People should own what has worked for the past 10 years. People get excited with the disruption type of names. When you look at historical cycles, you have never had a time when that leadership continues into the next cycle. That isthe fact that where the leadership has changed, i think that plays along very closely with what you were just talking about in terms of market performance. Romaine we are speaking with dan suzuki. A very interesting day on wall street what do you make of it . Rising chinau. S. Tensions rears its head again. Indexes close with a little bit of a swoon toward the close. How are you thinking about chinau. S. Tensions . Is this something that kind of keeps us locked within volatility and range . Dan it certainly has the risk of derailing the rally. The thing with this rally, one of the drivers has been falling uncertainty. New, we did not know much about it, it was like flying in the dark. More optimism around the treatment and vaccines, that has been decreasing our uncertain. We have a sense of what the lockdowns look like, what the opening is looking like. That it couldhink add to the volatility. Romaine uncertainty surrounding the upcoming election in the time, it is same hard to be bearish in an environment where most people assume the fed has set a floor under risk assets. It makes it hard to bet against this market. When you think about the concept of the put, it is not a new concept. It goes back at least to the greenspan era. That is where the fundamentals will fundamentally win out. There is only so much that the fed can do to offset weakening fundamentals. If this gets worse, it is very likely the fundamentals will win out. The fed buying has actually been slowing, so the benefit has weekend. Money, injects liquidity, but is that liquidity getting out there to the broader economy. You can question how efficiently that is being spread to the economy. Scarlet will get a jobs report, is it at the end of this week . Next week. At the same time, a lot of people say this is backwards looking at priced in. At what point does it become apparent to the market, your tosis that if we go from 100 zero, then back to 80, but a lot of businesses are not viable at 80, at one point do people start to make peace with that and reconcile that with share prices at the moment . Dan you are probably realistically looking at 23 jobs reports out where you are getting more of the information. One of the interesting things that comes out of the jobs report is where they report if they are permanent or temporary layoffs. I like to look at Temp Staffing trends as a bit of a leading indicator. I think the jobs report will have more in terms of the piece of that trajectory a couple of months back, especially on the of ppp. The expiration eight weeks, once that timeline is up, they have incentive to cut those employees off if they are not at that high level capacity in their business. Romaine are you concerned about the carry through for Consumer Spending and some of the other metrics that have provided the impetus for the bull market we have come out of . Absolutely. You see the increase in permanent layoffs, business closures. What people are not talking about is what it means to the cut in investment spending. Right now, there is a short term view. Technology has become a huge part of overall spending in the u. S. Most businesses that you talk to will be cutting the spending budget. It is too early for that to float into the data but i think that is something to think about as you move toward the third and Fourth Quarter this year. Scarlet until we get to that point, where you want to be in terms of sectors, in terms of regions . Dan you definitely want to have diversification, not all one or the other. The market has clearly been on a tear since late march. You can actually up your quality bet and still not perform and outperform still and participate in the rally. Verylly, this is theroversial but i do think risk reward is very positive for china. They are treating it like a 40plus Percent Discount and there is plenty of room for stimulus. Scarlet dances okie is deputy cio at Richard Bernstein advisors. That does it for the closing bell. Whatd you miss . Is next when we will be looking for the prospect for ipos in the market at large. This is bloomberg. Romaine broadcasting live from new york to our viewers worldwide, i am Romaine Bostick alongside my cohost, scarlet fu. This is why did you miss. Notlet the s p 500 did close above its 200 average. There during the trading day. The white house is considering sanctioning chinese individuals, companies, or institutions in a response to their plans to possess a National Security law it hong kong. The worst of that the economic pain is behind us. Is ipos asopening well. We have seen warner group set terms today for what could be a 1. 8 dollars share sale. Our next guest, Kathleen Smith from renaissance capital, and she joins us now for more insight. End have you seen on your when it comes to Companies Ready to go public . Kathleen we are seeing a large pickup in a cavity. That is because the returns on the already treated ipos have been strong. Etf,nage the ipo, renaissance ipo index. 14 sodex has increased far this year, well ahead of the s p. The ipo performance has been very strong. When that happens, basically, these returns are the fuel that drives the ipo issuance. We are seeing a rush of companies trying to tap the market, and some very Big Companies including warner music. Romaine im curious what you make of the idea here that a lot of companies, it is not so much about the performance or return out of the gate, but some of the market volatility. Volatility seems to have subsided pretty substantially from where we were back in march. Kathleen the returns i mentioned are all returns after the first day of trading. These are truly aftermarket trading returns. It is true, the volatility has to be down as well. Which hitat the vix, a huge level, 82 in midmarch, is now down at about 28. Ipos, when they are priced, are priced with volatility in mind. It means that companies have to take an extra discount to account for that. Ipos come out of the gate, they will have businesses that are adaptable to the environment we are in, so we will see covidfriendly more Digital Companies that tend to be the bread and butter of the digital market of the ipo market. Scarlet a lot of that has to do with the work from home phenomenon. We spoke earlier with nelson griggs, president of the nasdaq stock exchange, and we got his outlook. We are starting to see new deals pop up. We have a november election. November, a for the markets to hold, there is a chance we will have a healthy ipo market. Scarlet what do you want to talk about covidfriendly stocks or those work from home stocks, instacart,ordash, all unicorns people have been looking at to go public. When did these guys start coming to market . Kathleen we think we will see those Companies Come to market between now and the election. 2 billion a potential ipa from a Company Called royal pharma, a portfolio with 2ty interests billion in revenue. Albertsons, the Grocery Stores have done very well and albertsons has been preparing to do up to about a 2 billion ipo. I will add to those some companies that are moving forward, zoom info, a sales platform, fastgrowing, very profitable. An online car platform. Coffee is going to be the Largest Global ipo for 2020. It will be done in amsterdam. We are seeing large companies. The whole scenario is perfect. Said, conditions have to stay, but we have been seeing these increased conditions over the past couple of months for ,ew, Fast Growing Companies indexes and etf to track those indexes. Scarlet a lot of big names to look ahead to. Thank you so much, Kathleen Smith. Great speaking with you. Lets take a look at airline related companies. Airline related economic troubles certainly persist in europe. We spoke with the ceo of ryanair, who plans to appeal a german bailout plan for lufthansa, saying it would distort the entire market. The european commission, they will also be speaking to the swiss government, austrian government, and belgian government, all to lufthansa group, who is running around europe gobbling up state aid like a drunken uncle at the end of a wedding. Ryanair, we all compete with live tensor in the german market. The tens is receiving enormous payroll support. They need another 9 billion, which they cant really justify. But it allows them to buy up more competitors. State aid subsidies. I want to point out that i got in touch with a live tons a spokesman and they said, we will not comment on mr. Olearys statement. They wont even defend it. They are too embarrassed to be over enough all to be hoovering up all of these subsidies. Are you reworking your plans for germany in light of this bailout. Will you be getting out of germany completely . We continue to compete with lufthansa. The difficulty for us and the other airlines, who are trying to compete in the german market, we dont receive state aid, we dont receive bailouts whenever something goes wrong, but it is grossly unfair that we now face competition over the next five or six years. With lufthansa trying to jump all over us. Isnt there a tacit understanding that those rules are not seriously in existence to create a level playing field, level competition. This is not that kind of industry, otherwise you would italia, you al would not have a British Airways and iberia. Countries need to have their National Airlines for security, economic, and employment reasons. Anyhey are not receiving you can government money. Ryanair is the Biggest Airline in europe. We can survive through this pandemic. Yes, we are receiving the same payroll support, but that is enough. We do not have to have multibillion subsidies showered upon us. I think there is a bigger issue. You have the German Government bailing out the tons a, the sa, the dutchufthan government bailing out klm, and they are lecturing other companies, you all have to play by the rules. Germans are rich, 55 of state aid. It is the German Government who lectures every other European Union member about complain with the rules. Ity break the rules when suits them. People flying across europe in lowcost carriers. It is always late and expensive. Romaine you were listening to michael oleary, the ceo of ryanair. Some breaking nose. Breaking news. The Trading Floor in chicago, they say they plan to reopen on june 8, so a little less than two weeks from now. Of course, the New York Stock Exchange today reopened its floor partially to physical traders for the first time in a few months as well. Lets get a check on the latest business flash headlines. Microsoft is trying to prove that minecraft is not a one hit wonder. A new version, minecraft dungeon, will be filled with slash and hack action. Macys selling bonds. Forproceeds will be used all borrowers. Last month, macys was exploring ways to use its real estate to bolster liquidity. Federal workers are concerned their bosses will force them back to the Office Without proper protection. Toy say agencies approaches returning to offices have been a little but uneven. They have told many workers to plan on staying home. That is your business flash update. Scarlet of course, we need to talk about what is going on here with china and the u. S. Bloomberg is reporting that the white house is considering sanctions over chinas consideration of the hong kong National Security law. Tell us what we have learned so far. What we know is that the Treasury Department could impose controls on transactions. Businesses,cials, and financial institutions, for implementing the new National Security law that is curtailing the rights and freedoms of hong kong citizens. The Trump Administration is considering a range of sanctions but has not come to a decision to do that yet. Romaine duke at least have a sense of what options they have on the table . Of directre a number sanctions they can announce from the Treasury Department. The white house could announce executive orders where they start to give hints and sick is that chinese authorities could signals thatnd chinese authorities could be targeted. There is one bill that wants to go much harder on china for this exact reason. So there is a lot of pressure from all parts of washington to take some action. By considering sanctions on chinese officials, it would at least be on people responsible for making the decisions. There are also some reports that perhaps the white house wants to restrict Chinese Students and researchers from being able to come to the united states. Saleha it is unclear how much more they can lean into it. Did say already that hong kong may not be a Financial Hub anymore. He is looking to really cripple them where it matters. Institutions, businesses, officials, that would be a pretty loud and clear signal to china on how the Trump Administration feels about this. Romaine thanks. Scarlet all right. Once again, bloomberg reporting that washington, the white house in particular, is considering imposing sanctions on chinese officials, financial institutions, and Chinese Companies in response to the National Security law they meant to impose on hong kong. That gets to how a lot of people were expecting the protest to reignite in hong kong. There is meant to be this mass protest for wednesday. A lot of the bankers and people who work in downtown hong kong now have to get right back into their home offices again. Romaine there was really a big move a while back to really try to tamp this down and encourage the Chinese Government to consider some sort of compromise. We will see if they speak out against this this time around. Scarlet coming up, we will talk about oil. We will look at the Global Energy market with there are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Romaine we saw oil rise today as opec producers displayed some signs of confidence that the market is stabilizing. For more on the energy market, we want to bring in brenda schaefer, Georgetown University professor ford eurasian, russian, and Eastern European studies. Great to have you. Always love to get your thoughts here. A month ago, we were looking at an oil market that was effectively being faced with an unprecedented drop in demand combined with an unprecedented supply of oil. Out . Ll that been worked have we put all of that behind us given the increase in prices over the past month or so . I think to understand what has happened, we need to think of oil and the economic recovery postlike post9 11 than recession. We did not have a downturn caused by economic forces. It was caused by policy. Once these policies have changed, we have had the opportunity for demand to pick up. Economic roadmaps post recession dont really work. Whether it is the united states, the opecplus agreement being implemented even more than anticipated, production being knocked out in the united states, it looks like oil is recovering and will probably even search in the third and Fourth Quarters. Scarlet i suppose in terms of news on the supply side, today you had algeria and nigeria lifting the selling prices for their supply. How significant is that and what does it mean for their ability to continue to raise prices . We are seeing this in a variety of places where there is a discount. Definitely a sense of confidence from the different producers. Romaine a lot of the dislocations we saw at least this year seem to stem from the breakdown of the relationship between saudi arabia and russia about who should cut, whether they should both do it together. What is that relationship like today and are we at risk of seeing a disagreement in the near future with regards to these production levels . Brenda he Saudi Arabian and russian supply trends really created the supply overhang, but the crisis in the oil prices is really about the demand side. Essentially whatever would have happened in terms of production, when you had the level of demand knocked out in terms of the lockdown, it is hard to see oil going anywhere else other than down where it did. Likeseems actually again saudi arabia, kuwait, uae, really taking higher cuts than they have committed to in the opecplus agreement. Steps being taken within russia to make sure that the companies actually follow through with the commitments. Scarlet could you compare and contrast the demand for gasoline versus diesel fuel based on peoples willingness to travel, how they are traveling, and what that means for producers and refiners in particular . A lot of people who write assessments about what the world will look like postcovid19 are people lucky to have jobs like yourself, myself. But this will not be the major trend. Jobs cannot adapt to working at home. There will be less demand for Public Transportation as people fear p