John, to me the silence of this friday is the unemployment checks that will go away and the silence from washington. Jonathan i hope they are not looking at the equity market this morning. I hope they are focused on the highfrequency data and jobless claims. The recovery that we have been doing a victory lap on over the last couple of months. There will not be one this time around. Jobless claims are higher. Recovery is stalling. The economy needs more assistance. And congress is going for a long weekend. Tom so many things this morning and we will have a lot of different conversations to get you ready for the weekend. Lisa abramowicz, we all know in equities and commodities and currency, the bond market talks. It is speaking with a vengeance this morning. Lisa you are earning nothing on safe bonds. That is what this is telling you. Inflation will not take off. We are seeing record low yields. Almost back to its record low. I think you pointed to the most important yield we are looking at today and that is the yield 1 ,e 10 year and that is a record low. You are losing money on inflationadjusted terms. Tom this is important. This brings us to the important property. The real yield, look for that this afternoon as the news flow continues. With that is the important reality of negative Interest Rates. To me, that is a major question in august. Jonathan negative real rates are here. We have talked about that. Maybe after two years, maybe longer. I will say this. You can have a situation, and we have seen it across europe, where bond yields trade below the policy rates. There is no reason that cannot happen in the u. S. We can get negative nominal yields in the u. S. We may see it again. Tom we have the bonds right now. We were lower earlier but still. 113 percent on a two year yield to start the hour. Futures up 11. Dow futures of 82. The vix 28. 90. It will be fascinating to see how it adapts to this juggernaut. Without in mind, we speak with Jonathan Golub who writes detailed reports on the state of the market and his state has been a state of optimism. What is the tech afternoon of yesterday, what does it signal for america . Jonathan what does it signal for america . I am not sure it represents the whole economy. When you are investing in the stock market, you are investing in a basket of 500 stocks. What it says is the companies in the Public Markets that you invested in and the mutual funds in your brokerage account, they are in strong shape, even though the economic backdrop is more troubling. Tom we have a lot of smart people saying sell the tech, move here, hold the tech, move here. Can you make a case that you acquire more shares of these juggernauts . Jonathan absolutely. I dont think it is because they delivered great earnings yesterday. If you look at the top five companies, we have four of the top five reported. They returned 49 in the last 12 months. The rest of the market delivered zero. These companies have no debt on their Balance Sheet and they are sitting with cash. They are less volatile than the rest of the market. In the last 12 months they have grown their revenues Something Like 10 times faster than the rest of the market. The pe of these companies relative to the growth rate is half of what it is on the market. They are trading at a premium stock market multiple. They are more expensive, but they are delivering faster growth that the pe relative to the growth rate is 50 of the rest of the market. I think the surprise is going to be that these five or seven or however Many Companies leading the market are going to the gap between them and Everything Else will continue to widen. Jonathan you have done some hasendous research and it me personally compare and contrast the top five now to the top five in 2000. Of them all five architect today. You have Companies Like exxonmobil and others at the peak in march of 2000. The Companies Back in were much faster im sorry, much more expensive than they are today. They were less healthy companies. Were Earnings Growth rates not so superior compared to the rest of the market the way these companies are today. The profile of these companies is much stronger. If i were to say to you that 22 of the market is growing this fast and has these margins and does not have any debt and would you rather be in that, you would say yes. And then i would say it is only five companies. People say that is risky. It is only five names. That is not the key point. It is how healthy the businesses are. Jonathan how does it get better is the question people will be asking rather than the situation we face in q2. The situation, quotation on, off, a conversation we have repeatedly. Is rotation off again . Jonathan g no. I think the real question is, and i know that you guys have been addressing this, is the story that has a really concerned. The fallen Interest Rates is the market saying, we dont think there would be any Economic Growth over the decade. We are going to get a bounce off the bottom. I know it is slowing down and stalling out. The question is where is the impact of this over the long run and all of the debt we are accumulating, and it is going to be slower. Iss weakening of this bounce really problematic for Industrial Companies and Mining Companies and retailers and banks. And so you have a chunk of the market, maybe one third of the market that is really susceptible to some of the economic problems we are having. And then you have probably about 70 of the market, not just five names, but 70 of the market that appears to be healthy. If you look at healthcare names and Consumer Staples names. So you have this real bifurcations not only between the five, but those that are exposed to these economic woes and Everything Else which seems good. Lisa when you talk about the 70 , they benefit dramatically from the lower Interest Rates meaning they can borrow money at record low costs. How much do you expect that trend of buying money of buyback shares to shift the capital structure into cheap debt . How much do you expect that to continue, the privatization of the biggest and strong as companies . Jonathan g i dont think that is the way that things play out. I think what happens is these companies are generating a boatload of cash flow from their businesses and that is what they are returning. When you talk about the amount that they are buying back and the map the amount they paid out in dividends, it is the fact that they are generating or capitol then they need to run their businesses more capitol and so they spew it back out to shareholders. I think that is the big story. I want you to fold in your equity call with the stunning caution i just heard from your colleague. I have known him for ages. He is a brilliant economist. I was thunderstruck earlier this week over his cautious view forward. Full that into your optimism on Holding Equity shares fold that into your optimism. Jonathan g i think his call is smack on. We have to separate out what is going on in a number of Public Companies that have a certain profile and was going on in employment market and the economic data. It is clear especially as we move into september and october that we are going to see some of these brilliant numbers economically. Ism is bouncing, it will probably bounce toward 60 and it will roll back down. We are sorting to see this with employment numbers that have stopped improving starting to see this with employment numbers. It is the reason we are seeing Interest Rates slipped the way that they are. I think investors have to separate out when they think about equities and the economy. They are married to each other or they are cousins. But they are not the same thing. I think his call is right which is why i would not be putting money in industrial stocks and i would not be calling for some kind of rotation out. Onathan Jonathan Golub do you hear that, tom . The sound of two people working together. Isnt that nice . We get to the point where we talk about each other and we say we love each other. Lisa i think they do love each other. Jonathan i was lost for words yesterday when i read the apple release. This was at the top of it. Can you imagine having to write this . Revenues up. At the top of the release in a quarter where half the plant was shut down . Tom this is really important. We talk to people to get it right and get it wrong. We are never negative on the people in the tough business of get it wrong. Ipad and mac sales were stunning. Jonathan is this a call for Luxury Goods Companies to get a massive boost . Tom you are dead on. The stimulus i will go with that. It has become a requirement of society to move yourself and your kids forward. That is what it comes down to. Jonathan we will continue the conversation. For the record, we do love shelley. An apple analyst will be joining us we do love each other. We advanced about 10 points. From new york in the bond market, a lot of talk about the yields lower. 0. 53 . We are down two basis points there. Deeply negative yield. On the fx market, 119 on the eurodollar. We settled down around 11850. In equity futures, you have to compare what we are doing on the nasdaq with the s p 500. The nasdaq is flying. Is it to futures up one third of 1 . This is bloomberg. Republicans want to go on the record and say they have tried to restore supplemental jobless benefits for millions of americans. Mitch mcconnell is trying to force a debate on a stopgap measure for the six and a dollar week checks. Democrats want the jobless benefits extended but only part of a larger relief package. The president coming under pressure to set a National Strategy for the coronavirus. The white house has avoided strict rules. The plan has left many at the decision to industry or state leaders. Experts say that has made shortages of protective gear at hospitals worst and could complicate distribution on vaccines. It is official. The euro economy plunged into an unprecedented slump in the Second Quarter due to the coronavirus lockdown. It may take years to fully recover. 812. 1 o area scoring contractions, the biggest heat shrinking 18. 5 the biggest hit. Boris johnson is delaying measures aimed at easing the lockdown because the number of new cases is rising for the First Time Since may. The British Government is allowing places like casinos, skating rings and bowling alleys to reopen. The new measures will be reviewed after two weeks. Biggest deal ever in the semiconductor industry. Bloomberg has learned that they are in talks to acquire a chip designer owned by a stock bhangra. They will reach a group reach a deal in the next few weeks. News 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. This is bloomberg. About shortterm problems becoming longerterm problems. What we saw today was two things. The shortterm problems were big. That is what the quarter one gdp number told you. The second problem was the jobless claims data and that we are not dealing with a shortterm problem. Jonathan the chief Economic Advisor to allie aunts. The spread between the im coming data, jobless claims and tech earnings, absolutely huge. The economic data. From new york city, good morning. One hour and 12 minutes away from the opening bell. Futures underperforming on the s p and outperforming on the nasdaq. Futures up 11 . The euro data the eurodollar unchanged on the day. The marketis speeding speaking to that data and the equity market speaking to those earnings from big tech . Tom the two year yield back under one point. An extraordinary statistic as we dive into august. I want you to bring on our next guest. I think there is some great insight here. Avenuending on fifth with one of the great giants of early apple analysis, Lawrence Haverty and everyone around us was talking about the death of apple. Larry haverty stood next to me and he said, tom, it is baloney. Larry haverty was right 10 years ago. Jonathan that might have been the second time we have done that. I think we have done it five times. We are lucky to have Amit Daryanani with us right now. Sell 26rth do you billion worth of iphones with world shut down . Amit that is a great question. I think it is a combination of having the right product launch. Apple management talked about of thehe benefits ecosystem for them. I think it is a combination of those two. Wehaps through covid where have all been fixated on how data centers are the new narrative, perhaps apple and its ecosystem has gone up from a consumer standpoint. Jonathan lets be clear about this. Is it a consumer staple that you have to have a look through this company with the stimulus in the last few months. . Jonathan g it is definite luxuryt is definitely a based product. There is a luxury element to this. Time, it is ame staple for individuals that work every day and the stats apple has. I thought it was fairly impressive which was 50 of the macs and ipads were sold to firsttime buyers ever. Lisa it highlights the importance of the hardware aspect of apple even though a lot of people were saying heading into this year this had to become more of a services company. They have to get more revenue from their itunes and other services. That was in line with expectations. It did not have the massive beats of the other hardware focused aspect. What do you take away from that Going Forward . Out, servicesoint was up 15 . Not a terrible number, not the way it has been growing in the past. I think the reality with services is it is a massive business. Perhapsy saw was advertising business, licensing business which is actually through google and the applecare business, those products and services were declining or did not grow as fast. The flipside was things like apple music and app store did better. It was a bit of a tale of two cities. If you step back, it validates at point that the diversity scale and even if you dont see services of iphone as great, you have things like the apple watch doing better. Tom i have been looking for them to entry point on apple for several years. I am still searching. [laughter] i want you to tell me the cash on cash january 1 return on apple. This was 10 Dividend Growth and also with that massive persistent Share Buyback program. Am i locked in for an 8 return on day one . Alone, athe buybacks least for the next four years, it will give about it 6 return. The dividend yield, the stock has improved about a fair amount. About 1 today. It is in the zip code. It is about 7 that you get annually. Tom look at this, just extraordinary what was just said about a 7 return. Day one as well. Tim cook spoke about the social issues, that they are not zerosum. Anybody in economics knows what that is. Is apple adding to society or are they just stealing share from Everything Else out there that cannot compete . You know, i would imagine that they are more adding to the society versus not. If you look at the market share, it is not a large number by any means or any metric. Apple has done what others have done, perhaps make things more productive, more interactive and efficient for everyone. Thatbenefited from transition. To have thistry conversation in the last hour. Lets do it again. What is behind the stock split . Amit i think the official stance is it makes it more accessible for investors. Jonathan what is your stance . It does not create much economic value at the end of the day. It is a big of a nonevent from our perspective, from them to Economic Perspective it is a nonevent. Jonathan great to catch up with you. Fantastic to catch up. Amit daryanani of evercore isi. Tom keene, 100,000 employees at apple. Release,nted press 175,000 new jobs since march. Get your head around the growth of that company. Tom i cannot. They went out and said the percentage of that 175,000 that would become fulltime employees which i think means fully benefit employees. No, i do not have a handle on the size of jp morgan at 260,000. Certainly not the size of walmart. And this amazon juggernaut, i dont know how to handle it. Jonathan 125,000 fulltime jobs coming from the company. It is unbelievable. Lisa they have more than one million workers. They are the second biggest employer in the u. S. Behind walmart. Thank about what this means in terms of the political ramifications. How significant it will be if they do or dont raise salaries. It is compelling heading into the election season. Jonathan i dont think a stock split is going to help them on that front. Globalup, the principal investors she strategies strategist chief strategist on this market. Truly unprecedented what the Biggest Companies in america did for the Second Quarter. Good morning. Equity features up. 3 . Heard on Bloomberg Radio and seen on bloomberg tv, this is bloomberg surveillance. Hey, kids welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. 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