He boosted his ear and forecast by 24 , writing a fall in erp, adjusted risk premiums will be offset by a rise in bond yields. The combination will boost the end,o already 600 by years 3800 in 12 months time. This represents a significant increase driven by valuation. What do the technicals have to say about that . Joining me now is katie stockton, founder of fairlead strategies. Off of the highs now. What does that tell you about the next direction . Is flirting with that resistance. The level im watching is 3394, the intraday high from february. For a breakout to be decisive, we need to see a couple of closeouts above that level. Highs onct new positive shortterm momentum but also looking for momentum to falter before the end of the month. You have some overextended readings in some of , alsoternal measures sentiment. Basedrcentage of stocks on their 50day moving averages reaching levels often associated with pullbacks in the s p 500. At the same time, sentiment reaching exceedingly greedy territory. Those are earlymorning signals of a loss of shortterm momentum. Something we will be watching for. Alix lets bring up the chart. We hear a lot about how it is just a tech stocks, faang names, but the small stocks are starting to have momentum as well. Is a cumulative gauge, shows the longterm uptrend. Breadth versus the major indices, there is no divergence to speak of. Showinga bullish chart expanding participation off of the march low, which may surprise some folks. There is a difference between Market Participation and market leadership. Often folks confuse the two. You can have a market with narrow leadership but yet still strong breadth. When you take this chemo to measure, it is one for the bull camp. When you look at the percentage of stocks above their 50day moving average, that is where you are seeing potential shortterm upside exhaustion. So looking for this 80 plus a toding within the s p 500 lead to some kind of consolidation. Alix i started the program talking about u. S. Exceptionalism, to be continued. Agonarrative a few weeks would be that europe would take the lead, but that story has faltered. What are the technical saying about the u. S. Versus the rest of the world . Katie i like to look at relative strength ratios. We have seen signs of life in emerging markets relative to the u. S. But it has not carried over meaningfully to International Markets versus the u. S. Longterm trends in both cases still favor the u. S. , outperformance there. However, we are seeing signs of life in emerging markets associated with the weakness we have seen in the u. S. Dollar. The dollar looks poised for stabilization. That shift in trend has taken pause. I still think we assume it is u. S. , and we wait otherwise. Strategist, and equities technician. How do you look at the rise in yields . What do you look at as it relates to the equity market . Katie when i look at 10 year treasury yields, im looking at a technical perspective. That is valuable, especially when they make sense. They have come down to what was psychological support. You have a long over term sold condition on the monthly bar chart, and that is within the context of a multitrend down channel. They aresion is not going anywhere fast. Up intoe been lifted resistance, based on one of my models, which is right around. 76 . Meetnk we will see them the challenge here, stall, remained in this sideways to lower environment, until something meaningful shifts. Meaningful forls the 10year. Thank you for setting us up, katie. Coming up, the Democratic NationalConvention Kicks off tonight. We will hear from shell obama and bernie sanders. More on what to expect with Christopher Smart of barings. This is bloomberg. The democrats will be tougher on wall street in terms of the tax plan. You will raise corporate taxes, raise personal income taxes, and most portly for the stock market, raise the Capital Gains tax. Harris is asn and much going to be great for the country, is not going to be great for the market. That was mike nova gratz speaking last week ahead of the Democratic National convention which begins tonight. Joining us for more is Christopher Smart of barings. Always good to catch up. Is that what we are going to hear this week, that we will hear some policies that will pop the stock market bubble if abided and harris wins . Krista for i dont know that we will hear any surprises this week. This is going to be pretty much a freezedried version of prior conventions. I also think that from an investors perspective, it will be less about taxing and investing, wall street, then it will be about covid, Racial Injustice issues. From that perspective, the market will not have too much to react to over the next couple days. Alix to that point, you say it will be muted. It will not be held in the traditional sense, but part of the criticism against biden is that he does not inspire the kate the same kind of excitement that President Trump does. Will this just exacerbate that narrative . Christopher we will see how it turns out. It is an experiment for those organizing the convention, those of us watching it. We will see how Vice President biden does. We will get that sidebyside comparison because we will get the president s version next week. He is apparently speaking from the white house itself. Day to day,ves from week to week. Im not sure this is the decisive moment in the campaign for biden. Theres a lot more at play having to do with cobit, economic recovery. Alix fair enough. Nevertheless, Vice President biden has to win over some republicans, moderate republicans. How does he do that tonight when he has to cater to the younger more leftwing base . Christopher that is a problem for any party at their convention. Candidate comes in building their base for months at a time and now they have to turn to the center. Traditionally that has happened both for republicans and democrats. Has shifted to the left on biden over the years on medicare, social security, climate, so he has to harness those forces, while, as you say, reaching out to centrist voters, disaffected trump voters, to see if you can build that coalition. Alix can he . How does he actually do that this week to make it a more probiden vote versus an antitrump about . Christopher i dont think it will be just his speech, although will be taking paying attention to that. It will also be the prior speakers, shell obama, hillary clinton. Will they be leading a more Progressive Democratic party or will they try to frame this moment in a moment where democrats need to look out reach out to more centrist, moderate voters . S p used tolly, the move more in line with President Trump because he was perceived as better for the market, less regulations. We have seen a shift in that. What does that mean in terms of how an investor should be looking at these elections . Some sense, from an investor point of view, this has been an irrelevant election. Rises in the polls, the prospect of higher taxes, Capital Gains should lead to market bumps. This time around, it has been fed policy, emergence from the lockdown, fiscal policy. New,ve all been expecting large fiscal packages to come out of washington. That has not happened. A rising chance it may not happen before the end of the year. The markets are expecting, whether we get a President Trump ofpresident biden, lots Government Spending underpinning the economy. Even in a biden administration, there will be more spending. President trump is certainly not a fiscal hawk. I found interesting was the debate over the weekend with the United StatesPostal Service, and President Trump wanted to give more money to them but tying it into a stimulus package. Nancy pelosi bringing back the house to discuss the Postal Service. What is going on . Christopher that sort of surprised a lot of us. The calculus from Nancy Pelosis point of view is, the Postal Service is something that we all complain about but we all rely on and love. Beating up on the Postal Service should not be good politics for the president. I think its also a question of congress and the democrats not wanting to see the month of august with the president going into the fall campaign. Differenta lot of angles, reflections going on here. Alix do we really need to care about this . As an investor in terms of the election, will we really not know the results . That is how you can risk that hedge out. Christopher i think that is the risk. Ultimately, a nonzero risk that Election Results are delayed because the ballots are not in and counted on time. Even open upannot mailin ballots until the day after election day. If things gosue is to the courts, broader issues, so the legitimacy of the ultimate outcome, whether for trump or biden, comes into question, and that is something investors will have to watch. The dnc mobilize and do something about the Postal Service . Why cant efforts be used for mailin ballots . Christopher as we are learning when we go through this every two years, the plumbing that undergirds our election system, is really managed on a statebystate basis, dependent on local volunteers, governments. The federal government is not nearly as involved in efforts to standardize all of that to underpin that structure as much as it should be. That is something that we should look at, probably should have ,ooked at it during gorebush and since then, but i feel like this will be a further notch for us to pay closer attention to the nuts and bolts of how we cast ballots, how we are sure the ballots are legitimate. Alix no doubt, Christopher Smart, thank you. Tune into bloomberg tonight. We have special coverage of the Democratic National convention anchored by david westin. Here is one other story that caught my eye. A special survey from the Census Bureau looked at a couple of the stress is being caused by the coronavirus pandemic. Housing security. Haverd of people in states little confidence they can pay their mortgage or rent this month. Meanwhile, more than half of american households have lost income. 35 expect to lose employment income over the next month. This stands out to me for a couple of reasons. President trump is beating joe biden when it comes to the economy but can at last with numbers like these . If we dont get another stimulus bill, why isnt the stock market reacting more . Some are saying not until september. Those are questions that i have as well. Now lets get to some headlines happening outside the business world. Here is riddick a group. Ritika nancy pelosi calling back the house to deal with the postal Crisis Service this week. They have warned 46 states that they may not be able to deliver their ballots on time. The Federal Reserve is close to making its new inflation strategy official. Policymakers have been finishing up their first ever review of how they pursue the goals of maximum employment and price stability. It is believed the fed will now start tolerating inflation that goes temporarily above 2 . It is one of the worst heat waves in a generation that is threatening to take down californias power grid. The state has instituted the first rolling blackouts since the 2001 energy crisis. Authorities are trying to protect a system strained by so many people using air conditioners. Temperatures in parts of california may reach 112 degrees this week. Another week of chaos for british Prime Minister boris johnson. Wereockdown meant pupils unable to take their usual exams. Instead, the government says by an will be formed algorithm and teacher scores. When they came out, many said they were below expectations. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im ritika gupta. This is bloomberg. Alix i hear a lot of parents are going crazy over that. Says it is seeing Strong Demand for its f150 and bronco. That and much more coming up. This is bloomberg. Ritika it is time for the Bloomberg Business flash. Im ritika gupta. The Trump Administration plans oilell drilling rights and rights in the alaskan wildlife refuge. It has been offlimits for decades. Environmentalists say that it could endanger polar bears. Princ has agreed to buy ipia. Premiumresents a 10 over the Closing Price on friday. On a range ofs is autoimmune disorders. More cuts on the way at ryanair. The carrier will cut its flight capacity by 20 in september and october. They say forward bookings have reduced in the past 10 days. Travel restrictions have been renewed because of a surgeon coronavirus cases. Meanwhile, easyjet is closing down three locations in the u. K. Alix thank you so much. Demand iso ceo says strong since the launch of its new f150 and bronco. The automaker is hoping these models can reverse their fortunes. He spoke to david westin. Our strategyrt of to freshen our product portfolio, take a humancentered design approach, offer a compelling set of vehicles for the consumer to choose. They will provide great value and selection, whether it be the f150, the bronco, or the new mustang, as well as for commercial customers, the transit. We are innovating on behalf of our customers, taking a human centered design approach, and letting the consumer decide which best suits their needs. We have a great portfolio for our customers. Give us a sense on the demand on one side and the supply for the other. Is there enough demand to over ask for the vehicles . To be demand continues strong for the f150, even from the one that we are transitioning from. More021 model will be even tough, more productive for our customers. 165,000co has over reservations already. So we are working hard from a production standpoint to provide even more broncos for our customers more quickly. Most optimistic expectations before we launched, so we are excited to deliver that. What visibility do you have into the u. S. Consumer . It strikes me that a Different Group of consumers, the f150, more for the trade and construction business, the bronco more for consumers, families. What are you seeing with demand and the ability to pay . We have been impacted from a demand standpoint. But our commercial vehicle customers, these vehicles are for their livelihood. The new f150, it can increase road activity. 80 Degree Rotating seats. We are optimistic because the future is uncertain. Newbronco, this is a vehicle in our family. The response has been unexpected. Over 100 62 5000 reservations. As we look out, we are cautiously optimistic from an economic perspective. We are wellpositioned to deliver to our customers by taking a human centered design approach. Alix that was tim stone, the ford ceo. Gm was actually upgraded to a shortterm buy over at deutsche bank. The reason is a potential unit. F of its ev the conference call, Ceo Mary Barra at an interesting reaction to maybe selling it off, so the doors could be open to that, and would really value their ev unit independently from the rest of the company. President trump speaking on his way to minneapolis, the Postal Service front and center for him, saying they should raise prices for amazon. Update on any new stimulus talks. Coming up, retail, new reality. We will break down Consumer Trends with elias sabo. This is bloomberg. Alix live from new york, i am alix steel. Guy johnson is off today. President trump leading the wife leaving the white house on his way to minnesota via joint base and her spirit what he was saying is they should raise prices for amazon and other retailers. Talking about the elections, they said of course elections would not be fair with universal malein, but he does support opening more voting booth. He has an update on stimulus talks, which is there is no update on stimulus talks. He did approve an Emergency Declaration for iowa. Lets check the markets. You are seeing dollarin on the move, extending losses to as much as half of a percent. In terms of other market here, you did catch a record closing high for the s p. Sustained . And the story of u. S. Exceptionalism continue . We will check on first word news. Here is riddick i no, i am going to do it. The white house is downplaying a report that President Trump wants to meet with Vladimir Putin before the election. Robert obrien says there will not be a summit before the vote, but he says the administration would like to to come to the u. S. Wants there is an agreement on a new nuclear arms deal. The president s former National Security advisor says the mistakes he has made our reversible. Is an anomaly even within the republican party. One of the reasons im confident the damage he has done is can be corrected is there is no trust doctrine, notrump philosophy. That is one of the reason it is so perilous to have someone like him in the white house. The United Arab Emirates are taking steps to solidify peace efforts. Arranges trying to permission for israeli sites to cross over saudi arabia so there can be direct air travel. Members of the house are cutting short there vacation. House Speaker Nancy Pelosi calling them back to washington to deal with the growing crisis over the