R justately ben laidle calls it a q4 melt up to come. Jonathan pointing out that the u. S. Election volatility could fade. The data might continue to improve. The market might grind higher. But the numbers we are seeing from some of the big employers around the world are not pretty. Tom terrible. I am so glad you bring this up. Horrific, but once again, you separate stock market activity from the social cost we are seeing right now. Jonathan 90 minutes away from claims data, lisa. Lisa we will be finding out a backward look at the latest claims. I say backward look even though is a weekly initial claims that i because we will also be getting a backward look at the income people received in the month of august. One thing i will be watching is the copious amount of additional fed speak. I want to know how much stress they are seeing within the banking sector. And then the theater in washington, d. C. Continues. Steve mnuchin and nancy pelosi continue to talk. Is this just theater, or is this real . Jonathan it is fiscal headline relet in Financial Markets as we try to get you. For the opening bell. Equity futures are firmer on the s p 500. We drift higher by almost zero 9 , almost 29 points almost 0. 9 , almost winning nine points. On the 10had a move year treasury yesterday as we continue to get this talking d. C. Is it just happy talk, posturing ahead of the election . Where are these guys looking to close the gap . On the bond market speaking the 30 year bond. Look at the, you bond move, and i am still looking at they really yield, 0. 94 . It is a very dynamic, and i am going to suggest this jobs report tomorrow sets us up for a reaffirmation of that i if they are of that dynamic if they are benign reports. Jonathan still in the middle of that range between 50 to 90 points at their points right there. Joining us now is Philip Camporeale of jp morgan investment management. Help navigate d. C. Right now. It is headline around headline of fiscal talks. How do you process those headlines, phil . Fromp the gloominess september, the really bad seasonals were all changed on a dime because of the realization that we believe fiscal talks, a fiscal plan may get delayed, but this is happening, along with some pretty incredible data. Chicago pmis, adp payroll report better than expected, setting us up for a really nice payroll report coming on friday. Theres no sign we are in a new cycle, and that is the signal. It is not the noise coming from washington. Tom how do you make the separation . Phil it is a really nice spot to be a multiit a multiasset investor right now. Theres two sides, the 60 and the 40. On the equity side, we are diversifying our overweights. This is not just a u. S. Exceptional us to story. We believe this is a new global cycle. In 2021. Will emerge however, you cant be blind to the noise we are seeing from the election and from fiscal. On the 40 side, it is a credit story. 10 year treasury notes are not moving. 10 year treasury notes are not really going to protect the equity allocation. We believe credit is a great place to be in the investment great side, the securitized side , and highyield. Those three things make up 75 of our fixed income. If you think about what the aggregate is, that is 85 Government Bonds, so we are making a big bet on credit because Government Bonds arent moving. Lisa this is the consensus, that we are entering a new bull market. How consistent is the build up corporate and Government Debt with the buildup of a bull market . Phil the thing we keep a close on is and close eye how much is building up. If debt affordability specifically, whether you are a homeowner or a corporation, stays at these levels, than the grandmaster Jerome Powell is doing his job. The transmission mechanism is working. And we dont believe that is bad debt if it is affordable debt. I think that is a really important key going forward. The 10 year treasury note is a big driver of our portfolio construction, whether it be value stocks, credit, or bond durations. That is how we are incorporating your question into is it a good signal or a been or a bad signal. Jonathan grand master powell, and your words, doing his job. The job hasnt been done down in d. C. Now we face more layoffs. You see the headline every day, every 24 hours. Storycial stigma, the pr is not the same. These Companies Feel like they need to change how big they are, and the answer is smaller and smaller if you are not a muslim. How do you not amazon. How do you process that at the moment . Phil it is certainly emotional, to say the least. I will say that no one knows what a recovery from a forced recession weve never seen this. Our colleagues have never seen this. 30 plus contraction in the second quarter, followed by a 30 plus increase in the Third Quarter in gdp. No one has ever seen this. While those are todays headlines, it is impossible for us to judge. I made that joke about grand master powell. Even he got that wrong. He missed the gdp forecast for 2020 by 3 . So it is impossible to just incorporate these headlines into what we are going to see going forward. Tom where is your allocation of new assets right now . Ben laidler has been shockingly prescient about when markets move. You know all of the gloom that is out there. Where is your marginal allocation right now . The the answer phil into right now is credit. It is not quite equities because of the noise in the election. October is the secondbest month seasonally of the year, dating back to 1995. We are heading into a very returne cyclical s p 500 seasonal story. But to answer your question directly, the marginal dollar has to be in credit. That allows the staying power, to stay in the market without having to be in those rates in cash and Government Bond rates. Lisa how risky are you willing to go in credit . Phil this is a story that we have about 10 deep about 10 dedicated to highyield. People think that is risky. However, if you pick your credit right, if you go up in quality to answer your question, we dont be torpedoed we dont want to be torpedoed. We are looking for highyield for the carry, and that is what we are able to get. Jump into energy stocks. Were just trying to get some carry from highyield, which we think, like it did in september, can go down vest on the equity market if we see some volatility coming ahead. Jonathan i just hear double i justjust here hear bbs. Is that the sweet spot . Credit thatg the can be upgraded to investment grade, that is something we think we can do, and that is what fundamental investors should be invested in as we push forward to the beginning of 2021, when this cycle that we believe has staying power, irrespective of when the fiscal headlines resolve themselves, that could be a pretty impressive return for us within fixed income. Jonathan great to catch up. Send our best to the team. Phil can verrilli Phil Camporeale there. This is very different to the conversations we are having with market participants. Hasnt that been the truth for the last six months . Tom i am glad you bring up the timeline. We are going into Fourth Quarter right now, and the starkness here on october 1 is stunning. Laidlers like 10 ben out there looking at the vix under a 26, going, where are we going to be in 90 days . Theres that knowledge to it just gets better. Jonathan im still in march, dazed and confused, with people telling me things will reopen in may, then june. Where did this year ago . Tom thats true. The year has been truly traumatic. Ian bremmer on with us with some great reporting. They did a great report on the mental exhaustion from a global pandemic. I know you see it in england as we see it here in america. Maybe we witnessed it in that debate. We are staggering into q4, and yet i would suggest the market is separate from the economics and from some of the social discussions out there. Jonathan i would suggest maybe you shouldnt write a year ahead outlook piece for 2021 yet. They are usually written october, published late in november into december. I dont think this is the year to do that. Tom you see that in the budgets, too. How does a corporation plane for q3, q4 next year . Jonathan coming up, new Jersey Governor Phil Murphy will be joining us in the next hour. A conversation you dont want to miss, right here on bloomberg. Ritika with the first word news, im ritika gupta. President trump signed stopgap legislation that will keep the government operating at current spending levels through december 11. The Spending Authority expired at midnight. Neither democrats nor republicans wanted a shut down weeks before the election. House Speaker Nancy Pelosi and treasury secretary Steven Mnuchin say they made progress on a compromise stimulus bill. They claim to continue negotiations. Managing says he sees mnuchin sees an agreement costing as much as 2. 2 trillion. The Federal Reserve has extended its unprecedented limits on wall street banking. Buy caps wont be lifted until the end of the year. Plus, it says the banks need to preserve capital. Jp morgan had already indicated it wanted to resume share buybacks. The president of the tokyo Stock Exchangeel it i apologized after the worst outage in its history. The Stock Exchange was down for the entire day after a hardware breakdown. I am very sorry our notification system failed. Prioritize our time to find out what issues led to this. We are very sorry for that. Ritika the Tokyo Exchange says it will resume trading on friday. The European Union has started legal action against the u. K. Over brexit. The eu will send a letter accusing the u. K. Of breaching the terms of agreement and breaking international law. It is the first step in a process that could end up in a lawsuit at the European Court of justice. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Most likely, the winner will be contested for weeks, if not for months. So a 10 correction because of a veryf you have contested situation. Jonathan in my you stern school schoolness nyu stern of business professor there, also known as dr. Doom, or professor doom. Mr. Boom versus mr. Doom. On the one side, Prime Minister boris johnson. On the others, the chief who had aat the ecb speech out yesterday titled avoiding economic anxiety. Heres just a part of it. Averting an economic anxiety newsk requires encouraging need not be drowned out by fears of the future. I think i know what hes saying. I am not saying this is what hes saying, but i think there is a suggestion that even if you are anxious about the future as a policymaker, you should focus on the good things happening now , and perhaps that will instill a little bit more confidence in society. I dont know if that is the best approach, but he made the case in the last 24 hours. Tom you worry about the present tense, and over the past 10, 15 years, just the general phrase Forward Guidance has been invoke. Do you think we have has been in vogue. Do you think we have worn out the crystal ball at the Federal Reserve . Jonathan i think Central Banks are wrapped up in the future five years down the road, trying to tell this market and people that they wont be hiking rates, they will tolerate higher inflation, when people are focused on the here and now. They want to know what they will do if things get worse and how they will support the economy over the next few months, not the next five years. Tom kevin cirillis timeline, as you know, is the here and now of thursday afternoon. Nancy speaks to david westin at 12 00 known today. Pelosi speaks to david westin at 12 00 noon today. Our chief washington correspondent back in washington. Senators andblican republican members of the house and the republican Broader Community saying to the president on this thursday . Kevin senator tim scott from South Carolina said yesterday he think the president needs to clarify his remarks with regards to race that were made during the first president ial debate. Ofhink the races in terms the battleground states, if you look at iowa, you look at kentucky, South Carolina, where Lindsey Graham is in a tough battle, i actually think those republicans are in a better position more so than the president , should the president not be on the ballot. What is interesting here, and this is what strategists dont know, is how President Trump at the top of the ticket and joe biden at the top of the ticket will impact the down ballot races, and whether or not youve got democrats in some of these states who are just going to check off all of the democrats on whatever side of the ballot they are on. Tom does President Trump have the resources to campaign . Forget about november. Does the have the best does he have the resources to campaign until october 15 . Tom he has a lot of money kevin he has a lot of money at his disposal, but they have shifted money around in battleground states in terms of their strategy. The Debate Commission is now reevaluating the procedures for the next president ial debate in about a week and a half in miami. It is a town hall format. It will be fascinating to see whether or not there is a change in the sense of the next debate. We should note that tv viewership for the first debate was significantly lower than previous cycles. Lisa do we know what those changes are . Is it going to be muting mics . Kevin thats what they are talking about, but i dont know how it would impact the flow. I think, just given that it is a town hall, because people will be asking the questions as opposed to a moderator voters is the better word choice voters will be asking the questions, it lends to a more contained question and answer moment. So hopefully that would move things along. Jonathan did anyone come out of that debate that it benefited them to act that way . And if they did come out of that rate thinking it didnt benefit them, why dont they change their approach in the next debate anyway . Kevin i spoke with sources on both campaigns yesterday. I think the democrats felt that after thatemboldened debate, and the source i spoke with on the president s Reelection Campaign said to me that they did not think that strategy help them at all. Tom im sorry, i was muted. That is ferro muting me in london. Jonathan ive actually gotten on my phone now. [laughter] tom thank you, jon, for letting me speak. Thats very kind. Im sorry, kevin. How is biden doing . Hes on the train yesterday, raising money. How is the Vice President doing . The perception is it was a success. Does he feel that . Kevin i think there is an uneasiness. Just as everyone experienced in 2016, i think when i talked to republicans and democrats, there is uneasiness and this expectation that the election is on november 3, but there is going to be political events after that, whether it is you know, even in the local press reports in cleveland, the local municipalities in ohio are talking about whether Mark Zuckerberg should be funding poll workers at a polling station, and the entire dynamic about whether to accept money from facebook. Microcosms ofe polling stations and whatnot, all of that is contributing. The pandemic is contributing to this sense of uneasiness about Election Night in america, and should we start calling and election months in america. Jonathan or election months, which is something people on wall street are worried about. Before you go, my characterization of things, the standoff that appears to be taking place between the airlines and secretary mnuchin right now. What is the stand right now . Kevin theres consensus that they need additional funds, but theres not a vehicle for them to do it. They continue to say they are having ongoing negotiations, but at this point, those businesses are now forced to make tough decisions as a result of inaction in this town where i am. Jonathan kevin, great to catch up. One hour, five minutes away from initial jobless claims. Dobbs has got to be the focus as we go into the weekend. Question about that. I really think jobs report has been undersold. A great story yesterday on the percent of unemployed. I am totally confused, and please dont mute me. Arsenal playing liverpool, but it is not premier league . How is that possible . Jonathan there are cup games as well, not just the league matches. Tom when the red sox play the yankees jonathan i dont think the 20 seconds weve got here is sufficient enough, and i love this little volume button ive got on you. Just beautiful. From new york and london, this is bloomberg surveillance, live with tom nicely muted, how we want to keep them for the next hour. Jonathan from new york and london, this is bloomberg surveillance. Radio, oomberg pvm live on bloomberg tv and radio, alongside tom keene and lisa abramowicz, im jonathan ferro. Eyes going to payrolls friday. We advanced 0. 9 . Hello q4. Q3, we advanced 8. 3 . September was not great, the. Firmer euro in the mix, and there we are at 0. 7 on the u. S. 10 year. We have a move, though i should emphasize that it is 70 basis points, still slap bang in the middle of the range. The low end at 50 basis points the high end at 90. That is the midpoint. Tom the conversation today, david westin with Speaker Pelosi in the 12 00 our, you really wonder if they can get closer to stimulus. Jon, i look at the markets here and i love the idea of gina martin adams, that youve got to participate to play. You have to participate to win. You mentioned this earlier. Where were we all in february and march to get on board equities looking out six months or a year . Jonathan worried about the future. It is just human nature. You worry about threats around you. Thats what you do. Secret of the last 10, 15 years has been to try to focus on the upside risk as well. To be clear, this economy in america has recovered in a way that some people didnt anticipate. The momentum followed through deeper and deeper into summer. The question remains whether we can do that into yearend. I think the job cuts we are starting to see are a different phase. Companies in the depths of that pandemic wanted one thing, liquidity. Access to cash. Later on, you look at how big you want to be, and the answer right now is smaller for many companies. We are starting to see those headlines across the screen. Tom salesforce down off of that correction of a couple of days ago. What do bonds do in the Third Quarter . How are they positioned . You mentioned bbb earlier. That is stuff. How did they do . Lisa they went gangbusters. They had an incredible three months, and this is a flood of cash into credit. Going back to something jon said , people worry about the future. It is sort of the opposite now. They have faith that policymakers will rescue them, whether it is the Federal Reserve or washington, d. C. That is a little bit concerning, of course, because im lisa the bear abramowicz. Jonathan you are owning it. I love it. Tom Jim Osullivan with us of td securities, who has to sort all of this out. You know from chapter 23 of econ 101, the markets it out front. Are the markets signaling a better economy in q1, q2 of next year . Jim good morning, everybody. I would think so. It is hard to say, but there doesnt seem to be a lot of optimism priced into markets. I dont think people expect to see the strength we just saw any Third Quarter to be repeated going forward, but clearly people are assuming that it is up and pretty solid from here. I would say the risk is that people probably are a little ahead of themselves from that perspective. Tom the recovery is the idea of getting back to the trendline we were on in january or february of this troubled year. How long does it take us to get back to a constructive trendline . Is it quarters, or is it years . Jim we would say years. In terms of getting back to the level of gdp we were at the end of 2019, that could well happen during 2022. ,ut of course, in the meantime if trend growth is 1 to 2 a year, it is lower than that. How long before we see something close to 4 again . Projectionthe feds has been hitting that level at the end of 2023. I think that is plausible, but it is probably being optimistic, if anything. It is probably even later than that. Jonathan initially, they were looking for something north of 9 on the on, drake. Talk about that correction down to eight. The positive move we have seen in a very short amount of time, and how much harder it will be to get from 8 to 4 . Jim trump is right in the sense that we have had a record recovery. Certainly, the numbers over the last four months or so have been stronger than we expected. Gdpolls up, thirdquarter at a 25 annual rate. They are record numbers, no question about it. But of course, employment is down 11. 5 million from where we were in february. Plus, as you are touching on to momentum seems to be fading. There is no question momentum is slowing relative to Third Quarter. Tomorrow, with the unlimit report, we think the best the unemployment report, we think the numbers are tilted we think the unemployment report, the numbers are tilted towards a weaker number. Jonathan that is what i wanted to touch on with you. A quote that stands out for everyone at the start of summer, jamie dimon said, this is not a normal recession. The recessionary party will see down the road. I am sure hes alluding to the fact that because of fiscal action, we didnt have the income shock. Where are we now in terms of disposable income and the amount of cash in the hands of consumers, even as this fiscal package fades into the background . Jim there was a huge increase in income, even as employment plunged, with the plunge in the economy. Even now, income is coming off a little bit, and is going to be down again and this mornings report for august, almost certainly, as unemployment reports were down on the month. But there is still a boost from various fiscal support. Within consumer spending, good spending is stronger than before the crises, but the overall economy is nowhere back to where it was. Certainly, the stimulus part is fading. That is why these talks are going on in congress of do we get another round or not. Absent another round, it looks like fiscal stimulus is waning to the point where it turns into a drag in the Fourth Quarter. Lisa how much of a drag . But it is hard to quantify, the cbo puts out calculations based on current baselines. They say that fiscal stimulus goes from adding 13 points to the annualized growth rate in the Third Quarter to subtracting seven points in the fourth and six points in the first. Those estimates come with wide uncertainty bands, but i think the direction is pretty intuitive, just when you look at the flow of cash outlays from the treasury. They surged, and now they are coming back down again. Lisa how do you trade this, given the degree of uncertainty and the wide range of outcomes . I guess my jim focus is more the pure macro. I think in general, the backdrop here is such that the fed is going to have to be highly accommodative for many years. You trade the ups and downs in bond yields, certainly. The news flow can go up and down. I think people will be disappointed by the report tomorrow, but the broad thrust is that Interest Rates are going to be low for many years. Exactly what that means for the equity market, there is so much more that comes into it, the politics, how people react to the election. There is a lot there that people have to worry about. Tom when you look at this jobs report and look at the all american experiment, it comes down to potential gdp. Have you lowered your potential gdp off of this pandemic . Jim i cant say i have unofficial number of potential gdp. To some extent, it has moved in terms of the next year, two years. The whole idea of full employment has been deemphasized in recent years, but to the extent you see full employment of the economy with something in the 4 range for the unmeant rate, we are so far from that right now that it has moved. It is going to be several years probably before we get there. Run,urse, over the long both of those have slowed in recent decades. Theres nothing recently to suggest we should be marking those numbers up again. The cbo just came out with longerterm numbers, last week or the week before, and marched down there longerterm projections. An officiali have number on potential growth, but when you are arguing whether it is 1. 6 or 1. 9 , and gdp is down as much as it is right now, i think it is moot. Ultimately it becomes a factor again in terms of what is employment, but given where the unappointed rate is, we are clearly far from potential and feds moved from the perspective. Jonathan ahead of the payrolls report in america, you kept saying you expect the downside surprise. Estimate, 8. 72 . Audiencelly for our that are familiar with you, you are a very accurate forecaster of payrolls. What are you actually looking for . Jim weve got 400 total payrolls. It will be an important detail in this report, private versus government. Weve got private up 600,000. One issue, usually there is a surge of employment back up to government books, to the extent you get fewer than usual this year, the seasonal factors will overcompensate for that. On private, weve got 600,000. So they are positive numbers, but if you look at total payrolls, there are 4. 8 million in june, 1. 4 million in august. If you get Something Like 400,000, i think people will extrapolate and start speculating about the possibility we get a doubledip in the Fourth Quarter. Jonathan the deceleration story. Jim, great to catch up. Thank you. 8. 70 is your median estimate. Jim osullivan looking for something around half of that. Andy doubledip, not the first time we have heard it. The potential, the prospect of a doubledip. Tom doubledips are frightening, like the 1980s. They dont look big on the chart , but you get the exhaustion of quarters and quarters, even with a recovery between. Doubledips are not so much about the size of the slow as the length of it. Jonathan coming up, new Jersey Governor Phil Murphy answering some of the questions on the virus, his economy, his state, and how to balance the budget. All of that coming up on bloomberg surveillance, live on bloomberg tv and radio. Ritika with the first word news, im ritika gupta. The president ial debate format will change in the wake of tuesdays chaotic showdown. A commission that runs the debate wont say what changes will be made, but says it wants to ensure a more orderly discussion of the issues. Joe biden says candidates should be allowed to speak uninterrupted. The Trump Campaign says the changes are moving the goal posts. The next president ial debate is october 15. Joe biden hammered President Trump on the economy during a train trip across the rust belt. Biden was speaking in seven cities through eastern ohio and western pennsylvania. President Trump Campaigned in minneapolis. The president signed an executive order aimed at boosting production of rare earth materials. It also would reduce the dependence on china. American and United Airlines will start laying off thousands of workers the next few days as scheduled. Both promised to reduce the furloughs if the government agrees to provide additional payroll aid in the next few days. America plans to lay off 19,000 workers. United will cut about 13,000. Goldman sachs is also resuming job cuts it halted because of the coronavirus. Bloomberg has learned the firm is starting up on a plan to a limited about 1 of its workforce, roughly 400 positions. The move comes even though goldmans core trading and dealmaking businesses are booming. Rollsroyce has been tricking has been shrinking due to the lack of demand from the jets it powers. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Than 120 countries. This is bloomberg. The economy took a deep dive, and it did come back quickly when we open things up, but naturally you would expect to see that come back be a little more natural. I see the real challenge as getting the last 5 of americans back into the workforce. ,onathan Thomas Barkin there Federal Reserve bank of richmond president. Tomorrow morning, payrolls friday. Heres the price action ahead of all of that. Your market open just around the corner, one hour and about 40 minutes away. 1. 1761, firm or by 0. 3 . Up 0. 9 . Plenty of talking d. C. About closing that gap between republicans and democrats. Upthat talk starts to bubble , treasury yields creeping a little bit higher at 70 basis points a little earlier. There it is at 0. 6988 . Tom pepsico out with betterthanexpected Revenue Growth and a view forward as well. Bond, 1. 48 . We could begin a three hour conversation with michael mckee, our economics and policy correspondent this morning. We are not going to do that, but we are going to go to a story that is boring and buried, but has huge symbolism. Michael mckee knows it. Ofthe fed, the vice chairman regulatory, mr. Quarles made an announcement yesterday. Michael this is something that certainly get investors attentions. Earlier in the year, the fed suspended buybacks for banks that have over 100 billions in assets and put dividends on a formula they somewhat there over 100rmula billion in assets and put onidends on a formula based what their Capital Assets are. The fed is looking out and saying that is a possibility, and we want to make sure the banks are adequately capitalized, so they voted to extend that yesterday for another quarter. The banks have already said they are expecting huge loans. You look at the j. P. Morgan chase, citigroup, and wells aside billion dollars. Tom is jamie dimon having a tantrum with his team because he is rock solid, and seven other banks arent . Are they just bundling them in altogether . Michael every bank is not equal, and the largest banks have the largest systemic risks to the economy, but in general, the fed says the banks are wellcapitalized and it shouldnt be a problem. Thomas barkin told us that yesterday in our interview. But they want to make sure that if the skies turn cloudy and dark again that the Banking System is in good shape, so they will extend this for one more quarter. It just means the banks are probably more upset over the fact that they cant buy back stock when it is so cheap because nobody once to buy banks right now. Jonathan governor brainard dissented and said capital distributions would create significant risk the banks will need to raise capital or curtail credit at a challenging time. But i havent heard enough discussion on this morning is that governor brainard gets a whole lot more interesting as we get closer to this election. That could be a future treasury secretary essentially saying she doesnt think there should be any dividends or buybacks whatsoever. Michael michael she has been this. Trict on shes the only real democrat on the board that is left, and she believes that the banks should retain capital because there is a danger out there, and that Bank Capital Ratios should be higher. It will be interesting to see, if indeed she were on the shortlist for treasury secretary , whether she would bring those arguments not just from the fed, but to the banking regulators that the Treasury Department supervises, including the comptroller of the currency. Lisa this may be a conversation on going the next two weeks as we have a drumbeat in the bank earnings. How much will they become utilities following this recession . I do want to talk about the dissonance between the bearish view, based on how much money to cover loan losses, and the fed conservatism with the markets, with stocks that have been going gangbusters in credit. Given what we are expecting to see with the job report in less than 40 minutes, how much is the economy turning then perhaps turning faster than perhaps people are pricing in . Michael we have seen a faster come back then perhaps was expected when we were just coming out of this. Jobless claims, 850 thousand is the forecast for this morning. We will see if it comes in lower than that. The issue is that because all of the c. A. R. E. S. Act stimulus for the economy has pretty much expired now, you saw these job layoff announcements yesterday. The airlines can now lay off people starting today. Things are going to turn bad again. People have been reluctant to invest in banks because really, what they have been doing is making money on trading revenue, and that could turn south. Lending has not been really profitable except for in the mortgage area, so there are concerns about where banks would end up if the economy got dragged down again, particularly if something went wrong in the stock market. Lisa when we look at tens of thousands of job cuts that have been announced, is this creative destruction, or is this just destruction . Michael for the most part, it is just destruction. The old theory that modern businesses will supplant those that can no longer keep up, and everyone thinks of the buggy industry when we invented automobiles, but this is just jobs lost because we shut down the economy. It is hard to bring back jobs because instead of creating new jobs to replace them in different industries, you are just eliminating the jobs. Jonathan michael mckee, always great to get your thoughts on the show, sir. Catch up with you in about 35 minutes when we get initial jobless claims. The data just around the corner. One thing we keep going back to his how consumers will engage or disengage with some of the headlines we are seeing, really reflected by what the bank of england had to say yesterday. Do people tighten up their belt going into the holiday season, worried about these kind of headlines, worried about the future . Tom it is amazing on october 1 to begin six weeks late to think about the holiday season. I have no clue what that looks like, other than i am sure amazon moves a lot of cardboard boxes. To me, one of the things that is interesting over the next 90 days is the separation between goods dynamics and Services Dynamics across the entire economy. On the cpi and inflation, those are nicely separated into two partitions. What about Everything Else . What about Service Sector dynamics in unemployment versus goods producing economies, and the differences in a pandemic . Jonathan manufacturing, you can turn that on quite quickly. Services are a much bigger challenge. We have seen that play out in various economies throughout the world. From new york and london this morning, good morning. Alongside tom keene and lisa abramowicz, im jonathan ferro. We are 35 minutes away from initial jobless claims. 24 hours after that, we will have payrolls in america. With equity futures advancing about 1 , the conversation turns to new jersey next. Evan or phil murphy going this program. Live on bloomberg tv and radio, this is bloomberg. This is a new economic cycle, a new bull market, soap to millie this will be a so ultimately this will be a dip to buy. Investors are starting to show more bearish sentiment. Rates may never rise. That is entirely possible. What it ultimately comes down to, do you have money or not . If you have money, you can grow the economy and the households. This is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. Tom good morning, everyone. Bloomberg surveillance