Anna edwards is in for jon ferro and lisa abramowicz. Ferro taking the entire month off. Lisa only taking half the month off. We are thrilled anna edwards could join us today as well. Remember when augusts were boring . August is no longer boring, is it . Anna i remember when all of europe went on holiday in august, but no longer. We got alltime highs on u. S. Stocks. Is that really out of kilter with the underlying u. S. Economy comes with the underlying global ok . Omic story, and is that tom the persistency across yields is amazing. Yields come up 4, 5, 6 days, and they roll over and come back down. We are not through to new lows in the last number of weeks on yield, but nevertheless, watching that very closely. We will get to that with an important guest any moment. David malpass with us later in the hour. I want to go to a story which we have been covering the last number of days. For me in america, it has gone radio silent. That is belarus. This is between poland and russia, with this huge uproar over an election, where the leader took an 80 vote. Onthere any Forward Motion our knowledge of the future of belarus . Anna we had leaders talking, and there are a lot of leaders in this conversation. President putin has been. Peaking to merkel the president of belarus as if in a lot of troops on his border with two different you countries. That is seemingly added to tensions, but they are getting together to talk about this, and hopefully things can deescalate from here. Tom tori clark leading our coverage in moscow and across Eastern Europe for this continuing coverage. Maybe off the radar for those of you on radio and tv in america, but nonetheless really important. Particularly on nato as well. In the United States, Convention Coverage will be one of our themes here in the hour. Let me do a data check here. The yield comes in to basis point. To thatg to get inflationadjusted yield in a moment. 1. 0 5 . Historically, that is not the textbooks. Dollar, i am going to call it stable. Terling, maybe that is why ferro, it is amazing what he can do with a 1. 32 sterling. To help us synthesize this, to get you through august and into biancoumn is jim furby juncker jim bianco for Bianco Research out of chicago. I love what you said about the sitting back of where tips about this enigma of where tips are. Jim the problem is the Federal Reserve is the biggest player in that market. Since march, they have bought 25 bought 250have billion worth of tips. If youre looking at the outlook for inflation or for the economy, you have to be careful. It is a bit distorted because the biggest buyer is the central bank. It shouldnt be ignored or not looked at, but it has become more complicated to try and understand it. Signals tom what other signals have value to consider inflation . James you would have to go away from the signals that are not with the central bank. The university of Michigan Survey or the Consumer Confidence survey or the Commodity Markets themselves, Central Banks are playing in those markets, and those are turning higher. They are expecting more inflation as we move forward from here. Theres definitely signals on the horizon that inflation is coming. Carefulbe a little bit with over reading the tips market. I wouldnt rely on some of those nonmarket indicators. Anna good morning to you, jim. How confident are you that inflation readings, we just got some out of the u. K. This morning, inflation a little bit stronger than had been anticipated, but that might be shortlived. How confident are you that inflation readings are enough accurate information, given the way spending patterns have shifted so much. That thet statisticians rely on might not be the baskets that you and i consume. Jim jim thats exactly right. What we are consuming now is what we werent consuming four or five months ago, so there could be a bit of a distortion. But at the end of the day, lets member what is going on, which is the fundamental for pushing inflation higher. We havent higher we have a higher unappointed rate. The economy is at a lower level than it was a few months ago, and we are stimulating the economy by giving people either stimulus checks or extra unemployment. , and weveess supply got demand being stimulated. That should lead to higher prices, otherwise known as inflation. I think that is what a lot of the surveys are telling us might be coming. What we knowone about the way Central Banks want to keep the cost of funding death low at this point, do we really see inflation coming meaningfully . Say expectations have bounced up from the lows of march, but that doesnt necessarily mean we are off to the races from here. Jim that is a good point. I thing we will see meaningful inflation probably the second half of 2021 or into 2022 as the economy strengthens and all of this stimulus starts to add in as well. The central bank, especially be Federal Reserve, will go to an average inflation target. They will say to percent is not their target, it is their average, so they can run it above 2 . They are not going to change policy one inch. They are just going to announce that the policy is changing. Tom this is like when the white sox are better than the cubs, and that only happens once a century. Is there any evidence out there whatsoever that governments can reflate an economy, that governments can somehow magically make percent or 3 make 2 or 3 inflation up here . Jim theres no evidence at all. We havent seen that in 30 years. I think you should go to the other side of the equation, too. Theres very little evidence that the governments or the Central Banks could stop it if they wanted to stop it. Tom what is so important here is the fed in their timeline. Do you just assume their timeline is way out where the ortgeist is, that it is 23 2024 . Jim they want to keep sewer rates out to 2023 or 2024, but if they are only going to do it one meeting at a time, theres going to be no inflation, and then when it starts to percolate too much, they will change on a dime. What i suspect is when it is all said and done, they will be moving on inflation a lot sooner than they think, probably in a year to 18 months as opposed to two or three years. I want you to address for our listeners and viewers this stock market. It seems to be uniquely and differently unloved. How do you participate . Back. Am going to push i understand people have said it is the most hated market ever. We are seeing that prepandemic, but there are plenty of instances or signals that the public is in it in a big way. The type of retail accounts which now accounts for 25 of all of the volume, which was practically nothing a couple of years ago. They are in it in a big way. They are in it in a big way, and the concentration you see in the faang stocks. Those are almost 1 4 of the s p. They are in that market, and i think as far as your question, the reason they hated it, those bottom 300 companies, i think they are still struggling with the economy to return to normal, but those top companies, they are stayathome companies, and they are doing very well. They are pushing the whole index higher. Bianco there from chicago this morning. Is this happening in the United Kingdom . Are people on the couch daytrading apple . Anna not as much is in the u. S. We had that from a guest last hour, that that was one of the reasons why the u. S. Stock market was outperforming european stocks. We see that to a large degree. Equities areopean made up of very different sectors. Sament see the daytrading phenomenon. Tom only she can take over for two people as well. This is a wonderful guest coming up. You really want to stay with us on radio and television. Sometimes i guests shows up, and you are like, yeah, yeah. Then they open their mouths and they are just brilliant. Henrietta treyz will be with us on the policy after the two conventions. Henrietta treyz on what happens the first wednesday of november. Please stay with us. It is a simulcast, bloomberg radio, bloomberg television. Stay with us. Good morning. Karina with the first word news, im karina mitchell. Joe biden shooting down President Trumps attempts to paint him as a puppet of progressives. Democrats formally nominated biden for novembers election. The Virtual Convention included testimonialsfrom the partys old guard testimonials from the partys old guard such as bill clinton. If you want a president who defines the job as spending hours a day watching television and on twitter, you got your man. In a real crisis, it collapses like a house of cards. Covid doesnt respond to any of that. Two beat it, youve got to actually go to work and deal with the facts. The Trump Administration sees a path to a pared down 500 billion stimulus deal. The package would eliminate the biggest areas of disagreement between republicans and democrats. It would include financial help for the postal service, aid to schools, and money for businesses to keep workers employed. Democrats may also agree to a smaller deal. Meanwhile, President Trump raising questions about the future of that trade deal china. The president says he called off last weeks talks with beijing. He says he doesnt want to talk to china right now. He called chinas handling of the coronavirus unthinkable. Outbreaks in florida and california are showing signs of easing. Hospitalizations are down almost 30 from a peak in july. Target posted its fastest sales growth ever in the quarter. Sales were almost three times higher than the average estimate. Adjusted earnings also had an alltime high. The ceo says School Shopping season started more slowly than usual, but sales were up more than 10 this month. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. Pres. Trump i postponed talks with china. I dont want to deal with them now. With what they did to do this country into the world, i dont want to talk to china right now, ok . Tom the president of the United States. The president always makes appearances, trying to stay within the news cycle. Certainly mr. Trump is no exception. He will have his moment here and, more in a number of days. On policy, and may be less on the convention, but on the stimulus nonevent, it is wonderful to speak to Henrietta Treyz. Every it is almost aims almost game theory. I am fascinated by the incentive of Speaker Pelosi right now to compromise. What is her bias this morning to compromise with republicans on some form of stimulus . Henrietta thanks for having me this morning. I think compromise is an interesting word because mostly we are seeing that she is staying at the table. I get questions like this all the time. Theres really no alternative. You have to say that. Neither republicans nor democrats can step away and say, you know what . The pandemic is fine. They have to engage in at least the perception that they are having a dialogue. But what i can tell you is that there is no negotiation happening right now. Democrats are going to come in on saturday and vote on a usps package that may or may not include some unemployment benefits. That is still as far apart as we have been for the last five or six weeks. The samethere is Henrietta Treyz power meter. Who holds the power here . Henrietta in my opinion, the Minority Party always holds the power. A great component of this for investors is that we have a Government Shutdown looming. If it werent for a Government Shutdown, i would say that both of the two sides are fighting more of a political war than an economic war. I think we are going to be fighting through at least september 21. That means several weeks of expired unemployment benefits. The payroll tax suspension is obviously not being implement it across the board, and we will be dealing with a much starker picture in late september than we are right now. Each side thinks they are winning this debate, to your previous point. The republican conference is much more poignant than they have been much more buoyant than they have been over june, july august. Tom all of the payroll tax people are like one in five jobs in america. Whatever the ratio is, it is a small number. Are these people at a Virtual Convention, is the president building a scaffold at the white house, do they understand the pain that is out there with claims tomorrow . Henrietta i dont think so at all. I think you heard a lot at the Convention Last night. Frombly most powerfully jill biden. Students are trying to get back to school. The expired Unemployment Insurance benefits have been lapsed now for almost four weeks. That is the principal focus on main street, and definitely not in d. C. , where november 3 is all we can talk about. This is surveillance exclusive, when Henrietta Treyz abandons her childrens first day of school to come on bloomberg surveillance. Anna edwards, youve got to be dazzled by that. Anna we are privileged. [laughter] thank you very much. We will let you go shortly. Let me ask you, what plays well at the ballot box in november around the way that these two parties handle this need for fiscal stimulus, if that is the right word . Is there the trap that one party could mishandle this and then be blamed . Henrietta that is essentially right. The interesting component for the last three or four weeks is the event where the republican conference is not catering to what Speaker Pelosi and minority leader schumer want is so much more powerful and a much more driving force galvanizing republicans, uniting the idea of a win right now, that it is creating enough room to put out a skinny package. The idea that they are not giving into pelosi is a really resident election platform for the republican conference right now, and that is why youre seeing them stick to this idea that they are not going to pass a 2. 5 trillion package. With that is actually doing is shaking another chance to release a skinny package that will be Unemployment Insurance benefits, the ppp funding, business liability to keep the government open into december. That is a helpful step. We have 75 odds that we will get a deal by the end of september, but it is at least five weeks away, and it is not come to look like either of the bills we have seen so far. But the idea that the republicans are winning by bucking policy i think is the most important point. Context,m a european we got a lot of fiscal stimulus here as well, and there is always obsession with how much of it will be earmarked for green projects, how much of it goes in the environmentally friendly direction. Is that going to be a focus after november, do you think . Henrietta i see that mostly in the restaurant space. Minority, veteran, female owned businesses, that will definitely be a component. That will be part of if they are ,lected, a biden harris ticket and pelosi as speaker of the house this november. Tom Henrietta Treyz, always brilliant. Henrietta, take care of your children. Youve abandoned them. Ive been looking at this number , and i should have also done this in our so ago. Yesterday, walmart showed up 97 digital sales. The statistic for target is up 195 . I dont know how you sustain that. A pandemic, i get it. It is a oneoff. But these are shocking numbers. Anna you asked me if people were here trading. Maybe they are not daytrading. Maybe they are doing online shopping. That is going to make the difference between the retailers to survive and thrive out of this, and those who dont. Tom this is a huge mystery here, the game changing. And on ourd economy political economy, our conversation of today coming up. David malpass is the World Bank President. Mr. Malpass has spearheaded the effort toward aid and reaction to the pandemic. We will get an update on the pandemic, and update on 2021 for his world bank. Red and green on the screen with futures. Theres a shift on the market with the real yield ever lower, 1. 06 . That is changing on this wednesday morning. On bloomberg radio, on bloomberg television, the simulcast. This is bloomberg. 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We need one person to replace them. Anna edwards in london. Spearheading all of our work in london. We have red and green on the screen. A low bit of turn to the market. The real yield is being tested to new lows. We are not back to new lows. There has been a three day adjustment from the yield recovery to a lower yield on global close on Global Growth worries. Right now our conversation with World Bank PresidentDavid Malpass. I was talking without eric martin, and he was certain a key topic was debt relief for beleaguered nations. To begin, give us an update on the urgency of debt rel