Europe, up by 2. 5 . Todays number from barclays, very strong. We are going to hear from jes staley a little later in the program, our interview from early round. The pound bouncing around all over the place. We were into 1. 31. I think this is broad Dollar Strength rather than anything else. Take a look at the bloomberg dollar index. Alix rising covid cases impacting the economic data. Composite pmi for the euro area dropping below the 50 mark, which shows contraction. Meeting. O ecbs next joining us is john hardy, Saxo Bank Head of fx strategy. Does 1. 18 make sense for when you consider the rising uncertainty . John of course, the pressure should be on the downside given the covid resurgence. I think the general take on the could be that if we are seeing this democrat sweep scenario, we are positioning for a weaker dollar for some time in the future. Anything looks fair between 1. 17, and to me, this is the upper area of where we should be. We shouldnt be doing anything and eurodollar until we get a good look at how this election turns out, and whether it is a smooth transition, and whether we get a smooth result fairly quickly not next week, but the week after that. So it is a fair price. Guy the pmi data not particularly good, though certainly could have been worse. The industrial data looking a little better than anticipated. Nevertheless, what we have seen over the last few weeks has been sick for can spread widening across the atlantic. We have seen u. S. Yields on the 10 year rising, the exact opposite to a certain extent here in europe when it comes to the bund. How has the euro appreciated, and why do people fall for more appreciation as we see the spread widening . John ellis a it is all about the u. S. Real rates. It should theoretically be compressing the real rate disadvantage from the u. S. , but rates are rising in the u. S. Because we are fearing deficits of a very large size once inflation starts to spike out of control. Then u. S. Rates are taking a very different interpretation of what is going on. I think there could also be some portfolio things, while u. S. Rates are rising, the facts that bonds are not performing when stocks are performing poorly. There could be an issue around that as well. It is very interesting, though, that we are seeing this rise in yields not supporting the u. S. Dollar. It is certainly something we should set up and take note of. If it persists beyond this 1 area on the 10 year, a bit higher on the 30 year, that starts to impact a lot of things. The price for global money out the curve, it is crucial stuff. Alix that brings up the question, is there actually yield curve control, even if it is not official . John there will bully if it spikes significantly further there will be if it spikes significant further. Clearly, the feds focus does not continue to improve very sharply from here. That would only add to the negative sentiment towards the , ifar, for very good reason these Inflation Numbers actually start to pick up significantly, and doing so within the next couple to three months. Also depending on what the policy signals are from whatever the adventist ration looks like after election day on tuesday, november 3 the administration looks like after election day on tuesday, november 3. It is much more finely balanced now. I think it wouldve wanted to wait until december because we had the latest forecast by then, but eurodollar creeping higher could be one thing. Spiking above one dollar 20 since aggressively might pull the trigger. But the covid situation makes it really tricky. I would say maybe something in between that they might signal quite clearly that they are moving in december. They might signal that they are upping the pace of purchases a bit. That just sort of signals we all know we are going to move in december, but i am not sure it is a huge catalyst for the euro either way. Alix talk to me about positioning. If we are expecting that in december, there seems to be consensus around what is going to happen in the u. S. Election. Where are we on positioning, trying to get a bigger read on positioning in the fx market . Inn it seems positioning eurodollar long is quite heavy. Yen arear and the ,ormally positively correlated not something worth noting, but it has been quite long in eurodollar. It suggests to me that the upside might be more limited and grinding in eurodollar. If we get some jolts to sentiment, it could just be some more sideways activity in the market expects. For example, on a disruptive u. S. Election scenario. But it certainly is quite a headwind for eurodollar upside, at least in the near term. Guy the market doesnt seem to expect, judging by positioning, much of a move around a brexit deal. What do you think we could get if we got such a deal, even a skinny deal . John i think, for good reason, theres a lot of fatigue around these cycles. Alix that is so surprising. [laughter] john to put it mildly. We are just absolutely sick of it. The market is as well. Which could actually mean that once we finally get some news that the market might have to rush to position something. I think theres upside, but youve just got those dark shadows of covid hanging over everything. It is particularly bad in the u. K. , so it could go higher a little bit, 2 to 3 towards 1. 35 in cable if the dollar runs back towards 88, something odd that. I think we just need to get to the other side of this covid shadow, and to me it looks like we are heading into a bit of a great winter. I dont want to sent a grim winter. I dont want to sound too pessimistic, but i dont see any way out of this for the next two months. We need to see some news on that front for me to get at her visibility. To get better visibility. Guy we will leave it there. Coming up, ecommerce has been the huge story for loreal. My interview with the companys ceo is coming up next. This is bloomberg. Guy we are ramping up the european corporate reporting season. Reporting a surprising increase in sales. I spoke to the ceo about the rebound in consumption and the economic recovery. We are worried about this rebound of the pandemic in western europe and the u. S. , and at the same time, some other parts of the world are apparently doing a bit better. China, some countries in asia, even in america it is a bit better. Navigateying to through this crisis, and we are still confident that we should be able to deliver a positive secondhalf this year, and we are preparing also for positive and dynamic next year. Guy does china compensate for the rest of the world . If you see solid growth in asia, doesnt mean gross for the rest of the United States . Interestingly in the last quarter, almost all regions were positive, and even most of if you take out travel retail. Travel retail is the most difficult because theres no one in the planes around the world. , we with europe last year were at plus 3 , which is pretty good, and plus 3 in north america. So in fact, the consumption in the countries on the continent has been really recovering. It is a positive sign. Guy ecommerce clearly has been a huge story for you in the last quarter, and the previous quarter for that matter. I think i saw a piece indicating that you were plus 23 . Does that number sound about right . We are plus 61 . [laughter] the 23 is the percentage of sales during the quarter. Total, the growth in ecommerce is extreme a strong, and is going to keep growing. It will really be the alternative in the market. Unsurprisingly, ecommerce doing very well at the moment, and they are going to be withdrawing from a number of malls in america, cutting back on their retail exposure. The thing i really learned today anything that is really driving skincare,is active which i didnt even know existed until this morning. Alix he is setting me up because i went on a whole rampage about cuticles and how they are really helpful when you wear your mask, and a skin cuticle product and the difference between them was someer between moisturizer. That is a definite driver. I do want to point out that stanford bird seen Stanford Bernstein said that they were already outperforming, and the pandemic seems to be putting the outperformance on steroids. Maybe you need some active skin products, guy. Guy i learned a lot today. [laughter] and you certainly improved my knowledge, as did john paul a little earlier. They cant make enough of this stuff at the moment. The demand is so big they cant make enough of it, which is a good problem to have. Alix im a woman on tv. I need all the help i can get. Coming up, barclays beats, posting strong revenues. The founder of opimas joins us next. This is bloomberg. Alix barclays shares surging today, reporting another Strong Quarter amid pandemic driven volatility. Ceo jes staley spoke to anna edwards about the risks in the market. Jes the challenge for all banks, particularly in the u. K. , is the zero or close to zero Interest Rate environment is tough for a bank that relies on large Balance Sheet assets and liabilities. A lot of our services in the u. K. Are for free. Getting money out of your atm machine, your checking account, etc. Sure we gesture to make are helping our customers in this time of need, in the First Six Months or the last six months of this year, we have waived over 100 Million Pounds of overdraft charges and banking fees. Inwe are being conservative terms of trying to make sure that our customers dont get into financial distress given what is going on in the market. On the others of that is the Mortgage Market, which is surprisingly robust. Our market share has grown a lot in the Third Quarter. Interest lending in mortgages has gone up. You see it in our net interest margins. It is one of the real encouraging signs in the u. K. , how robust his Mortgage Market is. We want to make sure we extend credit to customers, refinance their home or buy a new home. It is one of the surprising markets i think of the Third Quarter. Anna youve talked about negative Interest Rates this morning. You said the bank is ready. I heard you reference the free nature of a lot of banking products in the u. K. Are you thinking about passing on any of the costs of negative Interest Rates should they come to pass to customers . Are you know, there negative Interest Rates in certain markets in europe, and there indeed with some large corporate clients, we have passed on those negative Interest Rates in the deposit pool for large corporates in certain markets in europe. We are prepared operationally for the bank to run with negative Interest Rates. There are some negative parts of negative Interest Rates. Consumers will go to cash. I dont think that is necessarily a good outcome. But we are ready to manage negative Interest Rates. We would rather not charge our clients those negative Interest Rates, but we also have to manage the financial integrity of the bank. I think it is important that the Central Banks keep in there while it the ability to use in their wallet the ability to use negative Interest Rates, but i think here it is not likely. Anna youve talked about how youre going to give guidance on the dividend for the full year 2020 mark. Are you having conversations with regulators . Are things moving on that front . Jes as the bank of england has said, we will have discussions with the pra in the Fourth Quarter of this year. As i mentioned, this is the strongest the banks Balance Sheet has been. Our capital risk assets is now 14. 6 . It has never been at that level. We are very liquid. We will have conversations with the bank of england in the latter part of this year, and we will address our policy around returning capital to shareholders at our Year End Results coming up shortly at the beginning of 2021. Guy Barclays Jes Staley speaking to anna edwards a little earlier on. For more on the european banking space, lets bring in a cavium a renzi bring in octavio marenzi, the founder of opimas and the ceo there. Lets talk about barclays and extrapolate into the rest of the sector. Barclays delivered some really strong numbers, yet i am looking at a backdrop that looks increasingly difficult right now. How representative do you think barclays is of the wider european banking space . Octavio i think they are fairly presented if of the wider european, perhaps the wider Global Banking space. We have seen various stimulus dynamics in those markets over the past few quarters. I am not sure i agree that they have very strong numbers. They certainly beat expectations by a fair margin. I think it was a fair amount of ,repidation about barclays especially because they have a fairly large credit card portfolio in the u. K. On the u. S. I think there was fear that that kind of unsecured lending would start to rack up big losses with covid and unemployment numbers being high, and that did not occur. But if you look at other banks like ubs that did much better in the u. S. , jp morgan did better, certainly the big investment banks like Morgan Stanley and Goldman Sachs did really well, so barclays is not one of the stellar performances, but certainly the outperformed expectations. What we are really seeing here is a bifurcation between the ks major to activities major two activities. You have markets and Investment Banking. What has been weaker is the breadandbutter retail and Corporate Banking, particularly in the u. K. We saw the same passion in the u. S. With u. S. Banks more exposed to invest in banking trading that did phenomenally well, and the breadandbutter Corporate Banking had the worst, so that is basically the underlying trend, and that is Going Forward in the coming couple of days and weeks. We saw a lotu. S. , of loanloss reserve builds, not as bad as everyone expected. I guess my question is does it actually get worse, or do we see the trough in the Second Quarter . Octavio we have seen the loan losses decrease at barclays and most of the u. S. Banks at well banks as well in this quarter. Theyve taken very large loss reserves that theyve built up in the Second Quarter and Third Quarter, so what these banks basically did it say we are doing incredibly well on the market side. Lets take a loss on the retail and Corporate Banking side and build up those loss books so we can draw that down on a rainy day. I think they basically over reserved, almost consciously saying lets set aside some money. We will be able to draw on that and improve what our return on equity looks like in those quarters. I think that is what we are seeing now. A sickly, we did really over reserved basically, we did really over reserved quite substantially. Things did not turn out as bad with people defaulting on uninsured lending, so things are actually ok. Guy nevertheless, lending standards are continuing to tighten. Even in the Mortgage Market, which jes talked about being slightly more robust than he anticipated. Central banks are become frustrated that the liquidity they are providing is getting locked up within the financial sector. Do you think lending standards will continue to tighten as covid continues on the track it currently is . Actual i think the lending standards themselves have not tightened. Most banks have the same lending standards and standards in place. It is just that most do not live up to them. It is deterioration in the not as much theres lending going on, but it hasnt been a particularly dramatic effect. If you look at the overall level of lending, it looks pretty decent. I wouldnt say there is a huge credit crunch going on right now. That is not where we are at this stage. I think answer quite right to be cautious in this environment. They should be looking at their borrowers quite carefully, making sure they can repay loans. That is to be expected. I guess the Central Banks are frustrated that more of this money they have printed and generated has gone into the smallream markets, help businesses, medium to small enterprises. It seems much of the money they have generated has gotten stuck in the equity markets and fixed income markets, and hasnt moved much beyond that. That has caused frustration for them. Things dont always work the way that central bankers have in their math medical models. Sometimes they have a nasty awakening their mathematical models. Sometimes they have a nasty awakening. Alix that transmission mechanism not really working there. Lets get to catalysts for the actual share price. Dividends, buybacks, when is that going to restart . What bank has the most potential upside from that when it does happen . Octavio i dont get makes that much difference whether they are paying it out as dividends or keeping it has retained earnings on the books. I dont think it is going to make that much difference. I think that is going to remain where it is. What we are seeing in the coming quarters is Investment Banking and trading activity slowing down further. We will have phenomenal first and Second Quarters. The Third Quarter was still strong, but not as strong. I think that trend will continue, and we will basically see the trading side of the house stopped defying the laws of gravity and basically fall down to where they were at precovid levels. We will probably see that over the next quarter or two. Barring some unseen event, may be a huge amount of volatility through the u. S. Election might drive things up there as well. Perhaps the markets will take off again as well on that front. I think what we are going to basically see is a sort of gradual return to normality. Things only loanloss side didnt turn out as bad as we thought they were. The Investment Banking side and trading site have done very well. But of those things are converging back to the normal state of affairs. Octavio, always appreciate your input. Thank you very much, indeed. This is where european markets are sitting right now. The ftse 100 outperforming a little bit. Barclays partly to blame for that. We will show you the numbers in a moment. This is bloomberg. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. X guy 30 seconds to go until the end of the session. Lets look at where we are with european equities. We are positive. Thanks leading the cause due to Corporate News out of your which has provided a catalyst despite the negative covid headlines we see from around the continent. We are up by. 5 . Still trading 361. Before covid, we were well north of 400. Down by 1. 5 . A similar story in the United States. Europe never gained much traction this week and the earliest catalyst does not seem to be delivering at the moment in terms of providing a positive direction. We have lifted off of our lows, nevertheless, reading the analysts notes, there does not seem to be this enthusiasm driving european equities higher. All positive on the day. The ftse outperforming little bit. Some turbulence in the pound today. We have seen a little bit of the story over the last few days repeating itself. Higher on headlines out of france suggesting that maybe there was room for a little bit of ground giving up on the french side of the channel when it comes to the fishery story. That pushed the pound toward session highs north of 131. We faded that move. We see largely Dollar Strength rather than pound weakness. We have seen that in the euro as well. Single stocks, we talked about barclays making the point, maybe it wasnt a great set of numbers but compared with expectations, it certainly delivered and was rewarded by a ticks percent rise in stocks. Airbus is rising sharply. A positive report indicating that airbus is looking to increase the rates on the thelest fleet and that is bombardier c series. A very popular aircraft with a lot of carriers at the moment. It sits below the 737 max bracket. The possibility that maybe there that talking to suppliers, maybe for looking for them to supply the supply chain. We are going to talk about that in a moment. A crafty set of numbers. Not a shareprice reward in some ways. Starting to gain some traction. We have seen it elsewhere in the auto sector. Europe is been on the back burner with its auto sector. Up by. 6 . Guy alix we talked with cfo and he explained why they are raising their earnings forecast. It is difficult to predict what the preceding was going to be with regard to covid and potentially the second wave in november and december. That is why i make the caveat. What we want to if the size is that there is a Strong Demand for products substance. Record ongood track the Operational Performance of discipline that we want to take that into the first quarter. Guy lets stay with the car sector. Daimler the ceo of speaking earlier on on bloomberg. Lets talk to another company involved. Fisk or has agreed to go public for a merger with a blank check company. Fisker. Joining us now, henrik foster, founder of the company. We have been hearing from the dialer ceo. The german Car Companies have been on the back foot. They are now pushing hard into the ev space. It is a space that you are actively targeting. You know a bit about what the german carmakers are doing. Do you think the race is on and do you think you are in front or behind in terms of getting product to market and once those german Car Companies wake up, how competitive do you think they are going to be . Henrik i think seven years ago when tesla started, everybody said that tesla would die out in two or three years. I thinkthey did not and we are ahead because we only concentrate on electric vehicles. We dont have a legacy, we dont have to shift heavy pounds around us. Two, this is a technology that takes a lot of effort. It is a totally different thing to develop an electric car. Not anyally is advantages from a normal carmaker versus a new startup and that is why it is so exciting. We are going into a segment which is very unique. It is a lowerpriced segment. Sense unique in that maybe the First Electric real suv and the partnership and the fact that we are a very asset company, we dont have the burden of dealer margins, giant overheads. Therefore we can come out with a price competitive vehicle versus even some of the big auto giants. I think that is the exciting part for the consumer. Alix the key to lower ev prices for the consumer our battery packs and getting that cost down. Where are you going to get your battery packs from an have you secured the supplies though how do you know that you can deliver a car for 37,000 . Henrik the key is volume on the entire vehicle and today nobody is making over 100 thousand vehicles of one single electric vehicle except for tesla and maybe nissan. The exciting thing is we are partnering up with one that already has a large oem using the same platform that we are using. This platform was developed since 2018. We have the build the material cost already. Two battery packs have been built into this vehicle from some of the largest Battery Manufacturers in the world. We have volume prices pricing because we are sharing this platform with one more oem and we may bring a third into it so it is about getting volume together and not alone. That is what is unique about this deal. Havejust to be clear, you secured a deal on the battery pack . That is done . We are obviously still negotiating on the volumes. This vehicle has already been designed with a battery pack inside it because you cannot launch a vehicle and decide on the battery pack later. This vehicle as already gone through durability testing. We already have the battery pack integrated into the vehicle and it is from two of the largest battery suppliers in the world. The other oem has already negotiated their battery pack pricing and we are just adding volume to that and therefore we know the pricing already of the battery pack. Alix who is the Battery Manufacturer . Henrik we have not announced that yet. We will probably wait for competitive reasons. We are two years away from putting the cart to the market. We are showing the final production in may of next year. We may announce it in may of next year. In terms of why you decided not to go with vw, i am curious. There was originally talk that you are going to use their platform. Why did you not go with that . Henrik we with with a maga platform because for us and for our program, it was the best platform for what we needed. It has a very large battery pack that allows us to be really competitive with tesla which is the leader right now. I think it might be able to meet the tesla model in range, the highest range version and that is something nobody has done yet. Secondly it is an all aluminum platform. Third, we get buddy third row seat in this vehicle and forth we can put a third rosita in his vehicle third row seat. This Business Plan allows us to launch this vehicle to 37 500 u. S. Which isthe extremely comparative. Alix we are talking about the battery packs and when you may announce the manufacturers. What about the cells . Have you secured that supply . Henrik when i am talking battery makers, i did mean the cell makers. As i mentioned, the other oem has already negotiated the entire battery pack including the cells so we know what the pricing is already here it that is unique for us the pricing is already. That is something no other start up to do because when you start from zero, you do not know estimates. The already have that pricing because the vehicle has already gone under 2. 5 Years Development for durability testing. That is unique durability testing. That is what attracted are that there is because we took it from a completely different angle versus doing everything virtual integrated and that gives us a huge Competitive Edge and is a big difference to the rest of the industry. Guy i wanted to narrow it down a little bit. I am looking at what they produced in austria and looking at a bunch of cars. One that stands out is the jaguar, the crossover. Is that the vehicle that you are going to be basically partnering with . Henrik no, it is not. It is a unique platform that really has not been publicized yet. It is new. It has not started production yet. What i will say is one of the advancements that you pointed out, they were one of the first in the world to actually produce an electric vehicle so they have all of the expertise, they have already done logistics for highvoltage batteries, they have set up tools and put in heavy battery packs. That is another advantage. We do not have to take the risk. We will have a slow ramp up. They ramp up externally fast. We inspect to be up to full production rate and produce at least 50,000 vehicles. That is a huge difference if you look back in history. Tesla today large wrap up because they had to learn to manufacture a car. We dont have to show anybody we can manufacture better than the large companies. We can bring a sustainable car to the market. It will be the most sustainable vehicle with Recycled Materials as well. Guy thank you. Really appreciate it. Henrik fisker, founder, chairman and ceo of fisker. High for the ftse 100. Some of the corporate names these are the indexes. Ftse 100 up by 1. 3 . Dax up by. 8 . Also rising into the close, but by 1. 2 . Coverage of the top of the hour, we will go through some of the corporate reports throughout the day from ceos and great conversations with them. Digital radio is where you will find us. This is bloomberg. Ritika this is bloomberg markets. Coming up next, intel ceo. This is bloomberg. Intel stock is down 11 percent after reporting a surprising drop in data center sales. A tepid forecast. Scarlet fu plays it out for us. Scarlet intel giving up its gains over the last few months and it is the worst performer in the dow, the s p and nasdaq 100. Profitd see sales in estimates for the Third Quarter. But thats a price drop you referenced raises a bigger question. What if it loses its lead in computer chips . And losing its lead at a time when making its own chips is holding it back. There have been production delays with its seven nanometer chips. This comes at a time when its rivals are outsourcing their manufacturing. Lets take a look at the Data Center Business which includes memory chips and is a major source of intels profits. Huge gains in the first half of this year. 40 plus. In the Third Quarter fell 7. 5 . This quote are exciting an even bigger drop. This quarter. The shift to work from home and Remote Learning with a boost for demand for chips but that did not play out for intel. They expect to squeeze 5 Revenue Growth but it is on the back of a strong first half in contrast to its rivals like nvidia. All of this is on chair pricing. You can see what has happened to intel. The orange line at the bottom, they filled out the Semiconductor Index in blue. Surpassed market cap in july to become the biggest chipmaker in the world. It has been a rough couple of months for intel. Scarlet thank you. Here to discuss more is bob swan. We appreciate the time. It was a rough quarter. Thank you for taking the time to talk with us today. What struck me is some of the downgrades. I want to highlight one from bank of america because i think it gets to the core of the issue you are having to discuss. It says it is not clear if any founder has either the Spare Capacity to make intels multiple tens of billions of transistors or they desire to help a competitor. The result could be uncertainty which customers at a minimum moving more share to Advanced Micro Devices for risk mitigation. That seems to be the core of what you need to be addressing for shareholders. Help us understand it. Startirst i would just with the role that we play for our customers is increasingly important and therefore with that importance comes a responsibility and all responsibility is to deliver a predictable cadence of leadership product each and every year for our proud business, our enterprise pciness, our tc business, business. That is the biggest priority for us. We have a very strong lineup in 2020, a strong product lineup in 2021 and 2022. When we think about our product roadmap for 2023 and 2024, we have optionality and that optionality is building those products on our own or evaluating the opportunity to do it in others and trying to draw a decision that will be best for our customers and we will make that decision in the upcoming next several months. , think optionality disaggregated design which is a philosophy that we have embraced which gives us flexibility about where to make it that we can leverage advanced packaging is a real asset and a real capability to this company, not a sign of weakness. We will make the decision through a lens of what is good for customers, good for employees and what is good for shareholders. Guy good morning. I think what the market is trying to understand is the timeline for that decision. Will that decision be made in three months . , will time we talk next you have made that decision . Yeah, we are talking about highvolume production in the 2023 timeframe. ,f you back off from that either intel or our thirdparty founders will have to put that capacity in place. At the end of this year, early next year we expect to make a decision of if, what and where we will put production either inside or outside. Alix can you give me a percentage . Your chips aref outsourced, what do you think you want that to be . Dont necessarily start with a percentage. And art with a product predictable cadence of product for our customers and from that, with what disaggregated design means is we have the ability to take our kids chips, assembled them together on a package or on an soc. So making the best decision for our customers that will allow us to deliver High Performance predictable cadences first and foremost. , to use our factories versus others, historically we have been in the 15 to 20 range outsourced. Over time given the enhanced flexibility, that percentage will go up. The decision we make at the end of this year and early next year. Guy producing your own chips is a competitive advantage. Is that no longer the case and could you see a scenario where your fabs are no longer core, that you could sell them off and get out of the game entirely . Having design and manufacturing together we believe is a real competitive advantage for three reasons. One, it gives the ability of our designers, our architects and our manufacturers to optimize the intersection of design and manufacturing to get the maximum performance of products. That is a real differentiator for us. , having economically both design and manufacturing under one roof, we dont have to share the economic that an outsourcing decision would entail. Third, we control the supply and weekend we allocate our production as opposed to have somebody elses production allocated to us. Importantn very aspect of the makeup of our company historically and Going Forward. I think in the near term how we make the tradeoff so that we can condense our customers, they will have a predictable leadership product from us in 2023 and we will and and flow the dynamic of what integrated design manufacturing means in the future. I would expect that with advanced Packaging Technologies and disaggregated design, the ivm advantage as we have called hdmill be more like an advantage where sometimes people others will be making product for us and we may be making products for others rather than just ourselves. As our technologies evolve, we think this gives us much more flexibility and optionality to meet the primary criteria of predictable cadence of leaders are products for our customers. Guy if you would outsource more production, would you insist that it remain in the United States or would you be happy to see it moving offshore . Bob there are so many different criteria i will evaluate. Predictable schedule, product and riskce, economics management, where will the product come from and supply assurance, how do we know for sure that the product we rely on others that we can make commitments to our customers as if we make that product ourselves. So there are multitude of factors we are evaluating to get to the right decisions in the near term. Alix you mention your customers a lot and i want to switch to shareholders as well. What might be good for the customer is not going to be good for the shareholder and im talking about Gross Margins and if there is are rising and yours are falling and that is only going to get these in the short term, how do you compensate for that . First, the Gross Margins for us are significantly higher than the other player in the industry. Alix but they are falling, bob. Bob the diversification of our business is greater. The nature of the products we provide are much broader and we are not going to be solely focused on gross margin percent, alix. What we are focused on is operating income dollars and how do we expand the role we play for our customers on differentiated technology and make more money for our shareholders. We are not going to be a slave to a gross margin percent and turn our back on good ideas where we can deliver promises for customers and make more money. So that is the series of tradeoffs that we will go through so that we have a great proposition for customers and great returns for shareholders. Alix we dont have much time left. But i did not want to let you go before getting a forecast on to see use. What kind of pcus. It . Sustainable is bob i dont know if i would characterize it as pool forward but i would say that the demand has been muchyear higher than any of us anticipated. 11 unit growth in the quarter for us is an outstanding order quarter. 9 unit growth year to date is outstanding for the pc market. I think what we are realizing, covid driven, but also the nature of the products we are is going tothe pc play a more central role in everyday life for consumers, to work from home, to study from home, to always be on, to always be connected. Our belief is the essential role of the pc Going Forward is greater than it has ever been and we deliver the products that allow us to get more than our fair share. Alix we appreciate you spending time with us. Bob swan, thank you very much. That is up for me and guide. Coming up, balance of power with david westin. He will be speaking about the Foreign Policy that of President Trump and joe biden on display at the debate last night. This is bloomberg. David from bloomberg world headquarters, i am david westin. Welcome to balance of power. As we come to air, breaking news out of the white house. President trump says israel and sudan have agreed to normalized relations. Earlier mike pompeo traveled the region and talked to the sudanese. We thought this might be in the works. We will bring you more as it develops. We will get to talk with ian bremmer, the head of Eurasia Group later this hour. Lets get a check on the markets. Joining us is abigail doolittle. Im not sure the stock market knows where to go but i dont blame it. Abigail it is hard for investors for what is going on and what might be ahead. A little bit of a down day, similar to the other days this week. It moved up and down. Fluctuations between gains and losses. The bulls and bears dont have much conviction
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