We were talking about it with some of the smaller and midcap names. We saw some of the cruise line stocks, the casinos. The restaurants were on fire. Cracker barrel up 9 , 10 . Dont you like that . Caroline i have not been to a cracker barrel. Romaine exit through the gift store. Taylor this really all comes back to the data that we got this morning. June Industrial Production and july early numbers out of manufacturing all betterthanexpected. Are hearing from dances of the of Richard Bernstein advisors. Thank you for being with us. You take a look at the positive economic numbers. The big outperformance in the russell 2000 today. You said you were a little overweight on u. S. Versus the rest of the world. How do you think about that Going Forward . Smallcap producers getting a big win . Dan i think modest overweight on the u. S. Still makes sense, but i think moving that angry mental dollar outside the u. S. Makes more sense. Clear thatis very the data is Getting Better in the u. S. , but i think that what is going to be critical is to see the way that stimulus takes form. The way i characterize this recovery, weve gone from a 100 economy to a 0 economy. I think if we are lucky, we will get to 80 , 90 by the end of the year, but that is still lacking any further stimulus, theres a lot of businesses about to go under, a lot of people to get laid off, and a lot of delinquency and bankruptcy to come. You said theres so much lack of clarity when you are trying to see where this market goes next. How are you hedging . Hedging ork that diversifying is critical at this stage. Some highess you have confidence in how the future is going to shape out, this doesnt make a lot of sense. We are starting to see targeted risk on both sides of the portfolio. Exposuregetting through areas like transports, energy, materials, is a good way to play the recovery. But theres a lot of uncertainty in the way that recovery is going to play out. Lesscing that out with economically sensitive sectors is going to help balance out that. And just from a quality perspective, it makes sense to have a quality overlay in the portfolio. Even if this recovery is going to be sustained. Caroline in the middle of all that we are going through here, we are also four months away from the u. S. President ial election. How much stock do you put, no pun intended, how much concern do you have about any outcome of that election . Do you make any changes to your portfolio, or do you just sort of ride this out and assume that no matter the administration, 2020 one, equity markets will find a path forward . Dan it is no doubt that as we approach the election, you are going to see volatility pickup. I think that is very clear. Especially this election. But we are not the type of firm that is going to create the anticipation for that type of event. We are going to be more focused on the fundamentals. Seen the likelihood of a democratic sweep picking up and that is getting priced into the markets. Way youink that either will probably still see volatility pickup. People are going to start to price in tax increases. One of the things that is missed by the consensus, there will probably be tax increases over the next several years regardless of who wins the election. If that continues, then youre are going to see the Trump Campaign get more vocal on the issues that have been popular with his base. In particular, more escalation of trade tensions with china. Either way, i think volatility should pick up. Suzuki, we always love having you on. Dan suzuki of Richard Bernstein here, the deputy cio there. That does it for the closing bell. Whatd you miss . Is up next. We will be speaking with dr. Wayne frederick on reopening Higher Education. Toptier athletes looking at hbcus and the black lives matter movement. From new york, this is bloomberg. Taylor from bloomberg World Headquarters in new york, im taylor riggs. Romaine im romaine bostick. Caroline and im caroline hyde. This is whatd you miss . We see fiveweek highs for the s p 500. The all country world index led higher by the u. S. Risk on mood as we focus on hopes for a vaccine. And it was almost indecent. Goldman sachs reports the best trading results in years. Will it spark a backlash . And what of Morgan Stanley and bank of America Numbers . We get more details, next. And a big win for apple. The tech giant won its court fight over a tax bill. Ep fromk with a key m the Vice President of renew europe. Romaine big news on virgin galactic, Richard BransonsSpace Company naming a new ceo. He had been the Disney Parks International head for a while. They are also naming a chief space officer, george whiteside, who had formerly been at nasa. Virgin galactic also saying it is preparing for commercial services and progressing through its test flight program. A lot going on today. We had Bank Earnings today. We are going to have more Bank Earnings tomorrow, right . Taylor we are. So interesting when you look at the underlying fundamentals. Lets just pull up a calendar and show you where we are this week. Where do we go from here . We heard from goldman, jp morgan, and other banks. Crushing,nue is particularly in the equity business. Those traders really holding their own. Bank of america and Morgan Stanley, further updates on that trading revenue and health of the economy. Good news today from goldman. I want to hear what some of these Bank Executives had said so far. Take a listen. The consequences remain unclear. We cannot forecast a future we dont know. We are in a completely unpredictable environment. You are going to have a murky economic environment Going Forward. We are navigating an uncertain economic backdrop brought on by a Global Health crisis. The pandemic has a grip on the economy and it doesnt seem likely to loosen until vaccines are widely available. We expect the impact of covid to continually impact our earnings until we see meaningful improvements in unemployment and gdp. Taylor for more i want to bring in the president and Portfolio Manager of sneed capital management. As you look at Bank Earnings so far, is the big standout the Massive Gains in trading revenue, and are you worried that may not be sustainable . Revenue with all volatility we have seen is kind of the marquis. What they just laid out seems very dour. The fact that they dont know what their profitability is going to be, until this dissipates, is all the uncertainty they are communicating. As a bank stock investor, you have to buy Financial Institutions when you cant say good words. Go back to 20082009. There wasnt anything good to say at the bottom. You wake up at junctures like these where theyve made good money and we are in a situation where the banks are cheap again. The Economic Situation looks murky. It looks like a great time in the u. S. Economy with households. The biggest businesses are the ones that had the biggest trouble. Businesses were not ready for this pullback. Households have really been in the drivers seat from a historical perspective. Caroline is it time to get into the banks because they are so cheap or is it that they might start to fundamentally outperform despite the concerns about bankruptcy and the loans they are putting aside . Cole go back to what they said about their earnings being lower. Lets just kind of close our eyes and envision a world where you dont have to be a genius to think theres a vaccine in three years. What are the earnings going to be then . Probably higher on the margin. What will the multiples be when people figure that out . As an investor, it is amazing. At the same time, trying to figure out when that takes place, that is a terrible way to be an investor. Know when no one is optimistic and no one wants to pay high multiples. The multiples are 20082009esque and we dont have a credit crisis. It is just completely different. Is this a nearterm problem . Yes. They are better capitalized than they have ever been. Wells fargo cut their dividend. If i was wells fargo, i wouldnt pay a dividend. Lets just buy back stock. The fed would be friendly to that, much like bank of america couldnt pay a higher dividend back in 2012 and 2013. These are ideal prices for the buyers of stock. Romaine great point and obviously great dressing there. Glad to see you are wearing the summer seersucker. But in all seriousness, when you move away from the more diversified banks to some of the Financial Companies that are much more about consumer spending, synchrony and some of those names, do you have as much confidence in those names given that they dont have trading to fall back on and other departments . Cole it is a great question. Ill use wells fargo. They reported debit Card Transactions were flat and credit Card Transactions were down 20 . Lets use a bank like american express, Consumer Credit oriented, less about trading and commercial banking. Business going to be impacted . Sure. Expressand american case, they collect membership fees for their credit cards. They have offsetting lines of income that other Banking Institutions dont have. Visa and mastercard banks dont collect those fees. The pain of this is going to get handed out differently. Lets take one step further. What could fall in the place of the banks that is a benefit that isnt being talked about heavily outside of some stocks, the mortgage banking side. Housing is scarce. Housing is booming. Context,a historical that could be a big driver in Bank Earnings. That may not be in the cities we see now. California is tough to develop. Certain cities just have cheap dirt. These banks are going to look different. Wells is going to shut locations. Mortgage banking could be bigger. If you are a credit card company, the personal Savings Rates of american households now argue that you are not going to have that much trouble. 20082009, it was terrible Savings Rates. Only time got us out of that problem. This is nowhere near the gravity of what we dealt with then. Caroline thanks so much for joining us. Inhave some breaking news terms of earnings. Coming out with its secondquarter adjusted loss per share, off two cents. It reported a preliminary eight cents. Secondquarter sales were down 23 year on year. Than 50 year on year, but the market likes it. We are up almost 5 . Romaine in the world of government and politics, Supreme CourtJustice Ruth Bader ginsburg has left the hospital. She has been discharged and is apparently doing well at home. Ruth bader ginsburg, the oldest justice on the u. S. Supreme court, back at home, doing well. And a programming note, for more on the banks, dont miss bloombergs conversation with Morgan Stanleys ceo. From new york, this is bloomberg. Romaine all right, a court fight over 15 billion u. S. Dollars in taxes. Apple winning a big victory in europe, the e. U. Reversing a decision that would have forced apple to pay a record 13 billion euro irish tax bill, a blow to the european antitrust chief, who has been trying to crackdown on preferential fiscal deals for companies. Joining us now is a member of the european parliament, joining us now. Thank you for being here today. This is obviously raising a lot of issues. Not only so much for what apple but reallynot owe, about the taxation systems we have around the world and the lack of unification that allows these companies to sign preferential ways to plot their taxes and finances. Do you see any path forward given this ruling that you can still recoup some of that money . No. It is indeed an extremely damaging ruling for europe. We have a few countries, mostly smaller countries, that basically have this model, helping companies evade their Tax Obligations in other countries. Europe has been trying to harmonize them. That has been impossible. Agreemento impose an by the end of the year, but the u. S. Has stopped this agreement. They said it wont work. And finally, the competition commissioner has been trying to do a competition law, by saying this is not allowed because it makes the Single Market not a level playing field. And theres really very little that European Countries can do to try to level the playing field. Idea of using general market rules, but that is going to be a long shot. Caroline a long shot and in many ways the firing back from the court was that this didnt give enough legal precedent or ramification around all of this. You say that really this is denting competition. Do you think you will be able to show that . That it is indeed hurting competition . Apple just claims, you are punishing us for tax planning. The truth of the matter is, tax ratethe effective that apple was paying was 0. 005 of their profits. Argue that that is providing a level playing field. So, yes, i do honestly believe this is harming competition in the Single Market. Let me just give you one other example, just for your audience. Paid a in spain in 2018 total of 3000 in Corporate Taxes. That is probably less than the revenue they make in an apartment block in madrid. Taylor can you comment on how this sets up ireland versus the rest of the e. U. . There was some frustration. How does this set up the dynamic with members of the e. U. . I think that competing on taxes to some extent is healthy. Im happy that that could happen. You oneme give particular situation. Where u. S. , you pay taxes your legal headquarters is. In ireland, you pay taxes according to where your effective management is, the u. S. A company in ireland with these rules wouldnt pay taxes in the u. S. And wouldnt pay taxes in ireland. This is really eroding the basis of the competition. Romaine vigorously you are working with and the general push shes made has caught a lot of attention. Theres some people who would say some of the things shes pushing for would be better left to the oecd or more international or global bodies. What is your response to that . Theres a lot of desperation in my response. I would love the we cd to do this harmonization of the Corporate Tax basis. Truth of the matter is, this is just going nowhere. We were supposed to finish in the q4 of this year. There should be some other ways to come together on this, but the truth is, we are really out of bullets. Caroline very quickly, just one minute, the courts ruling on the privacy case involving facebook tomorrow. How do you think this will determine data transfer, and do you worry that america will feel it is unfairly targeted by europe . Sense thatclearly a all of that is being an aggressive move against the u. S. But i think that both europe and the u. S. Are losing from this tax planning. There is something for everybody to gain. So i would hope that the u. S. Was on the same side. Caroline great to have some time with you today. We appreciate it. Universityhoward taps the bond markets. We will discuss the move and why many historically black colleges continue to lose out. The bond market, but social unrest and bringing students back to university. This is bloomberg. Romaine Howard University in the u. S. Became the first historically black college to join the borrowing that swept the u. S. Market. The schools received four times as many orders as were available, indicating demand for hbc you to tap the market as a National Conversation about equality continues. Joining us is the president of Howard University, dr. Wayne frederick. Want to start off talking about the bond sale. It drew attention not only from investors but from a lot of observers and it raised the question about the ability of hbc you to raise money through Financial Markets and to top more of the cash cushion given some of the uncertainty with regards to Higher Education when everyone is going to be coming back to school. Why do you think Howard University was able to draw so much interest from investors for this particular bond sale . Dr. Frederick a couple of things. I think because we were doing a refinancing, people had a chance to see us perform over time in terms i think also, our recent results including our ability to raise philanthropic funds as well as our Operational Performance as we have launched a strategic plan. From a grand awareness point of view, we have set the bar making sure [indiscernible] the fact that we send more africanamericans to medical school as an example is just one of the calling cards i think people see. I am happy. We certainly think the other fundamentals of what people want to see in the market in terms of good management, seeing a way forward and what we are doing strategically, i think are all fundamental things that are necessary in spite of anything else people maybe looking at. Caroline i am interested in how the finances are going in terms of Howard University and that and at this moment where we have heard you talk about a generous grant from bank of america to help and free covid testing. How has this sudden are you seeing more interest . Talk about the ceo of netflix target money toward historic black u