China is doing better than good. We get a nice lift. To your point, i cannot remember a fed meeting where i have been more distracted by other news. Jonathan because the other news matters more. At the moment, the Federal Reserve is basically done when it comes to the framework shift. We have seen that. When it comes to the Balance Sheet, we have seen a huge expansion. Butink there will be tweaks for many people, the most important catalyst is physical. Tom it is physical based on week demand. I can or where i saw this. I will give axios credit. It was a food bank in richmond, automobile, car, by and it looked like field of dreams the line of cars went off into the distance and it was shockingly sad how people were lined up to get food, having that much difficulty. Jonathan could not agree with you more. Were living in two worlds. The old world is struggling. Love the we see our place, particularly in the airline business. Airbus talking about the prospect of more than still to come. The new world, amazon out there kth 100 k buying 100 employees. Two different worlds, polar opposites. Lisa there is a question of how the Economic Data reflects this. Paul donovan said this morning a recent report there is an absurd level of trust that Economic Data data is accurate and there is a failure to challenge with the data is saying and that is a salient point at a time were getting Economic Data and markets dont know how to read it. That is a key concern. There is a question on how the fed will read it as well. Jonathan what is coming up . Lisa we will look at some of that data, u. S. August industrial and manufacturing production. Looking for it to confirm the popular perception that the easy gains have been gotten. 1 00 p. M. , i know tom loves bond options. Tom arsenal pregame. Lisa i know you watch this carefully. People are wondering how much people will be watching the fed pullback as a buyer. Also, the fomc gathering for a twoday policy meeting. Inflation. What, tom . Jonathan what are you complaining about . Ohe isn rumored to take on the mets and Lisa Abramowicz kobe the first base coach. Abramowicz will be the first base coach. What does he need to does he need to do to turn around the sorriest franchise in baseball . Lisa a means to lower pay and increase results. That is the bottom line. They are already losing. They are already at the bottom of the conference and it has been a short season. It is a very expensive team. Tom look at that passion. The show is the wrath. Look at the passion from abramowitz. Lisa no one needs to hear me talk about baseball. Jonathan you know what i love from lisa, she has this one line, she says let me tell you something. Says let me tell you something, it means you are all idiots. Lisa carry on, john. Jonathan you will hear it over the next couple of hours when she refers to tom and me. 07 on the s p. Weakest. I have to say, the range and treasuries has really helped, and not many people think it will break soon. Europedollar approaches 1. 19. Just aalreal this coming little bit. It is not a yield real yield is coming just a little bit. There it is, a lesser negative statistic. Now, janice right joining us right now, jpmorgan strut this is your most recent research about the bond market, where do you get that Downside Protection from . What is the answer . Is a difficult question. With all difficult questions, i think it depends. Say first the underlying trend is a positive one based on fundamental factors. You have surprising earlycycle dynamics. The fed is providing support. The balance of risk on the downside is pretty good. It is a portfolio construction headache in the sense your usual sources of protection are the longer active. The most impressive thing over the last month has been just the fact that bond yields do not move. You had a point where u. S. Equities were down 4 or 5 . 10year treasuries were down two basis points. The negative stockbond correlation is no longer a source of negative balancing portfolios. The question is how do you get that . The answer is you have to assemble a set of more constructive, favorable correlations in your portfolio. One is credit. If you are taking a pro risk view, positions in credit are not correlated and because of the fed put, the implicit and explicit guarantees them a credit have been has been much less expensive. That is one. The second is the dollar. Everyone is talking about how the dollar will appreciate in trend terms. What goes wrong. There is no strong to limit to how strong the dollar can get. Funds thatthe hedge on technologies slept. Slipped. How important is it to go with hedge funds in their belief, or is that contrary into them . Which way does that count . Ben well, average returns for hedge funds over the last 20 years have not spectacular. Maybe you will take that as a contrarian indicator. I think you have to focus on what those directional trends are, and were not looking at that as a singular indicator here. Tom what is your indicator on Technology Funds . Ray dalio coming up this afternoon. A blistering article on bridgewater is that the salvation for hedge funds, to go the other way and pile into tech . It raises an important question will Growth Stocks continue to lead. It feeds into the same concept of where his protection in your portfolio. Typically with it about the u. S. Equity market is a highquality return on your equity market. Whenolatility, especially leading, is very much centered around the u. S. Ast that is telling you is you diversify internationally, you are looking a little bit less in the u. S. , and a little more upside for that balance more outside for that balance. Lisa when you say outside, are you looking to china . En you have consumer demand out of the china data, but you see pretty much everywhere. We are not in the blistering fast growth we saw in may and june, but the consumer is in recovery mode. Ou see signs of the inventory cycle is amplifying that. The markets that are leveraged good will do well here. That includes emerging markets, to some extent europe. Think about u. S. Largecap and a combo with europe as your portfolio, that makes sense. Jonathan great to catch up. That final point, really important, manufacturing easy to turn back after the pandemic. The consumer much, much harder to do. What we see in china is important. The switch back on manufacturing and retail sales is where the outperformance was. Thats what we want to see not just across the United States, europe, too. Is difficult to transfer china to any other economic platform, including the net states. Jonathan couldnt agree more. Scotte just talked to stringer, comptroller, running for mayor and he went right to it the spread for jpmorgan and Small Businesses on third avenue has never been greater. Jonathan could not agree more. Let me tell you something here the u. K. Economic kingdom united kingdom, the funniest statistic, deanna plymouth rate will look radically different if they allow it to end in a months time. That is the story at the time struggling to get a read on this economy, not just in the u. K. , but worldwide. Absolutely. You wonder to that point, the fed meeting tomorrow, is this a fed meeting about the united fedes of america, or the banker to the rest of the world . Jonathan lisa might want to weigh in, but the fed is going forecast. Upgrade its the forecast on unemployment is too depressing compared to where we are. The Unemployment Rate is already low. Tom lets go to the depressing want to find out. Lisa . Lisa thanks a lot, tom. Let me tell you something, it is pretty depressing out there. [laughter] lisa the data has not been as surprising as people expected. It is continuing to surprise to the upside. All the pain we see with data is not been reflected to the degree expected. Jonathan you realize you are exposed. People will play a tricky game with this. Lisa if you give me a bottle of wine, i will play it. Jonathan i am happy to see you drunk on bloomberg surveillance in the morning. Then there are two of you. This is bloomberg. News, ritika word gupta, on capitol hill, a long shot attempt to break the deadlock over another Coronavirus Relief bill. A 15member crew will unveil a 1. 5 trillion stimulus package today. It also compromises on the two to state issues, aid and global government and supplemental Unemployment Insurance. Hurricane sally slowed slightly overnight in the gulf of mexico. It has been downgraded to a category one hurricane with winds of 85 miles an hour. Sally will make landfall tonight or early tomorrow. Exactly where is difficult to say. The hurricane warning will extend from new orleans to the florida panhandle. There are fears the hurricane will bring a deadly storm surge and flooding. Bill gates used to think of the fda as the premier authority. Not anymore. The banner discussed politicizing covid19 treatments and vaccines in an interview with erik schatzker. Bill any suggestion that a politician helped create the vaccine or it is faster because of a politician is a very dangerous thing. We saw with the completely bungled plasma statement, when you start pressuring people to say optimistic things, they go completely off the rails. The fda lost a lot of credibility there. Ritika we will have more of that interview with bill gates coming up on bloomberg tv. 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. I am ritika gupta. This is bloomberg. Bill any suggestion that a politician helped create a vaccine or it faster because of a politician is a very dangerous thing. We saw with the completely bungled plasma statement that when you start pressuring people to say optimistic things they go completely off the rails. So, the fda lost a lot of credibility there. Jonathan bill gates there, the microsoft cofounder, trying to separate the politics away from the vaccine effort. A big story over the last several months. For new york city and london, good morning here is your price action. Two hours and 12 minutes away from the opening bell, trying to get away from a twoweek loss from the essence on the s p 500. We bounced back yesterday we continue today. Were up. 07 . Approachingt, euro 1. 19. That is what we are right now. The bond market, i had of the fed position, 0. 678 . A snoozer in the equity market. How long will that be the case . Tom the vix has been a remarkable story of the last 10 days. It is the right angle of new jersey, the fifth congressional district, buttressed up in northwestern new jersey. It is a really, really twisted and trusting district that goes moderate, and this is about moderates, those close elections, 52 40 8 , etc. Kevin cirilli is expert at these kevin,ts nationwide, and the Fifth District in new jersey brings us to this erik wasson report today of a 1. 5 trillion moderate stimulus bill. Is it dead on arrival . Kevin this is the ace up the sleeve of treasury secretary Steven Mnuchin who had been referring to a third option related to the stimulus. They are known as a Problem Solver caucus, 15 members, moderates, republicans and democrats both. Erik wasson will be unveiling a 1. 5 trillion stimulus package. It splits the difference on a host of different issues, including the issue of Unemployment Insurance at about 450 million 450 per week, and it is something mcconnell and pelosi could not get their respective camps entrenched on both sides to agree to. We will see if there is a narrow path to agreement. Tom an important point, these moderates are people that really, really, really risk losing in this election. They usually when by close votes. Does mcconnell and policy care about them . Kevin this is an opportunity for congressman scott hammer and congressman reed, a republican from new york, to really throw should they clout be able to secure this monumental political capital. It is also an opportunity rather for the white house to back a moderate proposal that could sell well in the districts. I think from a broader standpoint, many of these democrats, and i am sure they do not want me to say which ones, in the private Problem Solver caucus, are having conversations with senior members of the administration on a host of issues pertaining to stimulus and they have for some time. On the issue of state and local tax reduction, there were key groups on the fun with the white house and meeting with the white house privately in order to alleviate some of their concerns. Tom what happens on the stimulus bill today this moderate hill. What are you looking for the next 24 hours kevin yesterday when i spoke to lawmakers they were skeptical anything could get done before the election, but ultimately the 1. 5 trying dollar price tag on the Problem Solver caucus proposal is something the markets had taken to expectations. So, it is a narrow path. We will see if it gets any pickup. What i will be listening for a Speaker Pelosi and meter mcconnell to see if they will be on board with this. Jonathan lets talk about substance. Unemployment benefits 600. That is what used to be. 450 is what it would be in this bill i am trying to figure angered,ould be more democrats because it is less than 600, or publicans because it is more than 300 . This both sides will say is as good as it gets. This is an opportunity for Speaker Pelosi to say this is not my idea, but the moderates idea and will be able to peel off to any of the progressives that they fought for something more progressive but it ended up at the negotiating table. Lisa kevin, is this the less chance for congress to pass another fiscal report support plan . Kevin this is the last chance before an election. Session, it gets more interesting. There are a handful of benefits that expire at the end of the year. The artificial cliff that exists at the end of the month in terms of keeping the government open, the next artificial cliff is december 31. Lisa politically, wouldnt the president want to pass an additional round of support . Wouldnt the president be trying to push this through or is he of the month the economy is recovering well enough on its own . Kevin i think politically speaking, based on my reporting, there is definitely incentive for President Trump to advance some type of fiscal stimulus. If you go global, if you look at what is happening in brazil with bolsonaro seeing the benefit of fiscal stimulus that has helped him in the polls, there is an example of how the economy has surpassed the issue of the pandemic in a country like brazil. If you go to israel where they reimposed lockdowns for three weeks, that, one can make the case would be politically advantageous to democrats. You have the ability to cover mice with moderates at a time where the president is struggling politically in suburbs that would be one can make the case that was the politically advantageous. Jonathan good to catch up with you. It might be politically advantageous to someone. This could be good news for the economy and people going through some pain. That has to be the big takeaway. 11 00 a. M. Eastern is when we need to look out for that news conference. Tom we will have to see. The desperation, like lisa mentioned, it is now or never people have been talking about this through all of august. It is the middle of september and now or never is here. Jonathan i think, tom, to be fair, and lisa might agree with us, since we passed the last bill, ever since, waiting to calibrate or recalibrate the next effort. It never came. Lisa it never came. Now the tone shifted and perhaps people are saying it is not as needed to that is what i am watching the data is better than expected, how much momentum is there, is there validity to this, or are people blind to what is coming if we do not get more support . Jonathan let me build on that. The tone is shifting. It is shifting in the sea suite. You have Michael Oleary of ryanair, same as get back to business. Citi resuming job cuts. There was a stigma attached to that language. See suites are feeling bolder. Lets get back to business and get things done. Tom i would say two things but withight, citigroup there are substantial cuts as they bring in risk managers, and the other is money is free. The last hour carnaval is going to try to raise 1 billion in equity, the beleaguered cruise line. Money cost nothing right now. Tom it might cost jonathan it might cost something for the likes of carnival. We will talk about that later. This is bloomberg. Look here, its your very own allinone Entertainment Experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Jonathan two hours away from the opening bell in new york city. Lets get you that price action. 7 . 00, a lift, up a lift yesterday, too. Eurodollar 1. 19. 0. 63 . Rket, in and around 11 . The effective yield now 6 . That gives you an idea how much that note has rallied and how much spreads have come in. And hasbb piece of debt really performed well over the last several months. Tom as my sainted grandfather said, he said you cannot make money in bonds. Think of the price appreciation, from 11 to 6 . Be aifts today, got to good feeling about china and maybe economic growth. Nowave a guest joining us with steve bullock, their chief economist. People stiefel, their chief economist. What is the allin Unemployment Rate . Is a double digit . It could be. The civilian rate has come down to 8. 4 . There has been vast improvement from early all in the pandemic, but we do not know if it is fully capturing what has been happening in the labor market. The true Unemployment Rate is much likely to be closer to the doubledigit range. But as we wait for the fed decision later this week, tomorrow exactly, we think the fed will emphasize that improvement we have seen in the labor market. The further growth we have seen in term