Consumer confidence relatively judge the michigan consumers intimate data is a good guide. Lets break it down a different way. Current conditions, 85. 9. That is above expectations at 84. 9. This is what i was really looking for, expectations also ,oming in ahead of expectations but they are still below current conditions, 79. 2. They are not going down, which ethic is the really important thing, as we see the virus picking up. Alix and we didnt get stimulus, counterintuitive to what many thought would happen. Big tex stocks are lower on a stocks big tech are lower on a flurry of data. Now with us, mark st oeckle. Are you buying the dip . Tok i think people need keep it in perspective. The reports were good. I think what we are seeing today is skimming a little but of the froth out of the valuation adjustment. I think they are all very wellpositioned and very well performing companies, but lets also not forget weve had a big run up into these numbers. The interesting part is you look at the four companies, facebook, amazon, apple, and google, off of the low, facebook is up about 84 , apple up 93. Pretty heady numbers coming into this. There wasnt anything we saw in the reports fundamentally that would scare us away from them. The laggards off of the low has been google. Today they did have a really good quarter, but they were only up 55 off the low. Heady numbers, but we believe if investors are disappointed by this, we think they are nitpicking. Guy ive heard that sentiment from a lot of places today. I am trying to understand why the market is reacting in the way it is. The last couple of quarters, it seems like the market has looked at the results, said these are companies that are benefiting from the work from home, the virus impact. Now the market seems to be looking forward and wondering whether this is sustainable, and whether or not regulatory uncertainty, election uncertainty, all of these other factors need to be priced in. Mark i would say it a little differently. I am not sure they are worried about the uncertainty Going Forward in the business models, but i would say theres no question that investors are taking risk off. They are doing that for the reasons Everybody Knows about, because of the unknown issues about the president ial election, a vaccine, how quickly it is going to come, how may people are going to take it, the surge , and the stimulus risk. I do think that what you have right now is a lot of investors are taking off risk. I believe that because many of these companies have done so well this year, that is a perfect opportunity if people want to take off some risk of selling these big winners. I think that is part of what youre seeing. But there is no question that there is uncertainty today that you didnt see in the couple of quarters you just referenced before this. Alix so how do you play defense . Mark it depends on how you are currently positioned. I think some investors are taking risk off right now, and it is not a bad idea to do that with all of the things i just talked about, the uncertain people. We dont know whether we are going to have an answer on the president ial election on november 3, december 3, january 3. We have to have it before the end of january, but that is unclear. Stimulus, who knows . I wish investors had taken risk off of the market a month ago because maybe congress would have looked at that a little differently and said we need to do something now. I think the stimulus is still a question. And everything with the vaccine, everything ive heard, you have probably heard as well, is that the United States is two to four weeks behind europe. If that happens, we are in for a tough next four to six weeks, and i think the confluence of all of that is weighing on people. Taking off some risk right now probably makes sense. I do believe the companys we have just talked about have really Good Business models, they have reported good results, and i think you should own some of the. Should you load up. Of course not. But you can take the opportunity in this environment to begin to own some of them. Alix mark, always good to catch up with you. Le of atoms fund, thank you very much. 1. 5 despitedown earnings that were good. Ceoing me now is starbucks kevin johnson, alongside balance of power host david westin. Recovery is the buzz word for starbucks right now, as of much of the rest of the world. Give us where you are in their care every in the recovery now at starbucks. Kevin at the low point in april, our u. S. Business was 65 . G in the month of september, we comped 4 . We still had 3 of our store closed, which accounts for probably two points. Infrom 65 percent to 4 five months. China and the month of february, we had 90 of stores closed, and in september, they posted a positive comp. Has held up faster than we thought. We did implement all of these new protocols in our stores so we can operate in a safe way, even with covid. We are focused on those experiences that customers are seeking right now, which we characterize as safe, familiar, and convenient. That has fueled our recovery. To andthe goal is to get past where you are before the pandemic, as for all of us. You are projecting in 2021, you will get there. Does the world have to get back to normal for that to work to you, or can starbucks get back to where it was even if we are still dealing with partial with ans, dealing covid19 we can fully get our arms around . Kevin the fact that we built these store protocols into the operational could ability in our stores, this recovery has unfolded even as we have seen covid cases surge. I feel pretty confident that we know how to operate in the world of covid, even before there is a vaccine and therapeutics. Certainly we look for that day when there is a vaccine and therapeutics because when that happens, we think there is a huge wave of demand that we will see even far behind this far beyond this recovery. We are a Resilient Company and we know how to do this even with the spread of covid. Alix great to talk to you. I wonder if this helps accelerate transition to more drivethru rather than the traditional starbucks model, were you go and spend five hours in the store. If that is true, how quickly can you implement that and move towards new technology . Kevin great question. We have been in the last decade or so old and a lot of drivethru for out the united drivethru throughout the United States. It is drivethru, mobile order for pickup, curbside pickup, delivery. When we did open limited seating in our sores, we have over 60 of our stores in the u. S. In our stores, we have over 60 of our stores in the u. S. With limited seating. , convenientar experiences right now, a lot of that is drivethru and mobile ordering on our mobile app. Alix the other trend we have seen is people are going less, but when they go, they spend more. Does that mean you have to rethink some of your menu offerings right now. How are you thinking about that . Kevin we always drive innovation in our beverage platform. What is driving that is group orders. Someone buys for the whole family or their work colleagues, so what we are seeing is multiple beverages and lots of food attached, but is driving up that order. But we continue to drive innovation, especially in our beverage platform. This last quarter, Pumpkin Spice lattes and Pumpkin Spice has been a popular item every fall, and this year we introduced Pumpkin Cream Cold brew. We sold more punk and cream cold brew then we did Pumpkin Spice latte. But the good news is it lifted the entire pumpkin platform a beverages. So that model of innovation around exciting new beverages is something we will stay focused on. David i cant keep up with your cold brews, you know. You are always one step ahead of me. His work from home hurting starbucks . Part of the traditional model as we go into the office and pick up something just before we go into the office, or even on a break. Is that hurting starbucks as a practical matter . Kevin based on the results we are seeing in our recovery, it is not. Shifts. Eating some for example, we see a shift from transactions in the Central Business district to more suburban. People are going to the starbucks near their home. We are seeing a shift from early mornings to mid morning. People are maybe getting up and doing some things at home before they make their starbucks run. We basically, through technology and our artificial intelligence, we monitor all of the shifts in customer behavior, and then we optimize for those experiences in the operating protocols we need in our stores to serve those customer experiences. That is part of what is driving this recovery. Guy starbucks david starbucks has been in china for a long time. China is ahead of us in the recovery, and if you look at samestore sales, it looks like that is reflected at starbucks. Are you Opening Stores as fast in china as you were in the past . Into in china, we went shut down in the late january, february, so they were the first market we really developed the principles by which we manage in the operating store protocols we have distributed across the world. As they came out of shut down, we had a pause in store developments and openings, but in this last quarter we opened 260 new stores. Committed to 600 new stores in china a year. We are opening those stores as fast as we can, and we are going to continue to invest in china. We are very bullish on the longterm opportunity for starbucks in china. Alix apple really falling out because of sales in china, so you can see how important that is for companies. Are you opening them as traditional stores, or more like you are going to be driving through, dealing more with mobile technology . I am wondering if the type and quality of investment you are spending in china has changed. Consumer is anese very digitally oriented consumer. Our partnerships with alibaba and wechat have been a big part of how we have gotten our mobile app and a significant number of active rewards members in our starbucks program. Clearly, digital is a big part of it. In terms of store format, we design Beautiful Stores in china. Some of those have drivethru. We have introduced a new concept we call starbucks now. Think of it as a walkthrough kind of store in the dense metropolitan areas. If you have seen our stores in china, they are beautiful. They are magnificent. We build them with local chinese artisans and chinese artwork. But the beverages you will see are very familiar to you, and china continues to be a great market and a Great Customer experience. David we never talk about starbucks without talking about your partners, the men and women who wear the green apron. I think that is your expression. Do you have as many partners today as you did before the pen to make . Before the pandemic . What kind of efforts are you putting into make sure that people are safe . I have arst of all, lot of gratitude for the 400,000 starbucks partners who proudly wear the green apron around the world. If you think about it in the United States and around the world, when we shut down all of our stores in the United States, one of the important things we did was give our partners economic certainty. We said we are going to pay you whether you come to work or not, even if your store is closed or if you are uncomfortable being out during the shutdown. We paid all of our partners through that period and gave them economic certainty. That investment is serving us very well. Our Partner Engagement scores are at an alltime high, and that is translating to customer connection. That is driving a Great Customer experience. I give our partners who wear the green apron all the credit in the world for how they have driven this recovery because it is the partners in the store that create that experience for each and every customer. Alix quickly before we let you go, obviously the elections and the potential for greater stimulus, no matter who wins the white house. How do those things and the potential of higher taxes affect your business . Kevin let me start with the stimulus question. I think in many ways, if you look at Small Businesses and look at americans who are out of work and struggling right now, i think it is important for our government leaders to get together to find some solution to help those Small Businesses and help those individuals and those families who are struggling because of unemployment and the implications coming from this pandemic. I think that is important. Independent of the election, we are very focused. This recovery is underway. We feel very good about that. I think we will see what happens next week in this election process, but we are very optimistic about the future of starbucks, and he recovery gives us great optimism. Alix we appreciate you joining us today. Thank you so much for joining also, bloombergs david westin. Coming up, the Worlds Largest gold producer extending its record. Canada actually last . Newmont ceo tom palmer is next. This is bloomberg. Guy live from london, im guy johnson. Alix steel is in new york. This is bloomberg markets. The Mining Industry off to a rocky Second Quarter. Newmont mining bouncing back. The company has raised its dividend again. Tom palmer is the ceo of newmont, the Worlds Largest gold producer, with Mining Jurisdictions in north america, south america, australia, and africa. Thanks for your time today. It looks like you have recovered from the first wave of covid. Are you ready for the second . Tom absolutely. Through the Second Quarter, we into care and maintenance to manage through the pendant. They all came back up and are running very well towards the end of the Second Quarter and into the Third Quarter. One of the things i am really proud of is that thirdquarter results represent an impact from covid that we still had record financial results. The protocols we have in place across those 12 operations are consistent globally, and we are very confident we can continue to keep our operations up and running and manage the risks of the infection spreading as the Northern Hemisphere moves into winter and we are seeing increases in cases. Alix talk to me about your investment policy. In the last cycle, Gold Companies spend a lot of money on m a, then had to write down all of the assets. Currently the industry is dealing with declining ore grades. Do you have to go buy more stuff, invest more money, or do jvs . Tom we have to do none of those things. We engineered a portfolio. We acquired goldcorp and entered into a joint venture in nevada. We now have a portfolio of very long assets, and an organic project pipeline that allows us to sustain between six and 7 million ounces of gold we canout this decade sustain that Production Profile into the 20 30s and 20 40s without doing anything but good stewardship of our portfolio. That is the focus of our team, and we are absolutely focused on ensuring that we are running a business that is profitable at the bottom of the price cycle. We call that 1200. And we are leveraged the gold price. Every hundred dollar increase in the gold price above 1200, we generate 400 million of Free Cash Flow every year. We are generating significant amounts of cash. We are able to return to shareholders, as we demonstrated , with a significant 60 increase in our dividend that we announced earlier this week. Alix what about the cost curve . Is that still coming down for you . Tom our focus through our full potential program, which we have been running for the last seven or eight years, is focused on improving margins. We have an improving cost curve over the fiveyear detailed guidance we provided the markets. We are very much focused on , growing margins and mine life. The dividended again. Incoming investors around the world are struggling to find companies that are raising their dividends right now. Is that an investor class you are going after . Tom absolutely. Raisedary, we their dividend 80 . This week, we raised another 60 . We are one of the only Gold Companies on the s p 500. We are very competitive amongst our peers, and we are starting to see a lot of interest from a Broader Group of investors who are looking to come into our stock. We are looking for them to come in and stay with us for the long term. Investorser group of is increasingly focusing on esg. Can a gold miner ever be a true esg company . Tom absolutely. We have a very proud history with esg leadership and performance that goes back 30 years. We think it is one of the things that really differentiates newmont not just in the gold industry, but the Mining Industry in general. Mining is a very important part of society, and will continue to be a important part of society. We believe those companies that are transparent and demonstrate leadership and performance in the esg space will attract investment coming forward, and we are very confident about our track record and our leadership in that space. Alix gold has limited industrial use. Copper is seen as the green metal because you can see it in evs and all of the technologies you need to make stuffed grain or. Do you need to diversify more make stuff greener. Do you need to diversify more . Tom no we dont. Our project pipeline gives us natural exposure to copper, so doing nothing more than bringing on some projects in our pipeline and the next decade as copper becomes a very important metal, 15 to 20 of our production will be copper. We will get nice exposure to copper whilst remaining a leading gold mining company. Gold still plays a very important part in the world economy, and gold mines play a very Important Role in improving lives of communities around the world where we develop our minds and operate our mines for many years. Guy guy you are geographically diversified. Are you spending any time on a plane right now . Are your teams spending any time on a plane right now . How does it run, a business like yours, in this environment . Tom technology has certainly improved our ability to stay connected. We use these forums, zoom, webex to stay connected. Virtualble to run facilities, but we are also moving people around and paying particular attention to covid protocols. For instance, i am in the United States at the moment. Ive traveled through the United States, visiting our operations. Ive traveled to the u. S. From australia, and was able to do that safely. Weve had people traveling to ghana, south america, mexico. We respect the protocols and follow quarantine procedures, and we are able to keep the Global Business running whilst managing and respecting the protocols around this pandemic. Alix 2000 goal. Do we get there . Tom i am very bullish about gold. The level of stimulus coming into the economy, i think weve got the economy around the president ial elections. Gold has been sitting at 1900, but there are a lot of signals that point to it going more into 2000. At the moment, we will make sure we are fully leveraged to the gold price. Alix a gold ceo that likes 2000. Tom, we appreciate that. Coming up, we are talking about the consumer with tim boyle, Columbia Sportswear president and ceo. This is bloomberg. Alix live from new york, im alix, with guy johnson in london. This is bloomberg markets. Here is scarlet fu. Scarlet certainly the covid news has been a drag on equities all week long. Even of the headlines are still fairly sobering, the stoxx 600 was stabilizing a little bit after four days of losses, but back in the red again. The s p is headed for its worst week since march. Big tech is the singular influence on the market today, with four of the five Biggest Companies in the world reporting earnings. When you are priced for perfection, any disappointment will lead to a lower stock. Apple sales missed estimates with a china slump, and it did not give estimates for the holiday quarter. Surging, but shipping costs are surging even more. And communications services, facebook down almost 6 , warning of uncertainty in 2021. At also posted declines and users in north america, canada, and the u. S. , which is concerning because that is its most lucrative advertising market. We are looking at twitter, also down 19 . A smaller than expert gain in daily active users. The outlier among these Big Tech Companies is alphabet. You can see the pop higher in trading this morning after it rebounded from a weak Second Quarter thanks to a big pickup in Digital Advertising that we have also seen for pinterest and snap. Those are your mega caps. Lets shift over now to the midcaps space. We got an early read on a specific kind of consumer spending, outdoor recreation. Columbia sportswear makes ski jackets, winter boots, so it should be fairly well positioned for the resurgence and people spending time and money the outdoors, hiking and camping and that kind of thing. So far, it is not seeing that much of a benefit because if you look at sales, thirdQuarter Sales dropped 23 . That is an improvement from the Second Quarter, when it was down 40 , but in the Third Quarter it was due in large part to a shift in wholesale shipment. Fourthquarter Quarter Sales are likely to decline again, off by 8 . The other thing to keep in mind is in the Third Quarter, Department Stores and other retailers tend to increase their shipments. They tend to load up on inventory. That is not necessarily happening right now. You can see it in the numbers for columbia. Ecommerce was up 55 , but the stock down as much percent today. Guy as much as 18 today. Guy thank you very much, indeed. Lets pick up where scarlett left off and talk more about what is happening at columbia. The ceo is tim boyle. He joins us now from portland, oregon. Thanks for your time. The stock is down hard this morning, 17 . Is that an overreaction . Tim ive never really tried to predict the stock market. It is not my job. My job is to make outdoor apparel, and we think we do a great job at that. Somebody else is estimating earnings, but frankly, our business is terrific. We have a spectacular balance sheet, and we are well poised for the future. Alix i think part of the concern that analysts were million to was the 45 dollars in wholesale shipments shifted to the Fourth Quarter, then the word that the Fourth Quarter guidance also missed some estimates. Can you give some visibility into why that happened and what you expect . Tim if you remember in march, when the world came to an end and nobody knew what was going to happen, our retail customers postponed or canceled orders, and we postponed or canceled orders to factories in asia until we knew more about what was going on during this period of time. And we wereleared able to figure out what was going on, and demand began to increase among wholesale partners and around retail business, obviously we placed new orders, and the logistics constraints began to raise their head. So we have had logistic constraints on the inbound, as well as on the outbound from our distribution centers. Out. Inventory headed so the fundamentals of the business are quite good. We monitor about 80 of the selling in our wholesale stores in the u. S. And canada, and frankly, their inventories are low. The demand is quite high right now for outdoor apparel and products, but it is difficult to turn the supply chain on quickly. There are well noted logistics issues among not only the larger carriers, but the small partial periods small parcel carriers as well. Guy that is really interesting. We have been talking about that over the last few days. Your stock has bounced back from the first wave, and i am wondering therefore what kind of visibility you now have as we go towards christmas, as we go into a risingnter, with case count around the world. How much visibility do you have on what demand is going to alternately look like over this period . Tim we have the visibility of the daily Shopping Patterns of customers and consumers in our own website, and we can see significant demand for outdoor which isnd footwear, great. What we cant see is what will happen in places like germany or travel where any kind of is restricted significantly. These shutdowns are happening real time. We dont expect that the shutdowns will be as severe in the u. S. , but they could be. When people have the opportunity to go out, they are not typically going to a movie theater. They are outside with their orilies, going on a hike perhaps to play golf or ski, but in any case, they are outside, and that is good for us. When dr. Felt he tells people to go outside, that is a positive for our company. Alix i think guy is definitely into camping. You talk a lot about that sellthrough positivity. Can you give some insight as to how that was the real underlying demand and how much of that was lean inventories . ,im we monitor how much and and we see Sales Activity at about the same amount as last year in many cases. The underlying demand is there. The inventories are light partnersur retail canceled orders or postponed receiving merchandise because they were unsure that what this fall was going to look like. Products hasnt for been delayed. We saw that in the results we had talked about yesterday, where we had this 45 million move from Third Quarter to Fourth Quarter. So the demand is there. The product inventory at store level is not there because the issues we talked about. , and is do you innovate innovation important at this point . How do you encourage people to go out and buy new gear . You have come out with an omni new technology. How important is that in driving demand . Tim it is critical. The barriers for entry for companies to get into the apparel business are low, so we have to have significant points of differentiation. Frankly, that has been one of the key points of differentiation for us, our innovation flow in the pipeline. It was interesting to hear the interview of the ceo of the gold company because we are launching 2022 whichor fall of is a gold colored version of our omni heat, very famous warming product. It is going to be significantly visibly different, and we think it is going to have the opportunity for us to really point out how these innovations work, how they keep people warm, and they look different. Guy thanks for your time today, tim. Really appreciate it. Tim boyle, Columbia Sportswear ceo. Out of the u. K. , if you are worried about the potential for further lockdown, it could certainly be a potential factor in your thinking. Scientific papers being released group forisory government today, indicating we are at the worst Case Scenario now, and we are likely to exceed over the next two weeks even the governments worstCase Scenario. Boris johnson is under considerable pressure right now to enhance the lockdowns that at the moment. N theres also growing pressure for a national lockdown. These sort of lockdowns are being implement it elsewhere. We have seen germany and france upgrading their lockdowns this week, but trying to keep business open. Nevertheless, the pressure is going considerably on boris johnson, and the release of these papers is likely to only further enhance that. We are continuing to track the earnings, but also tuesdays election going to be a massive story for the markets. We will talk more about that in lamy, moment with pascal former director general of the wto. Ritika this is bloomberg markets. Coming up in the next hour, we will your from Air France Klm cfo frederic gagey. This is bloomberg. Live from london, im guy johnson. Alix steel is a new york. This is bloomberg markets. We are just four days until the november election, and we are going to look at one of the more important issues that certainly matters to wall street, and that is trade. Bloomberg chief economics and International Policy correspondent Michael Mckee joins us now. Tim trade has been michael trade has been the issue for the past four years. That may change if joe biden is elected president on tuesday. It is not that he would get rid of trade as an issue. It just wouldnt be the paramount issue. Doesnt mean he would get rid of tariffs on china. He says he is going to keep his options open. However, they are going to aggressively enforce trade rules, the campaign says, and they would try to gin up ally cooperation in dealing with the chinese and coordinate between the countries to try to put more pressure on them. They may try to rejoin the Transpacific Partnership commodes donald trump throughout, but then incorporated into the new nafta agreement. That would give the u. S. More sway. The Biden Campaign also promises 100 day supply chain review. They want to bring Companies Back to the United States. Cyberould sanction espionage. They incentives to give you tax breaks to bring a company back to the u. S. , and if you dont, they will take the incentive back. They would end outsourcing and overseas production tax bricks. As for donald trump, he doesnt really have a policy on anything for the second term, but we can assume it revolves in terms of trade around tariffs. He will, he says, raise tariff rates on some countries. He will continue may be decouple from china, and he does want to sideline or kill the wto. Other than that, we dont have a very good idea of what trade policy will look like other than what it has looked like the last four years. Alix perfect set up. Thanks so much. For more on u. S. And global trade relations come up pascal wto director general joins us now. The wto is kind of front and center of trump trade policy. What are the different scenarios if trumps elect or biden is elected . Think based on the view we just heard from mike, most of the tension we have had in recent years originates in the u. S. , with a very specific , theby President Trump first u. S. President to be elected on a protectionist platform since 1900. If biden wins, there will be some changes in the u. S. Trade policy. For instance, the problems we have in updating the wto rulebook, which is what wto reform really means, might be because they would agree to rejoin the negotiating table. Whether it is about state aid, trade and the environment, and so on. The trade backbone, the u. S. China rivalry, may have thenconsequences on trade during the trumpet ministration. Guy the Trump Administration. Howal how similar guy similar will policies be in comparison to what we saw before the trumpet ministration . The Trump Administration . Pascal i think the big difference would be that trump the tradingken system. Arm twist trade partners for the last four years. From the point of view of the u. S. Economy, i think the Biden Administration would be or cooperative. Are that we we have allow some chinese practices that are not what we would call. Air trade the only way to change the rules and to reinforce the discipline is to stop trying to drown the world trade based system. Alix you may not see more tariffs implement it, but do we think there will be a rollback of current tariffs in place . Already,s you have set biden wants to keep his options becausethis, not least hasrt of his constituency the problem that the trump experience has shown that these tariffs have damaged the u. S. Economy, have cost producers, have increased the cost to , inumers, and overall putting tariffs, you reduce efficiency. Have all negatives by raising tariffs, you dont have come which would be bringing production to the u. S. Overall, and i think there is a consensus among world trade economists, it has not worked. Wto andning to the getting a little bit more specific, does the wto have any choice but to basically wait for the outcome of the with selection before attempting the u. S. Election for attempting to resolve its own leadership . Pascal that is an option. As you know, the selection rest,s is, like the rulesbased. They dont improvise. How it is method of selected, which frames the way the competition takes place, and which states what will happen. What will happen now that one of the candidates has much more support than another one is that in other one should withdraw order to facilitate consensus. , the u. S. Er reason has not withdrawn, which is what the rules have said it should do. That is where we are. The next stage of the rulebased process is to go to a vote. There are two options. Either the double geo members dusty wto membership now votes, and we know what the wto number ship now votes, and we know with the results will be. Or we wait for a new u. S. The u. S. Ation so that and bessette are gets instructions not to oppose consensus, given that one of the candidates has much more support than the other one. Guy on that note, we will see what happens, and we will say thank you to you, pascal lamy. Pascal lamy, thank you. Tune in for special coverage of the election, 7 00 p. M. In new york tuesday, november 3. You really want to make sure you tune in for that. The nasdaq is being hit hard right now. U. S. Equities are selling off, albeit on light volume. This is bloomberg. Alix time now for futures in focus. Looking at volatility after a roller coaster week. Futures overnight were really whippy, and now we are much slower. I just want to talk about the Options Market for a second. The curve of futures tied to the vix, a week or a month ago was a very different story. We are expecting a lot of volatility in the short term, and if it actually comes down fairly quickly, we are looking at that white line, it doesnt stay elevated very long. Guy markets pricing out the contested election. We will see what ultimately happens next week, but there was this narrative that we were going to see a contested election, and the market got very worried about it. The polls have moved in favor of joe biden, and that seems to be priced out. The biggest swing in all of this is still what is happening with the Senate Rather than the presidency. In terms of what we are seeing today, value is bid. Momentum is an offer. Tech is getting hit. The s p is trading on above average volume, but still down by 1. 74 . The weekly numbers are really quite grim. S p down by 6 . Here in europe, the dax over the last five days is down by 9 . Alix what is interesting to me is the lack of bid in safe havens. We will talk about this later. If you look at the bond market, theres really no bid anywhere. You are seeing some selling. You are also seeing the dollar light as well. Maybe the yen seeing the safe haven, but it is not the traditional thing you would think about. Guy why would yields be going up if the market is pricing and more risk . If the equity markets are worried, yet on the same day, we are seeing bond yields push higher again, that seems to be slightly counterintuitive. We will continue to monitor what we are seeing with this selloff, but certainly lower for the nasdaq, and we have continued lower. Up next, mark mobius is going to be joining us to give us his view ahead of the election. This is bloomberg. [ sigh ] not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. The kohler walkin bath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. Kohler is an expert in bathing, so you can count on a deep soaking experience. Are you seeing this . The kohler walkin bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkin bath provides independence with peace of mind. Ask about saving up to 1,500 on your installation. Virtual appointments now available. Alix it is 11 00 a. M. In new york, 3 00 p. M. In london. Welcome to bloomberg markets. U. S. Assetse a sell kind of day. The s p and the nasdaq really underperforming. Tech getting particularly hard. Well. T has done very maybe some unwinding for us. Maybe this is a preelection trade. Hard to put your finger on exact a is happening. Then you can roll in what is going on with the earnings story. By any metric, tech earnings looked pretty stolid looked place looked pretty solid last night. 1. 9 , sos down by significant selling stateside. The s p selling off on fairly decent volume. The dollar is flat, which is interesting because maybe fx is one of the cleaner ways of looking at this right now. What we are seeing which is seeing ang is we are around the world selling of the bond market, and it is actually focused on the tens and 30s and of the market. You could argue that we are seeing yields going higher, which would present a positive narrative. But we are certainly focused on what is happening in the equity market, which has had an incredibly tough week on both sides of the atlantic. Alix breaking news now from the fed. Joining us is Michael Mckee, bloomberg chief economics and policy correspondent. Michael they are changing the main Street Lending program, which has been criticized for being ineffective. Companies either cant or wont borrow, so they are tweaking it for main street businesses involved. So far the fed has only made about 400 loans for 3. 7 billion, and this is a 600 billion program. Thebig issue, the size of loans, too big for Small Businesses, not alone for thats not enough for some mediumsized businesses. The fed is lowering the minimum loan size to 100,000. It is adjusting its fees to encourage borrowing. This is for both profit and nonprofit organizations. They now say when you calculate your assets and liabilities for the bank when you are applying for the loan, you dont have to to 2e ppp loans up million that may be kept some people from getting loans. Are good for up to five years. Principal and Interest Payments deferred for two years, but unlike the ppp, they are not forgivable. The fed says this is a small and mediumsized business program, but people have been thinking of it as a mediumsize program. Maybe it is now moving towards the smaller and to try and fill in the ppp extension we did not get from congress. Guy thank you very much, indeed. There is some talk in europe that the ecb needs to figure out a way of cutting out the banking channel going direct to consumers. Cases in germany hitting 500,000 as the german chancellor Angela Merkel tells other leaders in the eu that they should have acted sooner to stem the outbreak. Joining us now with more from brussels is bloombergs maria tadeo with an update. Maria yes. What we are seeing is the number of cases has been jumping this week. We have also seen lockdowns come into effect. Theres a lot of speculation in europe as to whether similar measures could go into effect next week, and of course, that warning from Angela Merkel yesterday in front of european. Eaders this feeds into the European Central bank. We heard from Christine Lagarde yesterday, who said there will be a recalibration going into the december meeting. Today when we spoke to the ecb councilmember here in vienna, he repeated that message. What was interesting, he said a lot of the elements of the package will depend on the forecast going into that meeting. He said that rate cuts dont seem to be working for the real economy. Marketsng that the right to price in some action. He said the markets should be much more nuanced about lockdowns. Theres partial lockdowns, big lockdowns. He doesnt see a doubledip recession as something that is certain. Something thats wouldve been priced in at this point. Alix thank you for that. Joining us now is Marilyn Watson , blackrock financial had of the mental fixed income strategy, and luca paolini, Pictet Asset Management chief strategist. Why did we selloff in the bond market when we are seeing a . Elloff in tech marilyn first of all, it is monthend, and we do tend to see a rebalancing at the end of the month. The markets are really focused on the stock markets at the moment. We might also be seeing some positioning ahead of the election next week. Maybe people are just literally taking down some risk across the board as well. I think it is really hard to put your finger on one thing that would because in the selloff today, but i think it is probably people taking a bit of risk down and positioning themselves going into next week. Luca, what is your narrative regarding what we are seeing right now . Luca i think if you look at bond yields, the expectation is that the evaluation is so unattractive that you need to see probably really bad news to drive the markets or to drive yields. , i think theint probability is relatively high, and the reflation risk is there. For me, that is one of the reasons why bond yields are moving in the wrong direction today. On equities, it is a combination economicings, of moment, losing steam, and covid19 is obviously looking very bad. Alix i like that you brought up a combination of factors. You have potential region lockdowns in europe. You also have a earnings and jobs data next week, the fed, dump in europe. Luca from our point of view, the areas that we see full potential continues to be asia. In asia, you have decent valuation from the equity market. Fundamentals in china, and the pandemic seems to be under control. Asiarongly believe that offers upside, a general risk off situation. But i think they are much more resilient on almost every front. Lets stay in china. Our chinese bonds a haven at this point . We have certainly seen very good performance out of china. Economy, itk at the is continuing to perform well. It actually has positive gdp growth over every year. It has this sort of vshaped recovery. I think china has been seen to really control the spread of the virus. I think when you look at the spread of covid, when you look at the lockdowns in europe and elsewhere, i think china is a very different scenario. It is becoming almost a consensus trade, but i think a lot of investors are viewing china very favorably in these circumstances. Alix what kind of Exchange Rate do we need to see to keep legit . Make that thesis marilyn if you look at the Exchange Rate right now, i think it is maybe around fair value, and particularly when you look at the u. S. Dollar side of it as investors have been positioned for a weaker dollar, given their views on Monetary Policy and fiscal policy in the u. S. , given their views on growth and elsewhere. That hasnt really come to fruition yet, so i think at the thent, if you look at where Exchange Rate is at the moment, it is fair. It is when you start to see other dynamics coming through that i think china continues to look very attractive. Our we were to speaking to correspondent maria tadeo earlier on. She made it very clear there is more stimulus about to be delivered by the central bank. We will probably get into december. Maybe it comes a little earlier. Is that a civil that you want to continue buying btps, peripheral bonds . Equities are being hit here hard. Luca i think there is potentially a little bit of downside in terms of yields in the periphery, but lets not forget the periphery is hit by another wave of covid19. The economies are very vulnerable, so i think the ecb action will help, but on the other side, i think a lot of risk. Especially in a situation where risks are rising overall, i peripheralw buy bonds, considering as well that spreads are very low. I think the risks are probably not worth taking at the moment. Guy do you agree with that, marilyn . Marilyn i disagree a little bit. We have some longstanding positions where we are long, long spain and some of the peripheral durations. We have seen some decent spread compression there, but i think you could see a little bit further as well. Weve had some of the data coming out of the euro zone that , in termsore positive of gdp growth, etc. In terms of q3 and q4, it might be a little different. But given the fact that they have very clearly signaled that they are prepared to do much Monetary Policy stimulus, supporting the purozone, increasing the pep program, or a package of things in december, i think the e3 backstop could continue to see some further spread compression with italy and spain versus germany. Does that leave us for overseas . If there was a narrative that the fed and ecb Interest Rate policies werent necessarily differing a lot, that was dictating what we are seeing that the fx market and with spreads. Is that narrative really true, considering lagarde said we are looking at everything, and basically youre going to add in december . Marilyn shes very clearly penned any changes to the new comic forecasts that will be released in december, but the ecb really do suggest that they will do a lot more. When you look at the data, when you look at the shutdowns, they very clearly signaled that the risks are to the downside. I think when you look at the fed, the fed did move probably a lot faster initially when we had the spread of covid globally. We have seen very short moves introduceed that did the Asset Purchase Program as well. You may see a change in the composition of the Asset Purchase Program, but it will be a little less aggressive compared to the ecb. The market hasnk underestimated the strength of a second wave that we are seeing with covid . Do you think it continues to underestimate the second wave . Just seeing some papers and the u. K. That suggest we are on course for something that is beyond the governments worstCase Scenario. If that is the case, how much more pricing into that do you think we need to see . Luca i think we have probably of underestimated the impact how about the situation will be, but i think there are some positives to take into consideration. First of all, we are much better prepared to deal with a second wave. Is probablyccine going to be available sometime next year. Obviously that makes a big difference in terms of expectation, confidence, and everything else. I think we are probably underestimating the risk. We had an analysis just yesterday on what is priced in an terms of lockdown. I think what is priced in is pretty much what france has announced. A lockdown of one month, which is marginally worse. Anything worse than that is going to have a pretty negative impact on markets, but there are some positive signs in the vaccine. Rate lower offers some hope for the months ahead. Guy thank you both very much, indeed. Traditional risk on bet appears to be a new market haven. We are going to look at the emerging markets and their performance with mark mobius, Mobius Capital Partners founding partner. This is bloomberg. Guy the s p is set to fall for a second month. This is the final day of trading for october. Equities may be declining, but the havens are not there delivering either. Scarlet fu digging into the details. Scarlet risk assets looking pretty shaky with the resurgence of the virus in europe. Beat very low bars, but even defensive names within equities are not providing much cover. The problem is for investors, your traditional hedges arent necessarily working either. Look at gold, bouncing around 1870 and 1930, but it is really going nowhere. The dollar is weaker, and treasury yields have moved up a hair, but very much range bound as well. For all of that you can look to the federal reserve. The central bank has pumped a tremendous amount of liquidity into the financial system. Of course, all of that began back in march. It has held up during that period, but the problem is the sixmonth correlation between stocks and gold prices has no compressed, and now you are looking at a much more synchronous movement between gold and the s p 500. There we go. I was waiting for that chart to pop up. Green party the chart indicates they are definitely moving more in lockstep. A read of one would mean they are moving more in sync. The msci emerging markets index has outperformed Global Benchmark this month, and if we pull up a chart, you can see it has outperformed the s p 500 as well. According to Goldman Sachs strategists, ian has performed the s p 500 in em has outperformed the s p 500 in three major measures. Not to mention the fact that the big picture here, chinese economy seems to have all but recovered from the covid pandemic, which is a stark contrast to what we are seeing here and in europe. Alix great set up there. Thank you very much. Lets break it down with mark mobius, Mobius Capital Partners founding partner. We will all we were also talking in the last segment about em being a safe haven. Really . [laughter] mark i am so happy we are finally coming back after a number of years we we were underperforming the u. S. Markets, so now we are forging ahead. We have seen money coming in. It is really a happy event for me personally. I think we are on the right track. You must remember, the reason for that of course is china and india. India is going gangbusters. Those two countries alone can move up the index and perform very well, and continue to perform very well. One of the reasons for that is that covid has not really been a big deal with these countries because china has pretty much conquered the covid problem, and varied and mixed in terms of the population movements and so forth, it has not been a really big problem, so life goes on in those two countries in particular. Fair fewa has had a cases. I think that is probably worth pointing out. Does the trade for emerging markets hang on the dollar . Do we need to continue to see a weaker dollar for this to happen . Mark not necessarily. Of course, that helps. But you must remember the move by china to try to disengage the world from the u. S. Dollar is on track. They are beginning to work a little bit more on having virtual currencies, and we are going to see probably a weakening of the dollar in terms of its trade accordance globally. So the relationship there is not going to happen overnight, but it is going to gradually be broken. Alix we are seeing a significant breakdown in a lot of Asset Classes. Get the 10 year yield above the 100 day, the nasdaq sitting at its 100 day moving average. We are hitting some key levels here, so things could get worse. How do the emerging markets ignore that across Asset Classes and the u. S. . Mark the way emerging markets are avoiding that is what the technology. Lets remember we have a really differentiated market now. Of course, in the developed world, as well as the emerging world, but more in the emerging world, stocks related to technology are doing very well. As a lot of companies are adopting this technology, that is driving their earnings ahead as well. So we have to very carefully differentiate these areas in emerging markets, and of course, what is going to be driving the growth in emerging markets is the adoption of technology. The spread of the internet come the spread of smartphones, 5g coming in. That is going to be driving a lot of the growth. The emergingay, markets cannot be put into one bucket, and that is increasingly the case. If you look at what is happening in asia and the countries benefiting from chinas growth winhat region, what a biden be positive for that space . Do you buy that space if we were to see biden winning the presidency . Over a longer term, but a lot depends on what biden does, if he follows through on the policy to increase taxes in many areas in the u. S. , particularly for the mo class. That would be the middle class. That would be bad for the u. S. Markets. That means u. S. Imports would suffer, and that will impact these Asian Countries that do a lot of exports. You must remember, china is just one of this whole complex of nations. Korea is so important in terms of the export market. Taiwan is vital to the export market. Economy cant be good for these companies, so this is something weve got to watch carefully. Of course, the Global Market is expanding, and that will take some of the slack, but nothing can beat the size of the u. S. Market. Alix are you buying gold right now . Mark no, im holding on. Ive got enough, so i am just holding on. I am not recommending any selling, but it is a currency as far as i am concerned, so i just want to hang onto it for the long term. Guy what do you make of prices within the u. S. Markets . What do you make of where the s p is right now, of where the nasdaq is right now . They have bounced back really strongly. They have outperformed europe by a massive degree so far this year. Do you think that is sustainable . And byink it is the way, this is not a political statement if trump gets in, then it is sustainable. If not, then we have real problems, and you could see, ive noticed in the charts it looks like a double top on the s p. So it is touch and go. But you must remove or, with Interest Rates the way they are, stocks can continue to move ahead the way they have done over the last few years. It is amazing what has happened. I look at some of these stocks, and usually the way have increased, it is just incredible. But if you look at the return capital, if you look at some of the other variables, you will find that the stoxx are still very attractive the stocks are still very attractive. Alix what is your favorite bet right now, on a safe haven metric, growth metric . Mark india. If you want to pick a country, i would say india is the most interesting at this stage of the game because they are going to be taking up some of the slack that china has. China has to be doing manufacturing in other parts of the world, and india makes sense. Companies that have adopted technology into their traditional businesses, that is really where the interesting and exciting aspects are. Not the pure tech companies, but the companies that adopt technology into their traditional areas. Just want to get your quick on europe. Your many in particular does a lot of business with china. Daxa is doing well, yet the is down by 9 this week. Is that an opportunity . Mark i wouldnt say yet. I think europe is committing suicide with these lockdowns. I dont think it makes a lot of sense. Theyve got to take an adoption of what, for example, i am here in dubai, and i entered the country. I took a test before i came in. They gave me another test when i arrived. I can move around and do business and so forth. Plus, we wear the masks when we are in public and in enclosed places. But europe i think has gone too far, and it is a real problem. Guy guy we are going to leave it there. Ask for your time. Mark mobius of Mobius Capital Partners joining us from dubai. SlashingAir France Klm capacity. We will talk about that next. This is 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. Guy live from london, i am johnson. Alix steel is a new york. Air france taylor met expecting the fourth Air France Klm expecting the Fourth Quarter be worse. I spoke with the ceo about the numbers in the forecast. Clearly [indiscernible] summer, theas the best period. Far less compared to before. At least we see people in the planes, so it looks like there was an acceptable level. For q4 we are far more cautious. There is in france. Forecasthy we have to for capacity for the next quarter or the current quarter, q4, which are less than q3. 45 for air france and 45 for klm. It is less because we see the last part of the year to be extra difficult in terms of traffic and demand. Guy what is that going to mean in terms of profitability . Current period we try to be transparent with the Financial Market and we have icated in the financial [indiscernible] will be significantly lower than q3, which will be a negative number again. It means since the beginning of the situation is extorted are difficult but q4 will not be better than q3. Guy i would like to get your ideas of q3 next year. How confident are you, given the current structure of the business, given the outlook, that youll be able to make money in that crucial summer period next year . To be honest that is the 1 million question. When you look at the scenario presented by Air France Klm but also the other airlines at the beginning of the crisis, we were almost all considering that by 2020nd of the year, to things will be improving, and clearly when you look to the situation, it is not the case. Seeing that we have postponed the possibility of recovery to the middle of 2021. Klm the cfo of air france talking to me earlier on. Alix airlines one of the Many Industries cutting jobs and needing support from the governments. In the u. K. The government Furlough Program ends today just as various areas of the program are being placed under new restriction. Joining us is barbara petra longo of the university of deferred. The university of oxford. Will they have to bring it back . Barbara the chancellor has already announced his scheme known as the job support scheme. The job support scheme shares a lot of features of the previous furlough job Retentions Team because already the Job Retention scheme had been made inflexible so it could be applied to cases of partial reduction of working hours. This is what the Job Support Team will do. Prolongs the partial furlough by another six months but imposes an additional restraint. In order to be eligible employees need to work at least one day a week, 20 of normal hours, and that is before employers chip in a little bit of contribution for the amount of lost hours and the replacement ratio for employees will be relatively similar. It will go from 80 as it was at the beginning of the lockdown to 75 as of next week. Guy lets talk about the old scheme . Was it good value for money . Barbara with the old scheme, the original scheme was lots of people stopped working, they would get 80 of their pay, and the 80 was initially only covered by the government and then later employers would chip in. Then it became flexible. Then it to be used for only partial resumptions of working time, and this may be more similar to work schemes. Then with the new announcements initialew system, the announcement in september implied a much bigger contribution of employers to the amount of lost hours, and then immediately it was recognized employers would have the incentive to shed jobs as opposed to cutting hours for the same number of people because they would always need to pay cost for the amount of lost hours. Then more recently, the chancellor corrected the announcement so the new jobs report came that was being placed for next week was supporting jobs. It was giving employers the right incentive to keep jobs open in january, for example. Alix is supporting jobs the way to go . You need to do more like the u. S. , which as you help supplement unemployment claims and then supposedly somewhere you get job retraining programs. Not every restaurant will stay. Not every hotel will keep its doors open once covid is over. Is an important difference between the systems. With furlough versus layoff, with furlough the worker has not permanently lost their jobs. Job are still attached to a , still considered employed. Avoids a lengthy process of separations. This is valuable whenever businesses expect to maintain Economic Activity in the medium run. , theey expect to close furlough becomes useless. A lot more important, the furlough whenever sectors and jobs where there is an important match specific value to the job worker relationship. In jobs in which Human Capital is more job specific in which hiring and trading costs would be higher, in luke you sectors that are overrepresented in the ,ource of the Current Crisis this job specific component is less important. We are talking about hotels and restaurants. Match specific a value attached the job, in this case furlough versus low off is not different in terms of effect. You think we have done ourselves a disturbance by not allowing Creative Destruction to take place. When you make that decision to when does government make that decision. We are getting a second wave right now that is likely to be deferred. At what point do we need to do that . Guy it is crucial barbara it is crucial to understand when the furlough will keep jobs alive that should not be alive, or cases in which we have to preserve for the medium run, this kind of Human Capital and surge capital. This is the key decision that has to be made. The point that has to be understood. Themoment we are not furlough scheme is important to preserve this kind of attachment of workers to jobs. Alix not quite there yet. I wonder when we know. Barbara, thanks a lot. Barbara petrongolo, university of oxford professor of economics. Coming up, the pandemic exposing cracks in the food supply system. We will break that down with dave maclennan. Not is that interview, coming up next. Do not miss that interview, coming up next. This is bloomberg. , live i am ritika gupta in the principal room. Coming up, Archer Daniels midlands chairman and ceo. And is at 1 30 in new york 5 30 in london. This is bloomberg. One topic we are focusing on is the Food Supply Chain throughout covid. We want to look at how companies are never this new environment, articulate as we are seeing regional hotspots shut down with the exception of asia. Here is a man that will have maclennaneption, dave , parkdale ceo. Cargile is one of the is one of the Largest Food Companies in the world. Where is the growth, where is the biggest risk, tell me about the activity and demand you are seeing. Dave is good to see you again. Asia is still strong. China is business as normal and certainly the risk spots relative to shutdowns and economic slowdowns are in north america, the u. S. Specifically, and western europe. We have a large presence in both. I am optimistic in both geographies that based on what we went through in the spring and what we learned, that we will keep the Food Supply Chains running. The system is very resilient. The people that work in the Food Supply Chain are very resilient. Guy what impact will the closure of hospitality have . We are already seeing it in europe, we are seeing in chicago. The expectation is that may spread out across the United States. You could certainly speculate hospitality shutdowns and people traveling yet traveling last will have that impact. The travel and Entertainment Industry certainly has suffered the most, and with people being more cautious and more conservative, that is likely to continue. You extend that into food services. The restaurants, particularly the quick serve restaurants were able to adapt the way they deliver their food and do it curbside or pickup, they will continue to be strong. Certainly the Hospitality Industry travel and high end dining have greater risks than the components. Alix give me a sense of what is happening on the ground in china. Purchases have been huge. How much is a real demand in china needing to fulfill trade obligations from the u. S. , and how much is weaker supply and issues in brazil china has to buy from the u. S. Give me insight into the thinking. Is an isnt dave it interesting question. We believe much of it is demand driven. You have the reduction in african swine fluke. That has brought demand back. The chinese population is pretty much life and business as usual. I have a picture sent to me of our chinese colleagues that were in a Conference Room and i stared at the picture because there was 10 people looking at a conference table and nobody was Wearing Masks and it reminded me of the old days in the u. S. From nine months ago. The fact is, they are business as usual. It hasemand driven, and tightened up Commodity Markets and driven up prices, so that is what we are seeing in our chinese business. U. S. Harvest has been good once again. It has provided a market for nmerican farmers to supply cor and soybeans to china. Guy do you think the Trump Administration has made those farmers more dependent on china . You think if there was to be a biden when next week china would change the relationship, honor that deal . The politics will be tempestuous over the next few days. Im curious to see how you are viewing that. Dave do your point, there are people far smarter than i am that can analyze the impact of the political situation in the u. S. Postelection. The fact is china has been implementing and purchasing one agreement, but as i just mentioned, most of the activity we believe is driven to pure economic demand. The American Farmer just wants open markets. From our standpoint, we are hopeful that in either situation, in either result of next weeks election, that free trade, open borders continues to be a principal because that does benefit the american agricultural economy, specifically the American Farmer. That is what our hope is, whoever wins we continue to have free and open trade. Over the past decade you have been diversifying. I wonder how your plan to do that has changed during covid or accelerated . Dave we stayed with our strategy and you and i have talked in the past about diversification, focusing more on seafood, the world will eat more shrimp and salmon so we have a strong beef business which has been resilient in the face of covid, but i think we have to look at covid as, it will not last forever, the food supply is resilient, the people that work in it are resilient, and therefore our strategy will stay true. We are working more into biofuels, bio industrial business, we just recently announced an acquisition in bio industrial, and sustainability will continue to be a huge component of our business. Sustainability, our focus on growth in asia, that is where the stomachs are. Our focus on diversifying our portfolio in areas like bio industrials, seafood, and poultry, that will continue despite what is happening with covid. Guy how do you improve your own Carbon Footprint . There is a fantastic story on bloomberg talking about your efforts to reduce the amount of Energy Required to move grains and other crops around the world using sales on your ships. How much innovation can you deliver and how much can you reduce your footprint as a result . Dave we definitely can. Do your point on bloomberg green , we have partnered with formula one racing experts to say help us design something, in this case sales on the ships we charter to move our products around the world, to reduce Greenhouse Gas emissions. The shipping industry accounts for 3 of Greenhouse Gas emissions. We think the introduction of this system can reduce the Greenhouse Gas emissions by 30 . At any point in time, c argill has about 600 ships moving products around from places where it is being grown, where it is sourced, to places where people need to consume the food. We have to continue to be creative about how can we make our supply chains more sustainable. I think this is one of the more Creative Ideas the world has seen, you harness wind power to work with formula one racing experts to say lets make the shipping industry more sustainable and reduce Greenhouse Gas emissions at the same time. Alix i should point out guy was really excited about those pictures and talked about it on our call. You made him very happy. I want to end with one specific question that has to do with payouts. Can you give me an insight into your distribution policy . Our understanding is 20 of the rolling net income, have you change that to incorporate more operating cash flow which gives you more room to payout distributions . Dave it is a relevant question at a time when we are going into periods of uncertainty and liquidity is going to be so key for all companies around the world. We have not changed our policy. The fact is carville and and mcmillanargill shareholders leave the majority of earnings in the company to invest in the people in talent and businesses of our companies. They have been doing that for 155 years. We have a strong balance sheet. Our debt to equity ratios are strong, so we have very good liquidity. We have a single a credit rating. We do not see any change in our policy. We are very grateful for the fact our owners leave most of the cash from the earnings into the company. Our dividend policy remains the same. Argill has partnered with the role food program. We have too much food and too many hungry people. How do you square that circle . Dave is one of the questions of today, isnt it . We are proud of the fact that we have partnered with the World Food Program, who just won the nobel peace prize. Fore been working with wfp 20 years and they deserve the nobel peace prize. Contributed 1 million to the World Food Program to help support and bolster efforts on what you just mentioned, which is food is there, it has to be able to get to where it is produced to where it is desperately needed. There is too much hunger in the world. There are 54 Million People in the United States will be undernourished and have not enough food in the United States alone, and covid is exacerbating it. That is why organizations like the World Food Program in their neverending quest to end hunger is such a wonderful organization and why we are so happy to partner with them. We have to do more with organizations to square the circle. Guy thank you very much, indeed. Cargill chairman and ceo. Four days until the u. S. Election. Lets look at where things stand. Republicanm is a media buying operation. He works for the campaigns of owners rick snyder in the late senator john mccain. Nice to have you on the program. With four days to go . How do you see things lying. What is your expectation . Massivethink you see a amount of turnout. See states like texas already eclipsing their vote ,otal from the 2016 election already early voting four days out. That introduces a variable into the election that makes it hard to predict. No one has a good grasp on what that turnout increase will do to the electorate and how that might impact electoral models from polling. Polls,uesday as exit results coming in, it gets very exciting, but with 70 people voting early and then the mailin ballot situation different in each state, how do we approach the idea of exit polls . Adam i think exit polls are out the window this year as they have normally been conducted. The analysis is right. You will have a higher republican turnout in most places on election day because of the dynamic of how people have treated absentee voting, in person voting this year as a partisan issue. Any type of polling you are doing a traditional polling places will be skewed. You will get some estimates and combined metrics around generic democratic ballots and generic republican ballots, early vote totals, sameday election polling, and i think people will come up with a cluster metric that lends to it. It is up in the air for what that will look like, 100 . Where are the polls likely to be wrong . Last time we had some pretty glaring errors and as a result we had to fix them. The pollsters had to fix their models. Do you see any glaring errors this time around considering where the polls are pointing at the moment . How wrong with they have to be . Adam they would have to be very wrong from where they are the moment. Showing overwhelmingly momentum for Vice President biden. Nationally for sure. Some of the staples, especially some of the more important staples as you look the Electoral College map, are tightening, pennsylvania, florida, nevada, arizona. I think they would have to be very wrong. I think they are making some corrections. There are smock holsters that understand what happened and looking back is a way to understand where you went wrong. A poll makes assumption about what a electorate will look like and that did not exist until all of the ballots are already in. Andare making assumptions taking corrective measures, but small discrepancies on both sides, especially from underrepresented portions of the electorate to overrepresented portions of the electorate supporting one candidate or the other can make it erratic impact. To make a dramatic impact. That is what you saw in 2016. Guy adam, you will be busy, certainly tracking the numbers on a day by day basis as art we all. Adam meldrum, we appreciate it. The bloomberg Election Special starts at 7 00 tuesday, november 3. A quick look at european markets. Coming into monday. What a week it has been. The dax down 9 this week alone. The stoxx 600 flat. U. S. Markets off significant margins on ok volume. The dollar slightly bid and we are seeing boones we are seeing bunds on offer. Morris,ming up, glenn u. S. House of representatives representative from wisconsin will be joining david westin on balance of power. This is bloomberg. Hope it doesnt cost too much. I hope my insurance pays for it. Can you tell me how much this will be . [cashier] 67. Sorry. Wait, have you heard about goodrx . Goodrx finds free coupons to help you save up to 80 on your prescriptions. Wow, i had no idea. [announcer] goodrx, stop paying too much for your prescriptions. David from bloombergs World Headquarters in new york to our tv and radio audiences worldwide, i am david westin. Welcome to balance of power, where the world of politics meets the world of business. We want to check on the markets as we always do at the beginning of the program. We have Abigail Doolittle here. It looks like people are selling everything. Abigail a brutal day for stocks in particular. Major averages down sharply. , theindex down even more s p 500 down 1. 7 . Off the lows. The new york faang index is down even more, down about 5. 6 , the worst day in two months. The selling as you can imagine based on the text selling having to do with apple, amazon, facebook, and twitter. These companies all beat on the surface but beneath the surface nuances folks are not liking. That is dragging on the names. You have apple down more than 5 , twitter plunging 20 , its worst day since 2014. These