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the s&p 500 up .3%. the big outperform or are the small cap domestic stocks, a safe haven away from of the global macro tensions we are seeing. 5/30 curve, the steepest you have seen going back to march. that risk on tone continues here ash crude markets, up 3%, opec-plus continues to extend discussing those record cutbacks they are seeing for an additional month. for more on this uncertainty between risk on an risk off we are seeing in the markets, i want to welcome carol schleif, abbot downing investment deputy chief investment officer. today we are getting some risk on tone but we are fluctuating between gains and losses. the dollar, copper, oil are moving. what does this tell you about what you are seeing in the market, perhaps some hedging going on? it is telling us investors are taking a step back , taking a look at how far the markets have rebounded off of the bottom. while you have some encouraging green shoots, it is a broader rally coming up, there still remains the potential for worrisome trends. we still had to do with the fact that we still have tens of millions of people unemployed .nd need to get back to work hopefully we don't have a second outbreak. there are not things on the horizon that could potentially balance it out. you have that back and forth between the classes have full and half empty, and that sideways movement. now we are through most of the earnings season. solidl not have good, feedback from companies for another six weeks or so. taylor: some of those green shoots you are alluding to have been supported in part because of fed chair jay powell. given you are a fellow cfa charter holder, are some of the models that you traditionally used still working come even with this panel put me -- powell put we have in place? carol: it is hard to argue that they are. how do you run a capital model when you're risk premium is negative? the numbers do not work. there is that assumption where everyone is trying to adjust model. models come in and of themselves, are very fallible to the inputs that you put in, the expectations you use. one of the biggest push/pull set you see now is are we going to see inflation, deflation, i'll be going to see this very low level of inflation? that i'm have a chart showing and some of that push pull that you see is within the russell 2000, small caps outperforming the s&p 500 for a second day. are you still bullish on small caps? carol: we have not really been bullish on small caps. we have been focused more on large cap domestics. small caps, there will be some interesting places to participate, but there is also the potential for a lot of pain points, depending on how soon we can get the states opendoc, consumer purchasing back in play. a lot of them will be subjected to that. although on the plus side, they are not as subjected to the vagaries that everyone else is along the supply chain. taylor: another thing that we talk about is seeing the nasdaq 100, which has been a leader in the last few months, seeing a little bit of a pullback. still off only 1% from its record highs. what is your take on the leadership that we have seen within the big tech stocks? argue in as hard to post-covid environment that we will back away from technology. what the markets are telling you is there is every expectation that technology continues to play a pivotal role, not just in our individual lives, but in our work from home lives, corporate lives, all the way around. similar to the way air travel ,as forever changed after 9/11 you would presume corporate, work from home life will forever be changed post-covid. tens of millions of people have workn it is functional to from home, we just need the technology. there are a lot of different aspects of technology that will continue to participate. the largest ones have the cash and the ability to build out and to enhance their abilities and our abilities. taylor: are you able to give us any names, sectors, some of these work from home pandemic stocks that you could see taking advantage of the structural shift you are seeing in the new work from home environment? carol: we are not allowed to give individual names, but thinking through sectors, you are thinking about artificial intelligence, communications, cybersecurity. there will be a need for that. you are also talking about pipeline and infrastructure. as we try to build out, we need wi-fie sure high speed access is ubiquitous, especially if the work from home pushes people out of the big cities more toward middle america, smaller cities. we will need to build out that infrastructure. taylor: carol schleif, great to have you on. you are on, you can explain how armncorporate that negative into finance models. let's go to karina mitchell with first word news. : pentagon officials are dissing themselves on president trump's warning that he could use the military to clam down on protesters across the country. an official said today that it would be better to rely on the national guard when needed. the president said he could deploy the military to end what he called "ryne sandberg is this around the country." disturbing numbers in florida. coronavirus deaths in the state rose 2.8% in the past week, the biggest jump since may 8, and more than twice the previous week. florida began a phase reopening on may 4. russian president vladimir putin is ordering his government to take quick steps to repair the economic damage done by the pandemic. the plan contains measures to stimulate economic growth, raise incomes, and reduce unemployment. the government plans to spend $73 billion before 2021. even before the coronavirus, their economy has been battered by a shop that sharp drop in oil prices. global news 24 hours a day, on-air, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina maitchell. this is bloomberg. ♪ >> welcome back to bloomberg markets. i'm erik schatzker in new york city. it's always good to learn lessons from people who make mistakes, but what you want to do is find out what the winners did. for that, we are here with the dennis lynch, one of the year. his institutional growth portfolio is up 24% this month alone. welcome. dennis: thank you for having me. i'm looking forward to this conversation. you have built when i make described as the perfect pandemic portfolio. is this just a matter of luck, extraordinary foresight, or a combination of the two? if you ask any manager about their short-term performance, if they don't use outlook is one of their answers, you may have the wrong manager. in the short term, markets are driven by perception, sentiment. these things are hard to anticipate. part of our success -- going to say,st as much as i admire it, let's dispense with the modesty. although i did cite a short-term metric, you are up 45% in the past year, an average of 21% annually for the past five years. your record even over a longer amount of time is the same. you are beating 99% of your peers, so there is something to this. dennis: thank you for saying that. portfolio, about the initial question about being fortunate, a lot of the companies that we were invested in happened to provide services. when the world goes through something dramatic and unexpected as what we are facing, people reassess their habits, think about how to save time and money, get things done. in a way, we were fortunate to have specific companies that would benefit in that kind of environment. fact that your companies are getting a tailwind from the pandemic, as opposed to other business models that are getting crushed, my understanding is it has to do of things,nds characteristics that appealed to you before this pandemic showed up. go into that in more detail because that will give us more insight into your thinking. why are those companies, the ones that provide productivity enhancements, the ones that you want to own now, compared to the ones that you wanted to own five years ago? dennis: great question. generally what we try to do is collect unique companies and own them for many years. by unique, companies that we think have durable, sustainable advantages. we also try to collect unique people. while he cannot own them, we hope to keep them around in a continuous manner by having a strong culture ourselves. the reasons we own them going into this year has to do with a longer-term box. many of the companies before this had what i would characterize as secular growth opportunity. they demonstrated that in the form of software service, e-commerce, delivery solutions. certainly, they were already attached to areas of growth. what has happened more recently, unexpectedly, some of that has accelerated in many cases. erik: that would explain shop if slack but noty or moderna. how do you end up with what turned out to be one of the most promising vaccine developers? we don't do a lot of biotech investing in general. it can make some sense to bet s mall and win big because of the outcomes connected to those companies could be large. we tend to look for companies that may solutions have different types of applications, as opposed to just betting on one drug or outcome. what is attractive to some of the biotech companies, including moderna, is that quality, that if they have a platform that works, it could work in many cases, as opposed to having one shot on goal, as you have in many biotech scenarios. erik: you used to have a lot of exposure to the so-called fang stocks. amazon is really the only one left in size. facebook selling down tell us about your investment philosophy and process? generally we like some of those companies, and if you look across our whole top or, we still have meaningful exposure to a company like facebook as well. thesey speaking, as companies have gone to be so big, and now their dominance seems obvious in hindsight, you run into problems with a very large company that even if your end markets continue to have growth potential, there are issues that we are hearing about. regulatory challenges, risks, complicated questions there. we will always be looking to mourn where we think the best opportunity set is and not try to be dogmatic and how we invest. a combination of the size of those companies today and the ability for them to compound at a higher rate going forward, in relation to some of the other things that we were invested in the last 2, 3 years, which were smaller companies with big upside. i think that is why we have made the transition. hopefully what it indicates about our approach, we are not dogmatic, and we are going to look to where the opportunities are instead of digging there is one formula or code that will always work in every environment, or that certain companies are the only was to focus on. erik: amazon is a trillion dollar plus company. certainly attracted some regulatory attention, political scrutiny. yet, it remains one of your top holdings. is there a special reason for that, do you share the same concerns about amazon's prospects, as you might a etc.?ok, netflix, dennis: we think their prospects continue to be bright. one thing that has always differentiated amazon from these other stocks it is grouped with, there is some real world, challenging solutions that they provide in the form of logistics, things that exist in the real world. their competitive advantage has not just been the aggregation via the internet or other means of large customers, making money due to the scalability of those approaches, but a lot of real-world invested that takes time and energy and is hard to replicate. i have had a history of using amazon has my favorite stock when asked the question, simply because the real world and the sort of online plus real-world combination is hard to overcome. it also has an exceptional culture. a ceo and founder who really thinks long-term, is willing to make investments in the short-term, to get to a much bigger and again. that is why we are so focused on amazon. erik: one last one for you. it has become harder for many people to operate during the pandemic. for an investor like yourself, you cannot visit companies, kick the tires, meet with ceos and eyes.e whites in their as that made it difficult to build conviction about new investments? dennis: i don't think so. it is amazing. one of the most interesting developments during this period of time is the ability for videoconferencing, enabling people to interface, get to know each other, and how fast that has been adopted is something that i think is commonly accepted. there are tools to engage with companies, new investments and old, that have made that less challenging than you might think at first blush. ultimately, we are still happy. my perfect day is reading for three or four hours, getting to do analysis, not necessarily going out on the road and visiting companies. that is my personality. we have all sorts of people that have different ways to add value to the team, and they have been able to do so in a manner with videoconferencing that will hopefully be effective going forward. erik: dennis, great to talk with you. thank you for joining us here on bloomberg television. you speak to somebody who manages as much money as he does, $44 billion, and beating 99% of his peers. this is bloomberg. ♪ taylor: hundreds of facebook employees staged a virtual walk mark zuckerberg's decision not to take action on controversial posts from president trump. he hosted a nearly hour-long video call with civil rights leaders. for more on this ongoing issue, we are joined by kurt wagner. explain to me the stance that facebook has taken and what looks to be in sharp contrast to what some other social media companies like twitter, for example, might be doing. zuckerberg said on friday that he was not going to review the post from president trump where he said once the looting starts, the shooting starts. twitter said it was against its guidelines. zuckerberg said he wanted to leave it up because he thinks people need to see what elected officials like president trump say. he is really calling on the side thatee speech, making sure even if something might feel uncomfortable or come close to violating facebook's policies, that they should err on the side of making sure it is out there for, i guess, for the citizens to see. taylor: what have facebook employees said is the reason for the virtual walk out? it has been an unpopular stands for a lot of employees. yesterday, we saw a number of employees, including executives, going to twitter, tweeting that they disagreed with zuckerberg, that they did not think facebook was coming down on the right side of history with these decisions. so there was a virtual walk out. obviously, no one is at the office right now, so it is a little more symbolic than literal. people just did not go to work that day, did not sign on. it is rare. facebookot seen employees take a public stand like this. there is a lot of discussion even heated arguments internally when stuff like this usually happens, but for it to spill over into the public arena is rare, something i have not seen from the facebook employees that i have seen in the six years covering the company. taylor: how does mr. zuckerberg respond now? kurt: i don't think there is anyway he can walk back his decision at this point, even though he has employees pressuring him to do so, even quitting in protest. , he has thought a lot about this, made up his mind. i don't foresee him walking this pack. i think it will be the first of probably many tough decisions that he and executives have to make. we are five months from the election and i don't anticipate things will get quieter until then. taylor: our thanks to kurt wagner. stay with us, we are speaking with rebecca felton from riverfront investment's on this could -- disconnect that we are seeing in the markets. this is bloomberg. ♪ karina: i'm karina mitchell with bloomberg first word news. joe is slamming president , saying he isse fanning the flames of hate. the present of democratic nominee spoke at city hall today, accusing the president of being more interested in power than principle. biden called on congress not to wait for the november election to address inequities in economic opportunity and criminal justice that disproportionately affects african americans. the european union's top executive and boris johnson will meet later this month for talks that could give momentum to the stalled brexit negotiations. negotiators resumed a fourth round of talks today but there is little hope that they will reach a breakthrough. on januaryft the eu 31 but remains in a transition period until the end of the year. italy is urging citizens to work together to revive the country as it bears to lift restrictions on domestic travel. with a number of coronavirus cases continuing to decline, italians will be able to travel freely around the country again beginning tomorrow after almost three months of confinement to their home regions. global news 24 hours a day, on-air, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina maitchell. this is bloomberg. ♪ amanda: live from toronto, i'm amanda lang. welcome to bloomberg markets. taylor: i'm taylor riggs in new york. we are joined by our bloomberg and bnn bloomberg audiences. here are the top stories we are following from around the world. the battle between the bulls and the bears. risk assets and havens rallying together, creating a complex picture at an important time for pricing risk. a preview of zoom earnings. the videoconference company faces a big test after getting $20 billion in market value since it last released results in march. extending those production cuts. oil moving higher as opec and its allies are closer to a consensus on extending production cuts to prop up the oil market. let's get a check on those major averages. as you say, we are seeing a bit of a tug-of-war. on the broader averages, you can see it is the nasdaq, tech not offering a lot of support. the s&p 500 doing a little better, thanks in part to energy. financials are doing pretty well. materials are strong. consumerfacing stocks, staples, moving lower today. the nasdaq is doing better than it has been most of the day. dthare still seeing the brea pretty strong, two up for everyone that is down today. the question is have we seen the bottom in the economy, should sentiment be turning? rebecca felton is the senior market strategist with riverfront investment group. i guess i want to start there, in a big picture way, there is so much going on in the world. you have the potential for new stimulus in europe, the central bank standing ready, including in canada, ready to be the asset purchasers if they need to be. what do you think is driving the sentiment most in the market today? rebecca: thank you all for having me. certainly, stimulus has to be part and parcel to what has been the backstop, literally and from a perception standpoint, for the last month or so. it is expected we will get another package in the u.s. but the details of that will probably be hammered out as different parties put their stakes in the ground as to what is most important to them. taylor: interestingly enough, i've been looking at the defensive sectors throughout this pandemic. frankly, it has been big tech. the nasdaq 100 only off 1% from its record highs. what do you make of the strength we have seen in the big tech market? rebecca: across the board in the last week or so we have seen breadth widening. it is not so much text, but also as you mentioned, energy, materials, more expectation that we have seen the worst from an economic standpoint, and investors are willing to look ahead to a recovery in 2021 with perhaps q2 being the worst of the economic data. after we get that behind us, the expectation is earnings could start to rebound, even though those companies are not giving guidance. early on intech this covid shut down. some of the more defensive names were leading, but we have seen a huge resurgence. if you think about the last couple of weeks in energy, materials, industrials, even some of the discretionary names. if you think about what has participated off of those march lows. there: there is a sense is another shoe to drop, particularly when it comes to employment. we have seen these dramatic reactions to the pandemic and lockdown, but as businesses work through their own market positions, laos will follow, we will see the latencies on the credit side, spikes six months after all of this. your impression of how the market will have to price in that reality coming home? rebecca: low interest rates, the fact that there are not a lot of alternatives -- you cannot put your money under your mattress in terms of growing assets, true wealth. the expectation is you will still see equity markets move ahead, and we have to acknowledge they will be expensive. getting back to employment, one of the things we are encouraging -- encouraged about, there is an improvement in the continuing claims. that could signal the worst is over and the economic rebound is in place and rehiring is beginning. we are certainly looking forward to that number on friday. taylor: another data point you're looking at is a re-examination within the housing market. how do you see a recovery happening in the housing market given the trends that we have been noticing in the past few weeks? again with the caveat that hiring continues and we have seen the worst, we know we came into 2020 with very high housing numbers, the highest we had seen in years. among younger generations, homeownership is ranked very high. even some of the leaders in the building, realtor associations have noticed a pickup in recent weeks. they have been doing virtual showings, you can now close online. there has been a pickup in various markets across the country in sales. it is expected that that would continue. evidenced certainly be of confidence in terms of buying a new home. you cannot get much more confident than that in terms of future looking. amanda: in terms of what may try that confidence, there has been a real domestic focus in every country of the world, and some of those big geopolitical stories that we were following at the end of last year have fallen off the radar in some ways. should investors be thinking more about the u.s.-china relationship, what is happening in the eurozone, brexit, these things that will have major implications for how these markets will fare? you are right. the tensions with china is something we have to pay close attention to. with bigger than trade now concerns about economic and military actions in that region. if you were ever where we were last year in these markets, we were rocked with volatility when a trade concerns were at their height. we know that can be problematic, particularly when you think about the amount of trade, not just with this country, but nations around the world, europe, japan, they are all trade partners with china. this can certainly be a disruptive to equity market progress. taylor: our thanks to rebecca felton of riverfront investment group. is set to report first-quarter results after the bell with antiseptic -- investors anticipating a large jump in subscriber growth because of the lockdown. but can the company deliver? and earnings preview is ahead. this is bloomberg. ♪ taylor: this is bloomberg markets. i'm taylor riggs in new york. alongside amanda lang in toronto. as we keep buying the economic fallout from the pandemic, we spoke to mark mobius to talk about future spending and emerging markets. ed recovery because that is what the markets are telling us. the markets are telling us they have gone up by 20 or 30%. i'm talking emerging and developed markets. shaped recovery is in store, actually. there is a divorce from the economic reality and the socio- economic impacts that we are seeing on the streets. there is a racial element happening in the united states. the market is looking past all of that simply because they and investors know central bankers have their back. is that ultimately going to blow up in their face? >> i don't think so. what we are hearing from companies around the world is once a locked on his over, they will get customers back in droves. here in munich, i see people waiting in lines outside zara, apple. that means people want to get back to buying again. over, is lockdown is think you'll see a big recovery in these economies. of course, the numbers will look terrible. you will have actual shrinkage in the economies around the world, but don't forget, when you look at the numbers next year, you will see an incredible increase. let's say the economy shrunk by 6%. next year it goes up by 1%. that means 7% increase. i think it will be more like a v-shaped recovery. >> i hear what you say about consumers, but nevertheless, the u.s. consumer was a massive part of the global story before covid-19 hit. it is pretty clear we will see a structurally higher level of unemployment in the united states, payroll numbers on friday, and that consumer spending power, while it will recover, it will not be there in the way that it was. while earning estimates have come down, we have not fully felt the impact of that unemployment story we are seeing at the moment. most people are being supported by government programs. when that changes, we will feel the force of that. do you agree with that, or do you still think the consumer can act as a catalyst? you are right. a lot of people will lose their jobs permanently. this is not just true in the u.s. but in emerging markets around the world. i am hearing from companies who say we don't need 20 people, weekend -- we need 10. the answer to that, and i think iss is what trump will do, start a new deal program. i think he will start a massive program to improve the infrastructure of the u.s. which will employ a lot of people. i think that is the only answer to the u.s. and other countries around the world. they have to use these dollars, the currencies they are getting from these multilateral is the programs, to improve including infrastructure, all sorts of things that you can do to put people back to work. is, iazing thing for me just let that the south african rand, and i could not believe it. appreciated it has against the u.s. dollar by 10%. happening in a country, which by the way was downgraded by moody's to junk status -- why is that happening? recoverye a v-shaped in these markets. that to extrapolate developing markets, and we see a new deal program similar across the board. coming from ants emerging market central banks and stimulus at the same time in developed nations as well. how do you cherry pick the opportunities were that will pay off, and where that will come back to bite you? >> that is a good question and that is why we are emphasizing companies with strong balance sheets. a number of companies will not be around next year. we have to look for the survivors. then we had to look at those companies that will benefit from this huge infrastructure spending we see coming down the road. that was mark mobius speaking earlier on bloomberg, the founder and principal at mobius capital. we are keeping our eyes on zoom. of the company has added $20 billion in market value since the pandemic started, because of the use of its technology. the question is can you deliver an earnings after the bell when investors are hoping to see justifying this price. joining us now is pat walravens of jmp securities. you are evidence, we are all using zoom. but willpular, that translate into the numbers that investors need to see, revenue and profit? pat: thank you for having me. i think that we are looking for tonight is, there has been this massive adoption of zoom, number one. they went from 10 million daily users to 300 in april. that is the first thing that people look at. the second thing is what you mentioned, how that will translate into revenue and then billings, which basically measures, to business they did in the quarter. my numbers are pretty far ahead of the street for that. the last thing we will all need to look at is, are we convinced that zoom is safe or all of us and all of our kids to use? taylor: i'm curious if this pandemic has just pulled forward future demand, or if we can still see more demand in future quarters? that is another question that investors are absolutely wrestling. -- wrestling with. it will be hard to match what we saw this quarter. certain behaviors that we've all been doing. classes on, yoga zoom. when the studios open back up, people will go back. in our business, virtual to beows have turned out great, and i think it will be a fundamental change in the way that ipos are done, a lot of them will be done over zoom or their competitors. how much of it is going to stick? that is another big factor that we will be looking at. along with that we have to ask what are the barriers to entry here? one of the things that made zoom's rise in you so interesting is it is not the only technology out there, and some would argue it is not even the best. some would say -- i would say ease-of-use -- that has brought it to the forefront. it is not hard to create a competitor. pat: it is not that hard to do it. -- thet that zoom founder and ceo started at webex . there will be a lot of computing solutions, it is not that hard to create them. it is all about what solutions make their users happy. i am sure you have had eric on the show before, and he will say, if he keeps his users happy, this product spreads naturally and superfast. he has done a great job with that so far. they definitely hit a bump in the road with all of the security issues, the zoom bomb ing, but they have that this improvement process that is making people feel safe. as long as we are happy, they will keep their moat. amanda: appreciate it. pat walravens, jmp securities. thank you. it looks as though the opec-plus countries may be inching closer to a compromise. we will bring you up to speed on a bloomberg scoop after this. ♪ amanda: welcome back to bloomberg markets. it appears opec and its allies may be inching toward a compromise on production cuts, notably that the group could come to terms with the deal that would see existing cuts extended by another month. this may be setting a bit of a floor under the price of oil. we had been watching prices across the board firming up a bit in the last couple of weeks. will kennedy is our executive oil editor. it appears there is a copper mine is at hand? will: what we are hearing from sources is russia and saudi arabia, the two most important members of the opec-plus , have set to agree that they will extend the increasing, the current curves for another month. the aim is to do short-term increments, monitor the market, and keep prices rising, look to see what happens in terms of demand as the world eases coronavirus lockdowns. amanda: one of the big fears is that members will not comply. has there been evidence of cheating on the existing cuts? will: compliance is a big issue. saudi arabia and russia have complied incredibly well with the cuts, which is why we are seeing prices rallied. i think there are countries that cause concern for saudi arabia. one of those is iraq and nigeria. we are hearing they are under pressure to comply. nigeria put out a public statement today that said that they were committed to the cuts. it is clear the leaders of the coalition want to see full compliance, if they are going to carry on with the policy, and try to manage the market this way. amanda: obviously a massive reaction in the u.s. shale energy space because of what the price of oil has done. in a roundabout way, did saudi arabia get what they wanted? the pandemic may have finished it, but did it achieve the reduction cuts that they were looking for in the u.s.? will: that is an open question. there have been production cuts but the question is how long they last. some oil is coming back into the markets. some wells which were closed down are returning. we have seen production cuts in north dakota, another important oil-producing state. but those are short-term effects. you have about shale, to keep drilling new wells to keep it going because they deplete so fast. what we really need to see is rigs back at work before we can be confident shale response. i think we can probably expect to see pressure for some time to come. amanda: great to have your thoughts, will kennedy. our bloomberg executive energy editor. a quick check on the markets. energy is one of the group trading markets higher. the energy subgroup in the s&p 500 and in toronto giving a bit of strength in otherwise weakness from big tex today weighing on the overall scene. from toronto, this is bloomberg. ♪ [ sigh ] not gonna happen. that's it. i'm calling kohler about their walk-in bath. my name is ken. how may i help you? 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[ finger snaps ] hmm. the kohler walk-in bath features an extra-wide opening and a low step-in 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 walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind. ask about saving up to $1500 on your installation. >> this is bloomberg markets the close. it is martial law. president trump threatens to deploy the u.s. military to quell the unrest as the protests continue. the majority of u.s. stocks, rising amid new hopes of a stimulus. the dollar, following a fourth day. opec plus compromise. all that and so much more coming up. >> energy and materials are leading the charge here. that is generally a sign that folks are banking on a little bit more of an economic recovery here. we saw the

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