Conferences canceling the season, and what that could mean for the betting world. I know you are a big ambler. Gambler. Ann if im gambling, im gambling on robinhood. Im not going to give away any of my freebies. I was just looking, as you were talking about the market you mentioned small caps were one of the big up performers. 5 ord small caps are off 6 yeartodate. The s p is up 3 , 4 , 5 . Value is down 12 . It is up 18 yeartodate. These are yesterdays numbers. I have not calculated the numbers today. You are starting to see some of that divergence again, not only in the companies, but in the value and growth rotation we continue to talk about. Romaine lets bring back ann over at wells fargo asset management. When we talk about the market, a lot of people look to the feds support, not only in terms of some of these special policies it hasnt amended because of the pandemic, but also the rate cuts , which has kept the nominal rate low. And that real yield well below zero. About 100 basis points on that 10 year real yield. Enough forupportive the economy, for the market right now . Ann i think they are right now. Certainly, though, when all the money that has been poured into the market, over 40 trillion, 45 trillion that has been a real stimulus. When there is that much buying in the market by the government, that is real dollars, and that has helped a lot. There certainly has been interest by Retail Investors as dontut the old adage, fight the fed, holds water in this case. On that note, if you are looking at active equities, who to buy, who to not buy, how are you thinking about levels of debt and the health of the Balance Sheet, with yields of zero . You have tons of issuers selling debt because it is free and cheap. How does that affect how you are looking at a lot of companies you are investing in with shaky, or not, Balance Sheets . Ann it is a really good question. Our managers are highly focused on building resilient portfolios. They are not traders. Their focus is on High Quality Companies with really strong Balance Sheets. I think despite all of the capital, spite low rates, we are going to see an increased focus on bankruptcies, and there will be quite a few of them that we will see over the next 12 to 18 months. Investors need to be cautious about those things. And so although it is great to names the market a lot of rally and have big, big rallies, and investors can get tempted to go to those places, it could switch quickly. And we are all seeing it, when you have shutdowns occur or pauses occur, because the virus controls a lot of activity. And so although schools may start, the nfl season may start, College Football may start, we dont know how quickly those things will get paused. I think we all have to be a little cautious about those things, and certainly our managers expect bankruptcies will be more prominent in the future. Bankruptcies, more nervousness, and probably more volatility. How do you do that . Ann they stay focused on quality companies. They stay focused on making sure they have their portfolios very diversified, in a lot of different sectors. On their they focus investment processes and staying true to those investment processes, which can lead to outperformance over a long cycle. Great to get your focus. That does it for the closing bell. We will look at potential investors for tiktok. And also, breaking news. Caroline from bloomberg World Headquarters in new york, im caroline hyde. Romaine this is what you missed. ,aroline i rally in blue chips but not in tech stocks. The nasdaq down. He s p 500 edging ever higher stimulus at a standstill. Roundations for another of virus relief breaking down. President trump chooses to go it alone, but does he have the authority . And buying tiktok. App ine lucrative question, more companies than microsoft see potential, but is it better to invest or to buy outright . All that and more coming up. Taylor we have to talk about a stimulus or a lack of a stimulus deal and what that is doing to Business Conditions in terms of the uncertainty it is providing. Take a look at this chart. You see the indexes for all of this stuff. The blue is the Monetary Policy uncertainty index. That is relatively low as we get guidance from the Federal Reserve. Lack oftration over the compromise on the physical side of things means that in the white line, well, it still remains pretty high. I will bring in our Harvard KennedySchool Center for fitness and government senior fellow, megan green. When we talk about the lack of compromise on a stimulus bill, what you need to see to make sure state and local governments have enough money to whether the pandemic . Weather the pandemic . Megan we need money from the rogue government. This seems to be the biggest block to finding a deal between the democrats and the republicans. But beyond that, we also need to see a few other things, like reversing the cash cliff that many people went over at the end of the month, with the end of Unemployment Benefits and enhancements, eviction protections, things like that. And also, i think we should see more support for small and mediumsized physicist. The ppp loan program was slow getting off the ground. They extended the time that firms had to use the money, but they did not increase the amount they first had. Firms that already allocated their budgets, brought people back on the payroll, they have used up that money. I think we are going to start seeing more people laid off. The august jobs report might look pretty bad. And all this happening at a time when Unemployment Insurance benefit enhancements have also stopped. I need to see a lot here, but think a big piece is federal money for state and local governments, which the democrats have been pushing for and the republicans have really vetoed. Interestedegan, im in your global perspective on how the u. S. Is tackling supporting the continuation of small to mediumsized enterprises, wanting businesses to keep on employees. Europe has done it. The u. K. Has done it. Is this the right way of trying to support the economy at the moment, ensuring the unemployed get the money necessary, 400, however it might fall . The u. K. Has basically kept people in positions of work. Megan it depends on a lot. And minuses tos each approach. As you say, the u. S. Has not really tried to keep unemployment low. The focus has been on supporting those who are unemployed. In europe, there has been an attempt to keep a connection between workers and employers. I think given the jobs that were lost initially, these kind of Hourly Service jobs that are high turnover jobs anyhow, the u. S. Approach was not a bad one. But given how flexible the u. S. Labor market was, i think the u. S. Approach of supporting those who were unemployed is ok as well. For europe, i think it does make more sense for them to try to connect workers and employers, because they have much more rigid labor markets, so once you lose your job, you tend to be out of a job for much longer in europe than in the u. S. The european approach gets much more expensive. Europeans have come together on a fiscal package in a pretty big way. It is a politically significant deal, the e. U. Recovery fund. Economically, it is probably not big enough. It is not a hamiltonian moment. It has been a big show of solidarity, and so it is really rare for me to be bullish on europe ever, but the europeans have gotten their act together in a way the u. S. Is clearly showing it cannot. Romaine in the u. S. , the trend line this has been going on for a while. Where we stand today with the labor market, a lot of the conditions, the underlying factor has been unfolding for a few decades. Im wondering if you see in your research, in your observations, any sense that that could change in any meaningful way, meaning that trendline could be broken and that u. S. Policy toward labor would somehow move in a slightly different direction. Megan i think there is an opportunity here. You rightly point out that income inequality has been in the u. S. For decades now. A big part is the decrease in worker power. Part of that is people no longer being members of unions. The Union Membership has fallen significantly, and those who are unionized tend to earn a lot more than those who are not. So that is one way to try to address this. Another way is to kind of inerse a decadelong trend increased market concentration. A few star firms emerge. It means if you are a worker in the industry, you do not have that many possible employers, so you cannot negotiate higher wages. You sort of have to take what you can get. That has held wages down as well. Trying to encourage unionization, penalizing companies for all of the tactics they have for trying to undermine unions, having increased anticompetition authority, that could help with market concentration. These are all things that could help workers, and this is an opportunity. In crises, you often have bold moves. This is an opportunity to do that. I think a lot will come down to the elections. The Biden Campaign does have a lot of this kind of stuff in their memos. It is possible that it could happen. And i think it is absolutely necessary. Income inequality was a huge problem already in the u. S. , before this crisis, but it has been exacerbated massively by this crisis. Taylor on that theme, you were talking about lack of unionization. We are getting headlines at the top of the hour than it is a preliminary injunction. California has gone against uber reporting independent contractors as fulltime employees. Talking about your knowledge of what it means to be an independent contractor, the lack of benefits, the lack of wage pressure we have continued to see, how do you see some of the gig economy, the gig workers, moving forward, if this were to become a bigger issue, a lack of independent contractors, and a push for fulltime employees with guaranteed and . Guaranteed benefits . Megan that could help, and something that underlies worker power is misclassification of people who should really be fulltime employees, that are hired and brought in as independent contractors. We know there is an amazing benefitsoking at the that someone in kodak have gotten decades ago, versus someone working at apple or google now. The difference is huge. If we could try to trap crackdown on that misclassification and try to bring the gig economy into the regular workforce, that would improve worker power in many ways. Hopefully, we can make steps toward that, but it is not clear that we will. There is some of this in bidens documents, so those are on the table. Hopefully, we can take the opportunity of a massive crisis to make some of these really bold steps, because they have been necessary for decades. Romaine great advice as always. That is megan greene, senior fellow at the Harvard Kennedys will center for business and government. The initial pockets of activity are probably going to be in those industries which are relatively unaffected, as compared to some of the ones that have been affected terribly. I think you look at things like financial services, you look at technology, things like health care, and i think thats the place where you would expect to see the first pockets of activity, because they are a little bit less worried that we have not hit bottom and are in a recovery. You mentioned in the last crisis you had this universal aspect of all sectors going down together, all sectors, as relates to m a, emerging together. Is it difficult this time . The mechanism for commerce, the credit markets have not broken down. Companies have seen that is still functioning. When you look back at 2008, 2009, it was stable and across all industries it took a return of the liquidity. It took a return of the debt market. And that was a slow and steady return. If you look at the numbers coming out of there, there was a steady return. We went back to 50 , back to 70 , back to 90 . Because you do not have those, i think what it is going to be focused on is the impact on the industry of this particular crisis. You are going to see industries that are probably going to be back at the same levels of activity fairly quickly. You look at the travel industry, the hospitality industry, the energy industry, where i think it is going to take a lot longer because it is not a question of is that available. What is the rationale for transacting in those industries . What you were going to see probably when you look at the numbers, recovery might be the same, but the recovery is going to be more industry pocketed as opposed to smooth across the whole m a market. Policy is going to be a huge aspect of any decision any Company Makes going into the last owner of the year, particularly around m a, and i suppose particularly a crossborder deal. How are your clients thinking about the risks of whether it is the election, different outcomes there, or the ongoing situation between the u. S. And china, and the tensions that is creating . Clearly, with crossborder is being dampened by the unpredictability of the Foreign Policy of the United States right now. I think that it is going to take a while before people feel confident that jumping back into some of the geographic markets the chinau. S. Steel deals , until there is a sea change in the attitudes between the countries, it is hard to see that coming back. I think you are right. It is always dangerous to try to predict the impact of an election on m a, and the impact on policy, that there are certain things people are talking about that are probably inescapable. One is, it is clear the progressive wing of the Democratic Party is antimerger and antibig. It has been stated publicly. When you look at what is going on at the ftc, a number of deals cleared the ftc recently on 32 votes with pretty scathing dissents from the democrat commissioners. Oaks are thinking in a biden administration, if you have democratic control of the ftc and the doj, there might be scrutiny attached to deals as a result of that attitude toward mergers. That might impact the ability to do some of the strategic deals that have cleared today. I think the other big piece is tax policy. Biden has been very clear that he is looking at raising the Corporate Tax rate. And its clear that looking to raise the individual tax rate, including the longterm Capital Gains somewhat counterintuitively, i think that might be a catalyst for m a activity in the near term, because folks are looking at might trypossibility, to get deals done before the tax policy changes. So the threat of tax changes has people doing deals sooner rather than later. Longterm, it is probably a negative, but in the near term, it could have people jumping in and trying to get things done. Wolf, that was daniel speaking with our own ed earlier. A developing story and what looks to be a big loss for the gig economy. Uber and lyft were ordered to convert their california drivers from independent contractors to employees with benefits. For more now, we are joined by bloomberg reporter eric newcomer. Preliminary a injunction, but what do we know about this ruling . Eric this is a big move against uber in its homes. Home state. California legislators passed Assembly Bill five, which clearly has a goal of making and lyft drivers employees. That went to the courts and hoover has been fighting it out. Now we have San Francisco superior court saying they look like employees. Like everything in this world, that could be appealed, and certainly uber will do so. They have i think 10 days to try to push that out, and see if they can get an appeal going. Uber a big strike against drivers being independent contractors in california. Romaine eric, assuming the Companies Lose their appeal and this effectively becomes the law or the rule in that state, is there a Business Model here financially where they can operate and be profitable while keeping these drivers on as employees rather than contractors . Thats ah, multibilliondollar question, i think. It is complicated. One, i think technically there will be a question of whether uber wants to show that it can make it work, because it would open the door to a lot of other places. California is so important to the company, you would have to sort of imagine they would try. Uberr has long argued has long argued that the stack the status of his workers allows drivers to jump on and off the platform. It will be a pretty drastic change. I think part of the problem is that uber has fulltime drivers who work with bonuses and certain incentives, but really do seem a lot like employees, with people who are more likely to bounce on and off the platform and supplement other income. I think a big question would be whether uber could really still maintain those two different pools of labor, or whether they would need to really focus on waste morerivers and money when there is idle downtime, or make it harder to get a ride in nonpeak periods. Caroline how farreaching is this . I think of the gig economy back in the u. K. The argument is that workers want this flexibility, want to be able to come in and out and work when they want to, and dont want the benefits. Thats the argument. But this hit deliveroo, hit instacart. Many gig economies companies are based on these modes of working. How farreaching could this be . Eric this is going to when uber went public, this was a major risk factor for them. The independent contractor fight is a global challenge. The legal and regulatory system has moved slowly. Thean, some of president setting cases for this issue are from sort of old guard companies. The government has just been figuring it out. If california moves against uber, makes them employees, and the world does not collapse, i think a lot of nations, cities, states, everybody will say, ok, we should do that. Definitely, there is a domino effect here. I think people will be very interested to see with california, which has been watching this longer than everybody else. Caroline we have to leave it there. Be safe. We are expecting to see moves coming through at the start of trade. How long will it last, is the perennial russian. Question. Romaine growing tensions between u. S. And china, plus the lack of stimulus deal