks, instead of shoring up the balance sheets, we were not prepared with cash on hand. Now we are loading up on debt because it is cheap. Is that increasing the heavy download debt load and it slow down growth . Greg it depends. They have been using it prudently. I did a story earlier in the week, you know, if you are a corporate treasurer, what happened in march security because you do not know if you could tap the market again, so now youre issuing and extending the nearterm maturities. We expect to see shortterm maturities deeper in the year. They are trying to do prudent things with cash on the balance sheet. If they begin to pay dividends later on, it will be a leverage issue, but that is farther in the future. Taylor that similar theme applies as we go into full faith and credit. We had a sloppy bond auction that was a sloppy with the 30 year, 20 year with less than stellar demand. Is the market having a tough time digesting what they are seeing from the treasury, and deficits . Its august, it is slow. But i think the market recognizes there is debt issuance coming, and with the fed to support it you might see more backup. We are looking between 5585 basis points on the 10 year. Will we go further than that based on supply . No. Taylor want to transfer that over global. You had germany offering a 30 year auction, getting healthy demand and issuing at negative rates. Why the divergence . Greg the ecb has a negative rate, the past deposit 50 basis points. And it could go lower. I do not think the fed is going negative. They are at 12 basis points, that is as low as they go. It is political. You destroyed pensioners and community bankers, so it is not something the American Economy is willing to accept. Yield, negative real given this is the real yield show, of 1 , what is that telling you . Greg that there is capital out there that is looking for a place to stay. I would be careful about the last 20 basis points. The fed is upping their purchases and they are pushing that yield down, so absent the fed it is more like 50 basis points. So with the fed supporting the marketplace, it is something that we watch. It could have negative implications in the equity markets. Taylor i want to move on to the final spread, which is the week ahead. Next week, the Republican National convention is kicking off, Consumer Confidence on tuesday, durable goods on wednesday, President Trump speaking at the rnc, and jay powell will deliver a speech on thursday at jackson hole. Thursday, anything surprising after the fed Meeting Minutes that you expect to hear from jackson hole . Greg we really dont. I know they are going to talk about policy framework. They talked about averaging, looks like they backed away after the july minutes. There is not much of the fed can do after the heavy artillery of march, so anything Going Forward will be small. I think the fed wants to wait. Taylor rapidfire, three quick questions. I am putting you on the spot. Yield curve control, september or 2021 . Greg 2021. Taylor high yield spreads, 400 or 600 next . Greg 400. Taylor 63 basis points for the 10 year now, going down or up to 1 . Greg i would say 50, given the spread range. Taylor thank you for joining us. That does it for us. We will be back again. I will be here. This was bloomberg real yield. And this is bloomberg tv. Welcome to bloomberg markets. We have a stellar guest line up. We will talk with tina fordham about her takeaways from the dnc. Plus, Harry Broadman is currently chair of the emerging youets research group, and will join us on trade. And fighting words from donn davis from the professional Fighters League on how the pandemic is packing a punch to mixed martial arts. Comeback. Making a donald trump has a pledge from the European Union to end tariffs on american lobster, part of a deal that could help donald trump in maine, part of why he took such an interest in lobby. By, the lobster it is a big industry in maine. And the secret Susan Collins is up for grabs. This deal will provide relief to maybe 10,000 fishermen and support crew in the industry. China is the second largest importer of u. S. Lobster, it has imposed a 25 retaliatory duty on u. S. Lobster, and that has decimated the industry. The only thing now is, what does the u. S. Given the European Union in response . There was a threat of putting tariffs on car imports, will that go away . We will see. But letss weaker, look at the s p 500, up 1 10 of 1 . The nasdaq doing better than that. The dollar is stronger today. Deere is the best performer in the s p 500. And joe has accepted the democratic nomination. Lets get to somebody who can talk to all this. But first we will hear from joe biden himself. Joe biden the current president has cloaked america in darkness for much too long. I will be an ally of the light. As president , the first step i will take, get control of the viruses that has ruined so many lives. I understand something this president has not, will we be the generation that finally sests out racism era racism from our National Character . I believe we are up to it. It is long past time the wealthiest people and biggest corporations in this country paid their fair share. We will deal with climate change. Ans not only a crisis, it is opportunity, an opportunity to lead the world in clean energy. The day of cozying up to dictators is over. United we can and will overcome this season of darkness in america. Vonnie joining me is tina fordham from avonhurst advisory. We heard a little bit of everything last night. Not so heavy on policy, but name checking all the hot button issues that will need to be addressed by the democrats in this cycle. Does it joe biden fare, come across as a leader . Tina this was a crucial debut for much of america for the Democratic National convention. And joe biden has one key task, that was the hippocratic oath. The first being, do no harm. That is for a majority of americans who claim that they are supporting joe biden, doing so not because [indiscernible] and i think that second one was just being competent with composure. He says he will get the job done, bringing the country together in this dark and a challenging time. Vonnie if you are on the fence, would last night have convinced you that joe biden could be someone you connected to . Tina there was something for everybody in that speech. He had the democratic touch points, but also quite a few the, as i see it republican establishment points, and that was also demonstrated by the presence of so many republicans at the dnc. Squarely at the middle ground. Identity sole] much as just the heartland of america, and arguably that is where democrats really failed last time. Vonnie we are going to call you back, because there is crackling on the line, but your thoughts are important for us to us. Willis tina fordham, who stay with us. A programming note, starting on monday bloomberg will have special coverage of the Republican National convention. That kicks off at 10 00 p. M. Eastern. Still ahead, teslas market value surpassing walmart after an astounding thirdquarter. This is bloomberg. Vonnie this is bloomberg markets. Abigail doolittle is talking about tesla, the stock of the hour. Abigail it closed above 200 per share for the First Time Ever yesterday, and over the last eight trading days, up 50 , this since they announced a five for one stock split for investors wanting in. They beat delivery estimates. Another momentum stop that put up a Strong Quarter was apple. We have tesla actually beating apple since the four 41 split, up 27 relative to the 50 from tesla. So, folks want in on these momentum stocks. As we go into the terminal, we can see that the higher stock prices we have seen recently have not been leading to more splits. There are only five this year, tesla and apple, old dominion, as well as Brookfield Management and one other, pretty interesting. So what is leading to tessas stock split is probably the incredible run and has had this year. Take a look at this, out of the march lows, this is actually a one year chart, up 842 . It is incredible, especially considering around one year ago the company was questioning whether or not they had sustainable profitability. Stocksk in the day when used to split, and had to do with once the stock reached 100 but not anymore. We take a look at those in the s p 500 that are over 100, at , back in 2005, 10. It has to do with the individual performance with these stocks. And with tesla above 2000, that coming after the announcement of the split, it is really tesla, the engine that keeps going. Vonnie thank you. We are back with tina fordham, head of Global Political strategy at avonhurst. We were talking about the Democratic National convention, which has wrapped up. Now we have their president ial and Vice President ial nominees. What will the rnc take from the dncs week in order to turnaround what seems like goodwill . Tina i think they will take away how difficult it is to pull off a compelling convention without attendees. I found it very odd to be watching the speeches without the usual scenes of people from different states, the placards and the applause. The viewership was half of what it normally is. And some of the kind of attempts to have different voices just did not work, so i think the thing the republicans will take away is the need to make sure you have more compelling content. More than you might need in a live event, because it is a challenge. They will also need to counter the fact that there were quite a number of wellrespected centrist Republican Party officials at the democratic convention. That means that donald trump will have to do more than what he was comfortable doing, and that is playing to his base, which he does extremely effectively, but it would not be enough to get him reelected. Vonnie at the moment, joe biden is ahead in most polls, the as we know they are fallible and polls can change on a dime. What will joe biden and his team, and everybody around him from barack obama to bill clinton and all others, need to do in the coming weeks to solidify the leader that is out there right now . Tina well, the traditional response would be to get out the vote. Democrats outnumber republicans, arguably this very reason that we are likely to see a lot more contested outcomes, efforts on voter suppression, the u. S. Post office challenge, and all of these kinds of things. More democrats voting will put them over the edge. And because the way the electoral system is constructed, democrats need a bigger turn out to get their. We have seen there. We have seen two locations with the democrats have won the national vote, but failed to win the electoral college. This is not a traditional election, though, between the pandemic and other factors. Vonnie what do you make of the now, given that this election might hint on the u. S. Postal service . The postmaster general is at next monday. Y and saying you can count on us to carry out your election for you. Tina it is extraordinary. Americanng this as an living in london for the past 20 years, and advising International Investors and corporate, its really something to look at this story of a political appointee being put in charge of the u. S. Postal service, and all of these debates, the u. S. Makes it more difficult to vote than any other developed market democracy. This is the kind of thing that i think americans fail to appreciate. We also just will not have much time before the elections happen to resolve the machinery. Thats why i have said one of the biggest risks about the u. S. Elections in november is what i malfunction,oral whether the technology, going back to the hanging chads a long time ago, or Supreme Court cases about actual charges of suppression, or simply contested outcomes for me, that is the single biggest risk of the election, not whether red or blue is the winner. Is the best case that we even get a result this year . Tongue in djitte, i have been in cheek, i have been writing about the possibility that we could have a venezuela style outcome, where the International Community recognizes one outcome, and the officeholder, you know, refuses to do so. We could also have a long gap, possibly weeks or months. Its unclear how the markets would react to a disputed outcome or a delayed outcome. I do not think that that would extend into january, by the way, but it is this lack of clarity, ad along with that a lack of risk of legitimacy about the outcome that really bolsters my suggestion that we need to be most concerned about the democratic machinery around the selection. Vonnie that is fascinating. One question on brexit, do talks get started anytime soon . Tina they will get started. And, frankly, the hiatus at the end of the summer and a sharp remarks from brussels that perhaps the u. K. Was not serious when it said it wanted to accelerate things. This is all par for the course. It will come down to the wire, as ever, but the u. K. Will leave the eu in december without a deal. Vonnie thank you for joining us. This is bloomberg. Mark im Mark Crumpton with first word news. The postmaster general says election mail will be delivered on time. Told the Senate Homeland security today that his agency is capable of handling what is expected to be a Record Number of mail in ballots for the president ial election. The Postal Service is at the center of a political fight between democrats and President Trump over voting and the integrity of the november election. There are new signs of the coronavirus pandemic may beginning to slow down in the u. S. The u. S. Has reported fewer than 50,000 new cases for six straight days. The cdc says that the deaths should start to drop soon, as estates and universities do more to contain the pandemic. The total cases in the u. S. Are at more than 5. 5 million, according to data compiled by Johns Hopkins university. More than 174,000 americans have died. Pressure is growing on hong kong to open its economy