Via the coronavirus, and there is not much of the fed chair can say. Coronavirus is making all the decisions on the economy. Weakersales coming in than expected, actually the weakest since april. The High Frequency we have seen since then suggest the economy is slowing even further into november. The problem of course is there is no help from the fiscal side in washington, no talks about any additional covert relief package. Getting to the end of the year, most of the cares act expires. So people are looking to the fed, particularly people in the markets. They are looking at the yield curve, which has steepened slightly, still under 1 on the 10year, but there is a feeling that if the fed wanted to do something they could start buying at the longer and, changing the weighted average maturity of their purchases. If they did that, push down on Interest Rates. There is a feeling they may do that in december to send a message that we cannot do a whole lot to stimulate the economy but we are still here, doing what we can. Vonnie what would be the bar data . At economic retail sales were disappointing today but there hasnt been that much disappointing, including housing, and even the gdp data is more or less what we expected. Are goinging numbers gangbusters because Interest Rates are really low. Anything the fed does to pushed on Interest Rates only helps in that regard. Normally in a recovery from a recession, the fed would lower Interest Rates and housing and autos would rocket up, but this is a different kind of virus keeping people sidelined. So the question is can they anything . In the absence of any other leadership, that is what the market is looking for. Not so much an impact but a psychological effect. There is a feeling that maybe jay powell will Say Something today. Ceremony, heards is doing a q a with a leading San Francisco area businessman, so there is a hope that maybe he would drop a hint to do something at the december meeting, but we dont know if he is signaling one way or the other. Vonnie beyond buying at a long and, what could the fed do . We see rolling, continued, partial lockdowns across the country. Mike the only other thing they could do, unless they go into really uncharted territory, is to expand their purchases in the qe program, buy more bonds. That would have the same effect as buying out farther on the curve. The feeling is they dont need to do that right now. They can push down on Interest Rates by buying the longerterm bonds out there, and that would have the same impact on the economy. They could save additional bond purchases for later on. Vonnie michael mckee, thank you so much for joining. Now i think we want to get over to that Bay Area Council business hall of fame award ceremony. Fed chair powell with a Panel Discussion. Am pleased to welcome my friend jay powell here this morning. Welcome to the Bay Area Council. Chair powell thank you. Thanks for having me today. Where do you see the economy today, and how do you see the path forward . Chair powell the place to start is probably to say, in the spring, we had a twomonth the client in Economic Activity and employment that was by far the largest in living memory. Maye then, since april and sorry, may and june, the recovery of the u. S. Economy has been faster and stronger than we expected. Many millions are back to work, investment in consumption are recovering. We just met with some homebuilders this morning and the Housing Market is strong across the country. But there are other things to keep in mind. First is the pace of improvement has been slowing, and understandably so after the outsized bounceback of may and june. The recovery has also been uneven, with john gains greater for those at the higher end of the spectrum, lower end of the spectrum, and most of the job losses were among public space facing service industries, relatively low paid people who skewed to be more minority and more women. That is who got laid off, that is where the pandemic had its biggest economic effect. So the recovery has also been uneven. People in the lowest quartile have gotten fewer of their jobs back. The final thing i will say is the recovery is still incomplete. We still have 10 Million People who lost work during the pandemic that have not gotten it back. That is more people then were unemployed at the peak of the Global Financial crisis. So we have a long way to go. Seeing ahead, i generally most forecasters see the recovery continuing at a solid pace. But with significant downside risks, especially in the near term. The nearterm risk we are more focused on is the rapid spread of covid. Aress the country, we seeing new cases, hospitalizations rise, and we are seeing states impose some activity restrictions. Up to 15 states have done so. The concern is people will lose confidence in efforts to control the pandemic and will pull back from activities that they think will put them at risk from infection. This is very much a concern. As we have been saying all along, the economy cannot fully recover until people are confident it is safe to resume activities involving crowds of people. I ought to mention a vaccine in this spirit. Goodne news is certainly news, particularly in the mediumterm. In the near term, there are significant challenges and uncertainties, timing, distribution, efficacy of different groups, and even in the best case, widespread vaccination is months in the future. Rate, the next few make month may be challenging. It is too soon to say with any confidence what the impact on the economy will be from the vaccines, although they will turn out to be bad news when they are broadly available. One more thing. From the very start, we have been concerned about longer run damage to the productive capacity of the economy. What that looks like it is, workers who are out of work for long periods of time, they may lose their contact with the labor market, lose their skills, and if you are out for a long time, it may be harder to get back. For families and particularly women, leaving the workforce in big numbers now as children stay not byou can see women, preference but requirement, staying at home, and their careers hurt. For business, this can lead to a necessary insolvencies. There will always be insolvencies, but there could be more. That would be tragic for smaller businesses that may have taken generations to build. We have a long way to go. The last thing i will say is we are not going back to the same economy, we are going back to a different economy. We can talk about that, but this economy will be different. That will need that those people who worked in the Service Industry may need help and support for a time as they find work in the places. So the fed will stay here and be strongly committed to using all of our tools to support the recovery for as long as it takes until the job is well and truly done. So the path is instructive. Your response, along with the treasury, working hand and glove with the treasury earlier this year, gave tremendous support to by fiscal andmy monetary support. Outdo you see that playing in the months ahead, how do you distinguish between the spending thehe fiscal side of it and lending on the monetary side of it . Chair powell Monetary Policy and fiscal policy work in very different ways, as i will talk about. In a severe downturn, ideally, they would both be deployed to support the recovery, complementing one another, and together providing broad support for the economy. So far, i would say, both have been deployed quite aggressively , and the faster than expected recovery we have seen reflects that. , there is suchd a long way to go to get back to full employment, frankly, akin to the economy we had in february. It is a long way to go and its likely the economy will continue to need support from both Monetary Policy and fiscal policy. It is essentially what our tools allow us to do, is to stimulate aggregate demand by lowering Interest Rates and to support the flow of credit into the economy. These are really important powers, very strong powers, and we have used them historically, in historically aggressive ways, and appropriately so. As i mentioned, we will continue to do so until the job is done. But this is far from a traditional economic downturn. Suddenly, tens of millions of people were unemployed effectively because of a Natural Disaster and forced the lockdown of certain parts of the economy. As i mentioned, the burdens fell particularly on those least able to bear them. Beyond Monetary Policy, what fiscal policy can do this is taxing and spending can provide direct targeted income support for groups that really need it. There has not been a bigger need for it in a long, long time. Those powers to tax and spend our strictly the profits of our elected representatives in congress. They get to decide who bears the cost, who gets the benefit. It is essential in our system that the elected representatives do so. In the cares act, other bills that they passed, this is the largest and fastest response to any downturn since the great depression. It was quite large and overall effective. Dont expect perfection from a bill that was written at warp speed, if you will, but nonetheless, this was strong, and the stronger recovery we have had is in particular a function of that. Questions ofdd, Financial Sustainability arise, can we afford these deficits those are things that we will need to return to as a country. Ultimately, we will return to those, but they are not things that i would prioritize now. The time to focus on fiscal sustainability is when on a plumbing is low, employment is growing, taxes are rolling in. That is the time to focus on the business cycle, not went on a plane is high and millions are out of work. Balance the fiscal and monetary, there are longterm implications to either path. In choosing one over the other, it will determine what the future has, what the future will be. Given the choice, which way would you go to minimize the negative impacts of too much debt, too great a deficit . Chair powell i dont see it as a tradeoff. I would look at it this way. The question with fiscal policy is, have you done too much . Is that going to put us on a path of unsustainable fiscal path . The truth is we are on one, it is not an emergency. The way you get back on a sustainable path is you have the economy growing faster than the debt for a long period of time. That is what a Successful Program looks like. We will go to work on that when the economy is ready for it, i would hope, in a perfect world. Usedrms of what we do, we our emergency tools we have particular tools, lending tools that we used or state and local governments, nonfinancial vehicles and others, those are only available with the permission of the treasury under unusual and exigent circumstances. So we are using them. When the time comes, we will put those tools away. No one wants the Federal Reserve to take over the function of private lending in the economy. These tools are only available when the private lending markets break down, and they did in march and april, so we came in, and the markets have reopened. When the right time comes and i dont think that is yet or very soon we will put those tools away. There should not be any longterm effects of that. Ont think Monetary Policy the goal for us is to support maximum employment and stable prices. Neither of those goals is put at risk from the actions that we are putting in right now. Far from it. We are doing what we can to hasten our progress toward those goals. Lets focus on the fed side of the equation for a moment. The Balance Sheet of the federal 900ve bank has grown from billion in 2007 to over 7 trillion today. In 2012, when the fud started to taper there was the taper tantrum. In 2018, there was another tantrum with respect to the , topilot Program Announced slow the buying of securities. When do you see the fed getting the Balance Sheet back to some balance of normal, by which i mean neither stimulative nor restrictive policy . Chair powell ok. Alex, i would say it is even premature to think about normalizing to think about the size of the Balance Sheet and things like that. We are focused now on the goals that congress has given us, maximum employment and price stability, and we will take the time to think about slowing our asset purchases, which would slow the Balance Sheet we will start to think about that when there has been a whole lot more progress toward those goals. Ouruld say, based on experience, some of which you mentioned, we know the steps to take. We know that we need to carefully communicate those steps well in advance. What rebound am doing after the Global Financial crisis was, in 2013, we announced we would gradually taper our asset purchases so that they ended a year later. Gradual moves. Then the size of the Balance Sheet was held constant for several years. As the economy grows, then the ratio of the feds Balance Sheet to the size of the economy shrinks. That is one thing we can do. I would also say i will not go into the detail but what really sets the size of the feds Balance Sheet in the longer run is the publics demand for our liabilities. This probably is not widely understood, but the fed is like a bank in the sense that we have assets and liabilities. We are like a small bank, although we are not small, but our Balance Sheet is less complicated than a commercial bank is. Our principal liabilities make up most of our liabilities. Currency is an acid in the hands of the public and bank reserves, which is just commercial Bank Deposits at reserve banks. Those are assets to the commercial banks. To us, they are liabilities that we issue. Ultimately, a lot of the growth in the Balance Sheet after the financial crisis was because of increasing demand from the public for currency. More than that, increasing demand from the banks for bank reserves. The reason there was so much demand for bank reserves, banks were required to hold much higher quantities of highly liquid assets be one of the most favored kinds of highly liquid assets, of all the assets that we create, effectively riskfree, so they are popular. That is where a lot of the growth of the Balance Sheet came in. That is a question that we will return to. We have a playbook. No doubt we will improve upon it. I think we know how to normalize policy over time. One key is telegraphing everything that you will do well in dance to avoid surprises, and then moving slowly. Alex lets talk about growth for a moment. Economy, a global there are Global Factors that are influencing the growth of the u. S. Economy, such as demographics, savings rates. Global factors, including technology, impacting your view of Monetary Policy russian mark policy . Byir powell i would start saying our economy is always evolving. These are powerful and sustained Global Forces you are talking about. Basically they have led to fundamental changes in our economy that have important implications to the conduct of Monetary Policy. Document, weategy write down what our strategy is, it is called our consensus statement. We write down our policy framework. That has to about to be the new challenges. As you remember, the challenge 40 years ago was high and rising inflation. That is essentially what central banking was about, reestablishing credibility for getting inflation under control. Under paul volcker, the fed managed to do that. Since that time, Central Banks around the world have done the same, using a framework called inflation targeting. Challenges keep evolving. For the past two decades, many Central Banks have been suffering with low inflation. Some have a hard time believing that too low inflation is a bad idea, but persistently low inflation can pose dangerous for the economy. To see why that is the case, lower Interest Rates means lower inflation. This is included in estimates of future inflation as well as real return. Lower Interest Rates means the central bank has less power to support the economy in a downturn. Bias onarts a downward Economic Activity, employment, and inflation. We have seen this exact dynamic whereby lower rates the two beaker activity and lower a self fulfilling process. We dont want that process to take root here. I would quickly touch on four principal changes that have emerged over recent decades and now amounts to the new normal. The first is, for these advanced economies, the trend growth rate is lower than it used to be. That is because population growth is lower, because productivity is lower. Secondly, the general level of Interest Rates has fallen around the world. Note, we andappier other nations saw, over the last couple of years, historically low unemployment. Really, labor Market Conditions that were essentially unprecedented over the last 50 years. Importantly, we saw that the benefits of a really strong labor market began to flow in the last couple of years to those at the lower end of the income spectrum. More of the wage gains when two people at the lower end of the wage spectrum. Use all labor force participation, a critical statistic that the u. S. Lags in, moved up against all predictions, and particularly for minorities and women. It is really hard to overstate the societal benefits of a strong labor market. Saw all ofing is, we that without seeing inflation troubling inflation. Inflation barely responded to that. In an earlier time, there was a tight connection between very 3. 5mployment, re. 5 percent, and inflation. We knew that connection was weak, but we have to live through it to see how weak it was. We took all of that in mind. My colleagues and i conducted the first ever public review of our Monetary Policy, strategies, communications, and tools, and announced results this summer. I think we made some quite significant changes to our policy framework and the way we think about the job that we do sue to support the public. That wed at everything learned, decided to think about maximum employment as a broad and inclusive goal, meaning that we would look at not just the headline number but maximum employment implies you are looking at minority unemployment rates, other unemployment rates, not just the top line. We also said we would only react to shortfalls in employment. This sounds technical, but essentially, if we have an estimate of what maximum employment might look like, if we are short of that, we would keep rates low. We are saying that even if we go past that estimate, that alone will not be enough to raise Interest Rates. We will wait until we see actual inflation or other trouble. On the price stability side of our mandate, our mandate is maximum employment and stable prices. We reaffirmed that our longrun goal remains inflation above 2 . To achieve that, we have to keep Inflation Expectations anchored at 2 , and to achieve that, we have to achieve inflation that averages 2 over time, and then following that running below 2 . This is all new for his central bank to deliberately aim to overshoot, and what it amounts to is a robust updating of our framework in response to the fundamental changes in the structure of the economy that we have seen evolving persistently over the last few decades. Alex lets combine these two that are playing in the u. S. Economy, putting the u. S. Economy in a global perspective, and the whole concept of increasing the inflation target. You are watching fed chair jay powell taking part in a discussion at the Bay Area Council business hall of fame awards ceremony. The fed chair said a lot of what we had already heard him and other border assay over the last several months, talking about the recovery being uneven and incomplete, pointing to the fact that more people are unemployed then at the peak of the financial crisis. He also said it was premature to think about the fed raining in its Balance Sheet, talking about emergency tools, but he did mention fiscal policy. He said we are not going back to the same economy, we are going back to a different economy. Those in services may need help for a while as they go back to different industries. He also singled out the tragedy for smaller businesses who have not been able to reopen. They businesses, he said, have taken generations to build. You can continue to watch that discussion on your bloomberg on live go. Otherwise, stay tuned, lots more ahead here on bloomberg markets. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Vonnie toronto, imfrom amanda lang. Welcome to bloomberg markets. Vonnie and im vonnie quinn. Top stories around the world. The s ps largest ever new component, tesla, is set to join month. Chmark next we will discuss what it means for the electric carmaker. The strength of the consumer, of toysorch, formerly r us, he will talk to retail as walmart gives a hazy outlook. Theexpands its ecommerce giant expanding an Online Pharmacy. It sent shockwaves through doug store chains drugstore chains and other subsidiaries. My metagecko amanda lets get a check on the markets. A tempered reaction. We will see if theres any strong reaction to those commons by jay powell, obviously reflecting what is happening in the economy with concerns about covid19. The forwardlooking markets, we want to know is the fed going to pull back any time . It was clear from jay powells remarks that it stands ready and will continue to use the tools as at its disposal. The market also knows very well in terms of whats moving here as a bit of a mixed picture. Utilities declined with real estate leading advances. We are seeing story specific stocks today, drugstores moving sharply lower. As vonnie mentioned, tesla getting a nice boost today, as it is confirmed it will join the s p 500. You might have been wondering how much of this rumor was priced into this stock. Apparently not all of it. It has been a big country being factor, but it is a rite of passage with tesla, about respect ability and credibility. Bearish voices would always push. 2 teslas ability for a consistent and sustainable profit. That is one of the things that this committee would scrutinize, and look at this chart on the terminal. You can see tesla has a crazy crazy high valuation right now. As the enter the s p 500 biggest ever company to enter into the index. Not only does tesla separate market cap exceed all of them combined, but there is now a question about valuation. 500,000y have developed vehicles this year, but look at developed 600,000 in one month alone. The change is folk the chain is focused on the growth strategy, and top and bottom lines of tesla reflect the valuation. Vonnie so it is a balancing act for investors, the fact that tesla gets into the s p, does that bring up questions . Ed there are crosscurrents of play here, vonnie. A number of index tracking funds, some mutual funds, will have to sell tens of billions of dollars of their existing s p 500 holdings to make room for tesla stock. It is also a liquidity right. Theyre looking for an exit, and now they know they are there are buyers out there for them to do business with. We know the S P Dow Jones committee is thinking about whether it will be one go or two separate pieces given the scale of shuffling that will have to go on. The consensus seems to be across the board that a bigger base of Institutional Investors holding onto tesla stock can provide stability in the longterm. Have tech ceo, like dorothea zuckerberg, and others like Lindsey Graham comparing any paying attention to it . Thesellers on both sides of isle think facebook and twitter are not doing a good job on content moderation. They have been hammering them on that. The policies that facebook and twitter put in place are disproportionately impacting conservative voices, conservative accounts on those platforms. Other than that, we also heard about section 230 of the Communications Act that gives legal Liability Protection from all websites that host content from thirdparty users. Committeesus from the members themselves, as well as jack dorsey and mark zuckerberg, is that something needs to change. There needs to be an update or an amendment, but no one put forward any proposals. Beyond that, depending on political points of view, there was a lot of question about how these but forms have been handling social media posts and President Trump, especially around the election. Both of the executives were at pains to point out that they were not editorializing those posts, they were simply linking to broader information that would allow users to make up their own minds about what people were posting on facebook and twitter. Mean, the administration is about to change over, it looks like. Might there be a change in the makeup of these committees next year, for example . Ed we are still waiting for the judge or for the georgia runoff, and the makeup of the senate. One thing that came out in the last few minutes was that this was supposed to be about content moderation, but there are antitrust questions as well. Some Committee Members on this Committee Also sit on antitrust committees and they want to know about facebook and twitters size and scale. Properties like instagram and whatsapp, but there were some questions about twitter, their ownership of buying, remembering that they shut that down. Jack dorsey said it was about difficulty in a competitive market. We have tiktok, which i am not a big user of tiktok, but they appear to be the same thing. Vonnie ed, thank you. Ed ludlow joining us. Newsets get to first word with Mark Crumpton. Mark groups representing doctors, nurses, and hospitals are urging President Trump to share information about the administrations Coronavirus Response with president elect joe bidens transition team. In a letter to the president , the groups say delaying the transition could cost lives as cases climb around the country. President trump has refused to concede the election and refused to start the transition to a Biden Administration. The head of nato is warning that the military organization would pay a heavy price for leaving afghanistan too early. The government the comments come a day after word that President Trump expect to withdraw a significant number of american troops from the country in the coming weeks. Jens stoltenberg says afghanistan is once again becoming a platform for International Terrorists to plan attacks. Hurricane iota tore across nicaragua today come hours after roaring ashore as a category 4 storm, along almost exactly the same stretch of the caribbean coast that was devastated by an equally powerful hurricane just two weeks ago. The extent of the damage is unclear because much of the affected region is without electricity and phone and internet service. In central america, people are again bracing for the potentially catastrophic consequences of iota, just two weeks after hurricane eta cause death and instruction, there are far more people affected by the previous hurricane. We also had strong winds and heavy rainfall which can cause flash flooding, river flooding, and landslides. Iota has diminished to a Tropical Storm and is moving inland over nicaragua. It is forecast to go across southern hunters late today. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im markcountries, crumpton. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn in new york, alongside amanda lang in toronto. Rising at the slowest pace in six, suggesting consumers are more hesitant to shop admitted more virus. That comes the same day that ismart joining us now gerald storch, the former ceo of toys r us come and former vice chairman of targus. You would imagine that life would be very difficult for them and only the ones that are selling the most survive. Gerald i think in most retail segments, the large retailers are doing quite fine. There is talk of missing estimates or something because they were only up. 3 on an adjusted basis versus point five cents versus. 5 . 3 , which is more than any of those numbers come a common revision on a monthly basis. What i look at as a retailer is how im doing yearoveryear because no one can adjust better. Now we are up against a prepandemic october a year ago. Things are pretty good. Total retail sales were at 5. 7 yearoveryear. That is a phenomenal number for any period of time. Take outade, when you gasoline and autos, was up over 8 for the same period, 8. 5 , so pretty strong with a lot of strength in certain sectors. Building materials, you saw the whopping home depot number of 26 . Walmart, many years excluded a few months, there are still pretty good numbers. This as so bad unless you are trying to sell apparel, unless you are in department stores, and then it is really lousy. The same for bars and restaurants. The classic pandemic losers. I think it is so interesting that the folks that were already kind of suffering for a variety of reasons really , mallsloped here, gerry and folks selling nonessential items. Professional apparel, youre really in trouble. Wayng online what is the forward for those businesses based on your history and all you know . Some of them are sitting on really valuable real estate that may not be used for the same purpose in the future. There are just too many of them. There are going to be a lot of grip sees. I said three or five times if you want to believe that, the retail that we will need in this rapid growth, ecommerce growth is simply accelerating many years of growth in the pandemic period, into such a short period of time. These guys are just in big trouble. The strongest will survive, but a lot of them are going to go out of business. Closing stores that is not an answer to anything. There was a great story i yesterday about all it does is shift sales to Online Stores. I think we will see many more bankruptcies in that segment. If youre vertical like a lululemon or a nike store, you can do just fine. Yout is your own stores, will do just fine. If youre in the business of selling somebody elses apparel, shops across retailers and retail stores, i think you are simply in big trouble. Those companies are going to shrink. Apparel has been losing market share for 10, 15 years compared to other sectors of retail. Out,is, as you point dramatically accelerated. You dont need to dress up to go to work and nobody is going to see what youre wearing. Some of that will come back. Dont be full by it. I think we are simply seeing a longterm shift into other forms of expenditure. Tonie you havent been able eyeball instore. You have been looking at parking lots, apparently. What does that tell you, what stores are people shopping at . Target,t is walmart, best buy, costco, the same big winners. That is where it is going to be. Malls are in a world of hurt because it is difficult for them to get traffic. Wants to go to a mall to walk around . That is simply not how people look anymore. They certainly dont want to risk covid. Even after summer, with permanent changes there are plenty of winners. Companies are having a tough time because Companies Like t. J. Maxx, for example, will be doing vastly better when stores are open because that is the kind of place where people will go to get deals on value deals and value on apparel. I believe it is a permanent shift in consumption behavior. It is not new. Most of it was taking place already, and it is accelerating quite dramatically. Plenty of winners, doesnt mean consumers are spending, are not spending. They are spending more than they ever were because they are not spending it on bars and restaurants and hotels and vacations. The idea that stores are down, that is not true. But if you are a mom and pop, an apparel store, you are in big trouble and i dont think there is an easy way out of that. Vonnie great to have you with us. Longtimeerry storch, retail executive, head of storch advisors. Coming up, we hear from the coach and are of the of bridgewater, ray dalio. That is on the other side of this break. This is bloomberg. Amanda welcome back. Currency and asset diversification should be driving investor portfolios right now, according to ray dalio. He spoke earlier at the new economy forum, taking part in a Virtual Panel with bloombergs erik schatzker. Ray every individual, every company, every country is how well they are depends on how much their income is relative to their expenses and how much their assets are relative to their liabilities. So you can see radical differences in the financial consequences of that. Second, the proximity to those who are printing and distribute them money are you a recipient of that . For example, a lot of the third world is not a recipient of that and is not a good financial situation. Then there is order. Political and also social order. You can see it differentiated in the countries that are controlling the virus and behaving orderly and well together. So you could see those differentiations reflected in and alsots behavior in the political and social conditions. Erik we know that markets are discounting mechanisms, ray. I dont need to tell you that Interest Rates are at zero, but i will tell everybody that stocks are rising to records not only in the United States but globally. Pe ratios have not been this high since the dotcom era. A 2. 5yearslumped to low. Do asset prices and valuations make sense given the economic fundamentals, some of which we have talked about here in this Panel Discussion . And for that matter, the policy outlook and what we can expect from a Biden Administration . Ray, what do you think . Ray when we look at Interest Rate markets, we look at the when we look at stocks, we look at pe. They are basically yields. To capacity of Central Banks print money and buy Financial Assets has essentially led the bond market to go to multiples that are somewhere between 100 times. You put a dollar out and you will get your money back in 100 years. It is because of the nature of you have to compare stock multiples. The bond multiples. So the capacity of Central Banks to put liquidity into the system and to have that liquidity go to produce high multiples is very real. Economics ofes the borrowing. In other words, if you can find something that makes anything you aren a zero or going to make money. That encourages the leveraging and the changes, so the financial flows that we are seeing, the market behavior is reflective of that. In my opinion, dont hold dont own bonds and dont own cash because they are producing a lot of debt and a lot of money to fund it, so that is changing the nature of capital flows. Its also changing how those flows go to china in terms of the comparison of that market, particularly as it opens up. So i think it is behaving sensibly, but dont use old multiples as reflections of the limitations of what is expensive. Ray dalio of bridgewater, speaking from bloombergs new economy forum. Time now for talk of the hour. It has been expect it for some time, but today is the day amazon announced plans to become an Online Pharmacy for kailey leinz looks at what is next. Kailey we knew this was going to come, that amazon was going to push deeper into health, especially after its acquisition of pill pack a little more than two years ago. Amazon munching an additional pharmacy and will be munching discounts to prime members. The first time shoppers can order prescriptions directly on amazon. This will fall into amazons Online Stores business that makes up the lions share of their revenue. It also means amazon is a competitor for pharmacy giants like cvs, walgreens. Those two stocks are the worst performers in the s p 500 and todays session. Smaller drugstores are falling as well. Theand walgreens are largest in terms of market share when it comes to the pharmacy space. 25 have about 19 and market share respectively, and amazon entering into the market doesnt automatically mean it is going to become common it. It could in theory have barriers to entry of people are more reluctant to pull away from the physical pharmacy and seeing a pharmacist in person. Moreeople are shifting toward online during the pandemic. And that is where amazon is a real threat. It makes up about 15 of the ecommerce market, 200 million monthly users. If they can capture a few of those and turn them away from drugstores, that could make a big impact, amanda. Amanda is it just pharmacies that have a reason to fear here . Kailey it seems to go just a little bit beyond that, not just drugstores operators, but disturb it is like mckesson, cardinal health. Cardinal down by 6. 3 . They will be doling out fewer pills to those physical pharmacies, and even beyond drug distributors, you are seeing other Companies Like cardinal health, those insurers under pressure, likely having to do with amazons plan to offer prescription discounts to prime members. It is sending ripples across the health care space, amanda. Getsa as it does when it into a new space. Kailey leinz, thank you for that. From new york and toronto, this is bloomberg. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. With i am Mark Crumpton bloombergs first word news. Lindsey graham is denying he urged an official to throw away mailin ballots. Georgias secretary of state said senator graham asked him whether he had the power to toss all mailin ballots from certain counties, arguing clerks may have accepted ones with nonmatching signatures for political reasons. Senator graham calls the claims ridiculous. President elect joe biden is moving ahead with his transition to the white house, although the Trump Administration is still refusing to offer help. Mr. Biden and Kamala Harris are meeting with National Security experts today to discuss readiness at key agencies. Diplomatic, intelligence, and defense advisors will brief biden and harris although the Incoming Administration has been denied access. Former president clinton says it is clear President Biden will work to strengthen ties with nato and the world health organization. Mr. Clinton