All of the effort back and forth over the weekend. I would really focus on the immediacy of the calendar forward. Weve got the Vice President ial debate on wednesday. 10 days out to a president ial debate, i believe still scheduled. Jonathan so far. Tom and in 29 days, the election. I think those are the numbers that get everyones attention this morning. The National Polling not looking good for the president of the United States. On twitter right now, that is the campaign for the president right now, knowing what these polls look like at the moment. Tom around 10 00 make it around 10, weve got a new tweet. 91 approval rating. Vote these are short bursts of tweets , i guess showing the action that he wants to come out of walter reed this morning. Jonathan and hit became pin trail, virtually speaking hit the campaign trail, virtually speaking. Lisa to me, really interesting to see the momentum, how much it is slowing. We saw signs of than the jobs report. U. S. We will get a read on september jobs and services pmis. You can see a huge recovery, and yet the momentum is certainly slowing. We will be hearing from chicago feds charlie evans. Will he walked back the messiness that he caused last month when he talked about possibly hiking rates for the fed met its inflation target . Later today, and this will be interesting, joe biden is going to be holding a town hall meeting in miami, hosted by nbcs lester holt. Very interesting to see how much focus is going to be on his tax plan, given that he does plan to raise corporate taxes, especially as President Trump tries to bring that to the four. Jonathan dear issei i think we heard more from the president from hospital than we did re i say i think we heard more from the president from hospital than we did from the former Vice President. In the bond market, yields up a basis point to 0. 71 . Stocks delivered a week of gains last week. The 10 year yield ended the week higher, not lower. Credit spreads did not widen monday through friday on highyield. I actually found last week fascinating. Tom i looked at a couple of things. What i really looked at was the bloomberg dollar index, which is absolutely in the middle of its elegantlyutifully, sitting on one of the moving averages i use. It is exactly as you described, a muddle. Would you explain to me the 30 year bond . 1. 52 . Humanity, jonathan yields up three basis point. Well talk about a little bit later in the hour. Joining us now, steve shive. Round Steve Chiavarone can you walk me through how you are processing things this monday morning . Steve youve got to be careful trying to find the latest data points. You need something to look out to. You need something that is your kind of guidepost. For us, that guidepost is the set of circumstances we think are going to be in place towards the back half of the First Quarter of next year. We think by that date, you will have a vaccine of some sort, a president of some kind. An economic recovery that is almost a year old, a fed that is still doing nothing. We think we will still have a fiscal stimulus package at that point, and he will have very easy yearoveryear earnings comparisons. When you look at the risk on appetite of the market last week, i think that is what it is looking towards. Tom what is the appetite of c class officers to merge . We have this bristol miles this Bristol Myers biotec, i know it is a Small Company out of san francisco, but what is the urge to consolidate among the big cap space . Steve we have already separated the winners from the losers, but those that are in the position now have the ability to login competitive advantages by taking out weaker competitors. I thing you are going to see a lot of that over the next couple of years. The gain, when youre looking at the weaker players, is who is going to die and who is going to get purchased. I think that is going to be the big theme for the next couple of years. Lisa President Trump keeps tweeting. He cut corporate taxes to 21 , joe biden proposing to bring them back up to 28 . A number of estimates say that will materially cut profitability for a number of companies, including big tech. How much are you modeling for this . Steve less than the street. The street in general has about a 10 to 15 aiming through 15 Earnings Growth dip from bidens tax policy, but hes raising taxes in order to fund more spending. I thick there are some offsetting spending initiatives. We think it is more like 5 , 10 . Outside of corporate taxes, we think the biggest change is actually the change on Capital Gains taxes. If the top income tax earners are going to pay a 40 Capital Gains tax Going Forward instead of 20 this year, we think youre going to see folks really try to harvest those gains in 2020, and that could cause a late your selloff in tech and highflying growth. That is something we got our eye on pretty closely. Jonathan where do the fiscal talk that into all of this right now . Steve i think theres a renewed sense of urgency behind this, but ultimately we are going to get stimulus. It is either going to be before the election as a bipartisan deal, or if not, it will be in the lameduck when no one has any political concerns, and if not then, then when there is a new congress. The stimulus that has been put in the system, economy open, youre going to have tender. If we have to close but down like in certain parts of new york, that is pretty restrictive on growth. I think that is even more important than what weve got in washington. Tom for me in my weekend reading the paragraph for me in my weekend reading was from michael , on the partition between goods and Service Sectors. Can you construct a portfolio around that . Ighted touys we goods producing versus the disinflation of Service Sector . How does that cut . Steve that is a great question. Tom its my only one for the week. You get it. Steve weve never really broken it down that way, but where we are right now, as we go into the back half of the year, you have some of those potential tax changes. We think we are getting ourselves on the other side of covid in the first half of next year. At least, that is our hope. We have gone overweight goods and Services Sectors and have gotten beaten up. The hotels, the cruise lines, the casinos. We have gone overweight from the goods producing Industry Groups like materials, and like consumer durables. I think it is a scenario where right now, if we end up with a Biden Victory and a vaccine, we think that will be in the interest of a very big rotation toward cyclicals and away from some of the defensive growth names, for tax reasons, and because we think we have an economic recovery which is selfsustaining at this point. Even the jobs number on friday, if you strip out what happened with government workers, the economy added jobs at a very strong clip. That was more of a story of schools not reopening than the economy rolling over. Lisa wondering when you expect the vaccine to come out and be in distribution in full in order for your prophecy to come true. Then i will answer it and tell you why i dont think it is about when it is in distribution. It is not likely to be in distribution until the end of the First Quarter, middle of next year, etc. I think thats right. But psychologically, knowing that we have something that works is going to be very important. If you are a restaurant and you have scrapped yourself through this summer with Outdoor Dining and take out, you know you are in for a difficult winter. If you have a vaccine that you know is coming, you are going to beg, borrow and steal to stay open, and that is going to preserve jobs. If you have no hope things are going to get better come springtime, why not shutdown today . Why lose money for the next six months . I think it is really about the announcement that we have science that we know is going to work, and then we can bridge the gap with a stimulus bill or with people trying to hold on until it is distributed. But we are under no illusions that we are all going to take a magic pill in november and this is going to be over. , alongk that the vaccine with regenerons antibodies and Gileads Remdesivir and dexamethasone are going to put this thing in a box. Jonathan as you know, Many Companies the last seven months have been holding off and holding off. Steve, great to catch up. Think you, sir. Interesting move at the long end of the yield curve. The 30 year up by about three basis points to 1. 52 . It is going to be interesting to see how the long end lines up with the recent polling in the next set of polling. The polling we are seeing and talking about this morning is the postdebate polling. The post covid positive read for the president of the United States, that polling in the coming days is going to be interesting. Tom Martin Schenker was brilliant on this, our chief content officer. What he emphasizes, these are National Polls, and that is all great, except this is not a national election. It is about x number of states. I am a lot more interested in the dynamics of the state polls in the coming three days. Jonathan we will catch up with martin in 20 minutes. Ubs head of u. S. Rates strategy will be later, right here on bloomberg tv and radio. Alongside tom keene and lisa abramowicz, im jonathan ferro. Bloomberg surveillance. Ritika with the first word news, im ritika gupta. Theres confusion over how President Trump is being treated for the coronavirus. In public, his doctors remain upbeat. One says the president to be released today from the Military Hospital in maryland, where he has been since friday night. Still, another one said the president has been given supplement to austin and says supplement to oxygen and has been education typically used in more severe cases. Trump waved from his motorcade in a bid to demonstrate strength. Joe biden leads President Trump by 14 in the new wall street poll, hisbc news biggest of the campaign his biggest lead of the campaign. The poll was taken after the debate, but before the president was hospitalized for coronavirus. Warning the public that a very tough winter lies ahead, he accepts that people are angry with the way he is handled the pandemic. Boris johnson tells the bbc it is going to be a bumpy christmas, and maybe even bumpy be on that. A huge deal in big pharma today. Bristolmyers squibb has agreed firm worth 31h billion in cash. That represents a 61 premium to the companys Closing Price on friday. It would expand bristolmyers lineup of heart drugs. 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. Pres. Trump its been a very interesting journey. I learned a lot about covid. I learned it by really going to school. This is the real school. And i get it. And i understand it. And it is a very interesting thing. I am going to be letting you know about it. Jonathan the president of the United States after the inconsistent messaging over the health. Over his equity futures getting that material bounce, was futures up across the board in the United States. Futures up 0. 7 . Weaker dollar, stronger euro. 1. 1755. Ar, on the 10 year, a list about a 0. 68 percent. Tom theres a little bit of book reading going on at the acclaimed Walter Reed Hospital. The data this morning is interesting. A celebration, perhaps, of a healthy president. We will see how that unfolds across the morning. What is different from my last conversation with Marty Schenker the president is using his best vehicle of communication. I think theres been some 300 tweets this morning. Martin there havent been 300, but there have been a number of them. Tom what is the signal . Martin signal that he wants to some normalcy, if you can call it that. What is normal in trumps world is an interesting thought. But when he was first diagnosed, he ceased tweeting for Something Like 36 hours, so that cause a lot of concern, i think. Jonathan it is a wide range of topics tom it is a wide range of topics that the president addresses. The wide range of polling is a stunning statistic, a la bob dole from another they send time. What is the issue to jumpstart the president s campaign . Marty i really dont know. I think he is searching for that issue because nothing so far has worked for him. I think with the polling over the weekend, which was prediagnosis but postdebate, his performance at that debate clearly hurt him among voters in america. Jonathan jonathan just looking for the tweet, and there is always a risk that you overanalyze some of the tweets, but there are about 15 of them on different topics, different themes. Military, vote, religious liberty, vote. So far, nothing on covid19. Is this the issue for this campaign right now . It is going to be very difficult to campaign on the other issues. Marty for sure. The public has a strange way of deciding what is the issue, as opposed to the candidates themselves. This virus overtakes everything, and his record on virus is not great, as many of us understand. , he ist he has the virus trying desperately to talk about anything else. It doesnt seem to be working. Lisa how do you think President Trumps joyride outside of Walter Reed Hospital over the weekend to visit his supporters from a closed car will play with his supporters . The supporters out in the street were probably thrilled to see him, but he is under tremendous criticism from the medical community and others for putting the secret service men in that vehicle let risk because hes clearly infectious that vehicle at risk because hes clearly infectious. Even if hes wearing a mask, that is a hermetically sealed car, and he could have endangered those secret service agents. Jonathan questions still remain about the protocol and whether it was followed, and when they found out about the positive test of hope hicks. Our very own Jennifer Jacobs broke that news. If she hadnt, who knows how this story would have rolled out into the weekend . What dont we know, and what do we need to know about what happened last week . Marty one of the most important things, and we are not getting any clarity out all, is when donald trump last week was tested, and what those test results showed. For instance, before he went on thursday to his fundraiser at bedminster, he knew hope hicks tested positive. But did he himself test positive at that point . The white house is not giving any clarity whatsoever on when donald trump was tested last week, and it raises the question, how regularly is he tested in general . Positivef he tested and went to these events knowing it is a serious breach. Tom you and i are of a certain vintage where we have been hermetically sealed since february. We are very fortunate to work for bloomberg, which is really done a great job within our headquarters here on Queen Victoria street and the rest. We understand that age issue. Number ofre x 70yearolds ill off of this shenanigans, that is bad odds for one of them, isnt it . Marty it is. 70 arenow, people over at a higher risk. It is also interesting to note that many of these Covid Patients show improving signs, and then days later essentially collapse. That is why this whole notion of donald trump being released from the hospital today seems like a fantasy to me, that doctors would allow that to happen. Jonathan i think. We all wish him the best. Marty i think we all wish him the best. Marty, thank you. The number of people that have tested positive within the campaign, his Campaign Manager also infected by all of this. We know that the first lady, of course, infected by covid. His debate coach, former new Jersey Governor Chris Christie as well. You go over the whole Campaign Strategy of last week going into that debate, there are a lot of key personnel facing trouble through the next couple of weeks. Tom axios this sunday, the surveys really well thees a lot of issues for president. Money may be an issue, that final dash, the millions needed to do the final messaging. I wonder if it is there. Jonathan speaking of money, can you imagine being at that fundraiser in bed been stirred, new jersey in bedminster, new jersey . It was chief of staff mark meadows that gave the timeline the hope hicks tested positive, and they knew about that test before they left for new jersey. So the president arrives there, knowing he has been exposed to coronavirus. The amount of questions that still havent been answered are key. It is key for the administrations messaging around the protocols, and what Everyday Americans should do if they are exposed to covid19, and the inconsistency of what the president and this administration did last week. Tom i dont know what it was like for Prime Minister johnson, but my recollection is it was a lot cleaner and clearer than this. He was atw serious saint stephens. Jonathan to be fair, there are some similarities, that this government tried to put a show of strength for the Prime Minister as well, and then things got dicey. We hope that is not the path ahead for the president. Tom we are at the halfhour mark. We havent even mentioned jonathan i know whats coming. Thats not how you pronounce it, and you know it. Thats next, here on bloomberg. Are you frustrated with your weight and health . Its time for aerotrainer, a more effective total body fitness solution. announcer aerotrainers ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time, all while maintaining safe, correct form and allows for over 20 exercises. Do the aerotrainer super crunch. The prestretch works your abs even harder, engaging the entire core. Then its the back extension, super rock, and lower back traction stretch to take the pressure off your spine and stretch muscles. Planks are the ultimate total body exercise. Build your upper body with pushups. Work your lower body with the aerosquat. The aerotrainer is tested to support over 500 pounds. It inflates and deflates in less than 30 seconds using the electric pump. Head to aerotrainer. Com now. Now its your turn to lose weight, look great, and be healthy. Get off the floor and get on the aerotrainer. Go to aerotrainer. Com, thats aerotrainer. Com. Jonathan from new york and london, for our audience worldwide, this is bloomberg surveillance, live on bloomberg tv and radio. Alongside tom keene and lisa abramowicz, im jonathan ferro. Equity futures positive nicely on the s p, up by 22, 0. 6 . ,voiding a political crisis seemingly, and america has its merits for financial markets. Eurodollar, 1. 1753. Thats not the only story this morning. Some pmi data out of europe. In france. In, weak in the United States, throughout these nine zip codes in new york city, getting a lot of attention. There will be some tighter restrictions there as well. Going deeper into winter facing some more challenges. Not yes, and the president tweeting for the last 15 minutes. Maybe he is having breakfast at the warrior cafe at walter reed. Breakfast and dinner including daily specials, a grilled salad bar, and pizza. Lisa what . Jonathan it shocks you that tom has gone to the bar menu to see if they serve alcohol . Lisa at the hospital . Tom thats where we can report that right now. To your point on the president and the mix of the news, to me, the most important paragraph of the weekend was at j. P. Morgan, splitting the disinflation dynamic, which you mentioned, in europe between Service Sector and goods producing sector. To me, that is the mystery through october and into november in the bond market. Jonathan the mystery is on output as well. For the Service Sector, much harder to turn that back on. For the goods sector, flip a switch. It got hit hardest in the shutdown. It reopened quicker and bounced back faster, as well. But without the support of consumers, this economy is all linked at the end of the day. Lets bring in our next guest. The 30 year bond. That is an extraordinary move over the last week. 10 year yield, 0. 71 . Jon has been great about bracketing that at the upper end of the range. Twoyear yield, zero yield, 0. 1289 . Lets start with that idea, michael cloherty. Who has their foot on the twoyear yield . Michael the fed does. They suggest that they are going to keep rates low for a long time. I think when you look at the bond market, you want to look at the feds actions in deeper parts of the curve. That part of the curve is all about what they are going to tell us they are going to do with the policy rate. The back of the curve is qe driven, but the treasury is issuing a lot more at the back of the curve. Tom lets talk about the issuance here. Issuance is a flood of paper onto the market, and to be clear, that means yield up, price bit price down. How much of that move would you calculate . Michael what has been surprising is how well we have been able to handle the supply so far. It has been relentless. , frontg on the long end in supply during operation twist , the fed sold 630 billion of treasuries, and it barely moved yield at all. Matters,s supply sevenyear auctions between march and october is going to be 84 . Even though the fed is buying, it is peanuts relative to what the treasury is issuing. We just think we are going to see this steady weight of supply dragging yields steadily higher. Jonathan not a trick question, a genuine curiosity for me, what is the history of supply mattering in this market . Michael generally it matters at extremes. It matters a lot when the u. S. Ran a surplus for four years, back around the turn of the century. Twostens we saw invert 50 basis points. Twostens swaps stayed positive. You had this incredible richness of long treasuries. It matters a little bit coming out of the last crisis, when we saw a lot that the treasury initially issued to handle the jump in supply. It really did offset some of the effects of qe. That is what we think right here. The issuance matters more than qe now. The fed would have to upside in or to offset the supply. Enormously to offset the supply. Jonathan what matters more, the outlook for inflation or the outlook for supply at the long end . Michael inflation will set a fundamental level for bond yields. Supply can create some significant swings within that. Low righte are so now, theres not much upside. We have seen a lot. We saw equities move pretty substantially in the last month. 10 year yield stayed in the six basis point range the whole month. Youre just not seeing much of a hedge benefit from treasuries at these levels. That means less fundamental value in treasuries. Treasuries underperform corporate the vast majority of the time. The only reason you own treasuries is when they outperform is when the equity market gets hurt. When you lose some of that hedge value, that diversification value, treasuries are fundamentally worthless. Fundamentally worth less. Lisa treasuries can no longer be a hedge, right . There could never be a balance to your 6040 portfolio. Do you think it is too soon to ring the death toll for bonds acting as this ballast, or is this an accurate characterization . Michael i think it is accurate. I think behavior will come back, ritz rates with u. S. Rates at zero, the fed has repeatedly said they will not go through zero. If they do, it threatens disruptions in the repo market. And uncle sam has 20 trillion of debt to rollover, the last thing you want to do is interfere with the funding of those treasuries. So at these yield levels, i dont think there is much benefit. If we cheapen a little bit, i do think it comes back. Lisa can you give us a sense of where you start seeing value again, just to give you a perspective . , the highestield is at 1. 51 . Michael i think we need to back before we 20 bips get some of that hedge value back in the equation. Jonathan your due date come along yeartodate long treasuries up 20 through 2020. He clause in what michael is pushing right now the key clause in what michael is pushing right now is that these levels do not present the opportunity they once did. How many people came on the Program Last Year saying that the next test for treasuries, the budget deficit. And what happens to treasuries when things hit the fan . They rallied aggressively. Tom this is really important. Very quickly here, i just think it is so important. The great measurement of a bond bear market is when your clients get three months in a row statements of therefore sure, like a rock bond portfolio going down in price. Where is that equivalent 10 year yield now . On a full facing credit 10 year, where does the pain really click in . Michael thats one of the issues. At these yield levels, i am not seeing much income. Normally you could have prices fall a little bit, but it gets offset by the income. These yield levels, my income is so small that it all just depends on distribution, but we get up, we sort of selloff five basis points a month more than get you there into negative territory. Tom wow. Jonathan would you still call the usa highyield are, given what is playing out in europe at the moment . Rightforeign investor now, from an International Perspective looking at the United States, just how attractive are they . Michael there is still some value there. What we have seen in some of the fx hedging costs that have actually come down recently, there seems to be a lot of street balancing out there right now to reduce the cost. So there is a little more value out there for investors, but not exactly a jump up and down sort of rice. Jonathan michael, great to catch up with you, sir. Your tenure yield, 72 basis points. That is far below the depot rate at the ecb. Just gives you an idea of how much tension there is in europe after the talk of the last several months. Piece,looked at an apple the swiss franc denominated apple debt i believe is out nine or 10 years. Youve made five big figures in ittybitty with an negative yield since march. Jonathan on highyield through last week, with risk on the horizon, high yield spreads didnt even widen. Yields actually ended friday higher, not lower, even with what was playing out down in washington. Lisa it is really hard to understand all of the crosswinds. People talking about how this definitely heralds the death of the 6040 portfolio. Ive gotten a lux in my inbox. Sold down even us stocks off. In the highyield space, there were a lot of crosscurrents. There was the Oil Price Falling out of bed, an increase in bankruptcies, were you have stabilization in other sectors. So a lot of crosscurrents, and i got to say, there is a credibility gap right now that i am struggling with. Though ahead, tom. Tom do you see how she gets 10 people emailing her in . I wish somebody would email me once. Lisa someone emailed into both of you. Jonathan he gets the complaints, lisa. Dont worry. About 10 of them a day. Lisa they asked me to ask you something. Why soccerball has gotten so critical . Beathan i think they might being sarcastic come up with the results over the weekend. Yeah, its pretty wild. Tom can you guess plane can you ask blaine aston villa beating liverpool can you explain aston villa beating liverpool . Jonathan i thought we would go there, so deep breath. Aston villa. Tom i thought it was bob villa, like the homemaker. Jonathan weve got the name right. What is the question . Tom how can they beat someone as dominant as liverpool . How does that happen . Jonathan they fell apart. Everything went wrong for liverpool. Just a real psychological element to all of that. I thought it was absolutely dominant. And you know what i really loved . Villa was so much better than liverpool that everyone forgot what was done just a few hours before. We dont have to talk about it. Coming up, david riley, Bluebay Asset Management sheets invest in strategist. This is bloomberg. Ritika with different, im ritika gupta. With the first word news, im ricky kuchta im ritika gupta. One doctor says the president could leave the hospital today. Still another disclosed that the president had received supplement oxygen. Plus, hes being treated with a drug usually used for more severely ill patients. The republican plan to confirm Supreme Court nominee Amy Coney Barrett by election day is now in peril. Three republican senators have tested positive for coronavirus in the past few days, and at least eight others are known to have had direct exposure. Majority leader Mitch Mcconnells narrow margin for confirming barrett would evaporate if just three republicans were unable to vote. The mayor of new york city will close businesses and schools in nine neighborhoods because of a rise in coronavirus infections. Bill de blasio says the closures and parts of brooklyn and queens will start wednesday for an initial period of two weeks. It is a grim milestone for california. Wildfires have burned a record 4 million acres since the start of the year. Thats more land then was blackened the previous three years combined. Fires in california have destroyed more than 8400 homes and buildings. 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. Esther kudlow mr. Kudlow we are still a part in our asks. They are asking for a lot of extraneous things that have nothing to do with covid and the economy. The split has narrowed somewhat, but it is still wide enough. Jonathan larry kudlow, National Economic council director. Live on bloomberg tv and radio, this is bloomberg surveillance. Alongside tom keene and lisa abramowicz, im jonathan ferro. Getting you prepared for the opening bell in new york this morning. Good morning to you all. On the s p 500, we are positive, higher by 0. 7 . Call it per 0. 75 . Some mixed data over on the continent. Eurodollar, 1. 1755. Years higher on the 10 to 0. 7121 . Year we know that senate we public ands considered a bill Senate Republicans considered a 50 of in and around billion. Is the biggest gap for this administration and democrats, or with them and their own party . These negotiations arent just between House Democrats and this a ministration. Senate republicans have a big role, too. Tom nicely laid out in terms of the dollar numbers. What i can do is give you one single statistic, 39 . How does this debate change today with the president s polling previral infection . Jonathan the president is trying to hit the ground running, isnt he . I think thats what is playing out on twitter this morning. Trying to display a show of strength with a driveby yesterday afternoon, and this morning campaigning for votes. Those polls are National Polls, and we know that the nuance is of a handful of states and how much those states matter, but those National Polls do not look pretty for this campaign. Tom a terrific essay friday and over the weekend on the polling around Prime Minister johnson. Cameron, what did you learn in your study of the polling results around the leaders serious infection . Reporter it didnt do a whole lot,. To be honest with you mr. Johnson a whole lot, to be honest with you. Mr. Johnson announced that he contracted covid on march 29. You can see there was quite a nice improvement in u. K. Polling , or government polling numbers for march. But that all happened before johnson announced that he had covid. He kind of went sideways during the time in which he was suffering from the disease, and didnt really go anywhere until a couple of months later, at which point it came sharply lower, which we can say had nothing to do with his contracting the disease. Is ausly the United States different country from the united kingdom, but i think it is probably fair to say that mr. Johnson and mr. Trump are both fairly divisive figures, so there might be an analog here. That would perhaps suggest that the hopes on the republican side is that there will be a wave of sympathy for mr. Trump that might not be rooted in fact. Lisa you were a trader for a long time. There are so many levels of uncertainty, but also a credibility gap. We have, for example, questions about the polls. We have questions about the state of President Trumps health, given the divergent messages coming out of this white house. We haves fiscal support coming out of washington, d. C. Me once,nce for fool me once, fool me twice, fool me 5000 times. What seems to be the message coming out of washington . Cameron you can never underestimate the degree to which people will engage in the willing suspension of disbelief. Year with thest trade negotiations. How may times did the equity market rally on the same headline that a phase one trade deal was getting closer and what have you, even though there was actually no news in the literal sense of it in these releases . I think there is a general sense that eventually, we will get more stimulus. Whether it happens this side of the election or not its perhaps more open for debate. I guess the other issue is if you do get a democratic clean sweep, that would pave the way for a much larger dose of spending, perhaps with an agenda attached to it in terms of the environment, the Green New Deal and what have you. But i think it is fair to say that even if we dont get a nearterm deal, there is going to be enough noise that markets will look at it like they look at the trade stuff last year. The one point i would raise is if you start to see a significant deterioration in the Economic Data without a deal, that is perhaps when that willing suspension of disbelief gets in cold water gets some cold water thrown into its face. But right now we are not quite there yet. Jonathan lets talk about that. Just how cold is that water at the moment . Cameron i would say it is quite nice. It is like the atlantic off the coast of the carolinas in maybe early september. [laughter] not quite as warm as you would like, but you can still have a nice battle in it nice paddle in it. The payroll numbers last week, they were a little disappointing. Looks like there was a backtoschool element. Certainly the consumer remains relatively resilient, and that has been a surprising positive. That has been mostly focused on the goods sector rather than the services sector, although clearly, at some point there is a supply issue with the services sector. If restaurants arent available , ifat in or bars are closed you want to spend the money, you cant. But the data has been more resilient than most of us would have expected three or four months ago, particularly in the context of reduced unemployment benefits. Executiveis once the aspect rolls off, if and as we wa the payroll momentum ne, and there is expectation in some quarters that the current month will be negative, reported the friday after election day, that is when perhaps the water gets a little chilly and you might need to think about the stimulus wet suit, as it were. Jonathan i expect this conversation to end up in a column at some point in the future, cameron. Thank you. Cameron crise of Bloomberg News on the latest, and how cold or not that water is. A little later this morning, the pmis and ism Services Index coming out. Michael mckee will break it down 9 45 a. M. Eastern antenna clock a. M. Eastern for that data eastern and 10 00 a. M. Eastern for that data. Tom its monday. Jonathan i had a little but of scramble eggs. Porridge. Hot water and lemon. Eased myself into the week. Tom ok. Jonathan tomorrow we will start with a beer. Up 0. 7 . This is bloomberg. People dont like the fact that they dont know what their next 3, 6 months are going to be like. It is possible for unemployment to rise and for gdp to grow at the same time. There has to be more fiscal stimulus. The markets are expecting it. Markets are going to force the government to act here. The fed is going to have to be highly accommodated for a number of years. We are in a lowinterest weight world, probably low Interest Rate world, probably permanently. This is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. Tom good morning, everyone. Era
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