Day for the Federal Reserve system. It is a meeting of mystery. Our Michael Mckee will be there for the press conference, special coverage this afternoon. But right now, a great conversation on some of the challenges that we are going to see. Jon ferro, to me, the major challenge, with futures up 17, you mentioned this earlier, this morning, is the two americans that are out there, that two americans that are out there right now, jon ferro, are nothing like what john edwards ever thought he would see. Jonathan just compare and contrast, tom, take the airlines on one hand you can take any sector, the retail sector, and compare it to fintech right now. Big tech on fire. Other companies, tom, literally slashing in tens of thousands, and a central bank that has to set policy for both economies. That is a tremendously difficult position to be in as a central bank right now, and that will create distortion. Some would argue that is already happening. Tom Lisa Abramowicz, within your reading, is there any salvation for Small Businesses . Jamie dimon can work for john powell, j. P. Morgan, john deere out in the midwest of the country, but what about small business, the fabric of the nation . Lisa this has been a huge issue, because small banks do a lot of lending to the businesses, i just want to point out, though, that the two americas, the two the haves and the havenots, there is some conversion starting with the second wave of layoffs, and this is important, especially as big banks announce their biggest week of layoffs that is to come, since the financial crisis more than a decade ago. Tom, i think this is important. You cannot have a dual economy like this without some Collateral Damage that. Really affects the entire economy. Tom we will see, and we welcome all of you on bloomberg television, radio, simulcast. Thank you for your love notes for jon ferro and Lisa Abramowicz, and the hate mail i have been getting, jon, has been just arduous. To be honest, and this is the only reason we booked oppenheimer, it has been painful, john, they love and affection of arsenal that i have seen in the last number of days and the top, i mean, the loss was terrible, but i just pulled rank here and said get me a spurs fan. Jonathan a spurs fan . Wow. You actually said it. The next guest actually calls them by the correct name. Tom that would be true. Jonathan who are they anyway . Tom i cant pronounce them. You know, they whooped them. Jonathan Peter Oppenheimer joins us now, chief Global Equity strategist at goldman sachs. Peter, i normally have to deal with this by myself. Can you explain to tom keene, please, who garrett sale is and why you might be happy very soon . Peter thank you, thank you, john. Just to correct them i think he was talking about entertain, but veryheless, we saw concerned about the prospects. Yeah, it is going to be a tricky thing for them to save. Tom you know, what is so important here, Peter Oppenheimer, seriously, save the day, but far more importantly, a huge part of this market needs to be saved if they are not amazon and they are not apple, and i love, love, love the phrase you coined the hope phase. Right nowe hope phase for investors and the huge body of people who do not own the highflying techs . Peter firstly, what is the hope phase . Virtually, every bull market starts in a recession, after a period of four or five years, when investors, for some reason, start to get more optimistic about a recovery, and that initial hope phase, the hope of recovery, tends to be reflected in quite the explosive rises in stock prices, maybe by generation expansion, and that is exactly what we have seen, really, since march. What you say, though, is interesting, that this new phase, this new cycle has been the same leadership as we were seeing before, with the technologies, Growth Companies continue to outperform significantly. The old economy and the deep value cost to market, but it is consistent with this ongoing shift to more negative real Interest Rates, and actually the disruption that we are seeing as a result of the technology companies, changing the nature of many of the traditional businesses as the digital revolution continues. So i think, strategically, we are in a new bull market phase. That is a good thing. But the secular trend is likely to be quite similar in terms of leadership. Jonathan peter, you have made the argument, though, that europe does not have to be left for dead here. This is not just the United States big tech story. Can you walk us through the argument you have been making over the last several months . Lets look, again, back at the last cycle, that appeared after the financial crisis. It was marked by very good returns in Financial Assets as rates came down, but the u. S. Is a massive outperform or come over all equity markets, and the many reasons it is not the only 1 the main reason, with its exposure to the thing that we are doing very well technology where is europe, of course, had a massive exposure to the areas of the market that were really at the epicenter of the crisis, you know, it had about onefourth of its investment in banks, another 1 10 in oil, for example. As we roll into where we are today, banks have fallen to 6 index in europe. We have technology about being twice the size of the oil sector. Thehile it does not have same significant concentration of leaders in technology in europe as we do, the market is becoming more growthy, and it is becoming more less valueorientated. And what you have is a similar style of concentration. You have the top 10 or 11 companies in europe, that have standing to be the starting lesson in each of their names. Even these companies, which are cashgenerative, strong balance sheets, a combination of technology, health care, and that is really, again, what the market is paying for in an environment of otherwise weak growth and very low rates, and i think that will probably continue. Lisa grownovers . Did i get that right . That is a new one for me. [laughs] how much do you expect u. S. Equities to outperform over the next, say, one, two years . Peter we do not see much outperformance, we just see much similar performance, but i think that is increasing in itself, it is just more geographical diversification. You know, the last 10 years, we saw huge dominance of the u. S. , and now i think we will get much more similar returns across the region, speaking in dollar terms, because we think the dollars weakness that we have seen in the recent past will continue, silver for dollar investors, there will be some benefit to diversification from investors,ollar there will be some benefit to diversification from the dollar, and also, again, we should also be looking more at opportunities, where our companies driving, irrespective of region . I will give you know example, companies in europe, at the epicenter of the renewables revolution, have actually outperformed the nasdaq over the last couple of years. And there are pockets of growth, though i think investors should be focused outside of the u. S. Tom Peter Oppenheimer, you went right where i wanted to go. You are reading my mind, on the alpha generation necessary right now. What i want to talk about is ray dalios interview yesterday with erik schatzker, and he talked about literally blind diversification. I do not buy that for a single second. Peteres oppenheimer how do you define a diversification away from stocks . What is your approach . Peter it is a great question, and it goes beyond where you go for equity. Bear in mind that multiasset funds, that have grown hugely in the last decade, and have been mixes,ccessful, bonds, generates one of the longest and strongest bull markets in history, and a good chunk of that, given that we are now at the zero bound, is likely to generate a very low return, if not a zero return. So moving up the risk curve is partly what these policies are doing, within the context of equities. I think you need to diversify out of the Pure Technology growth part of the market or looking at how technology is evolving and entering into medical technology and Educational Technology and environmental technology. And actually, the environmental drivers of growth, we think, are going to be a really significant theme over the next 10 years or so. It is already really becoming a big focus here in europe with the green deal, which has put some money behind this idea. It needs a support now and provide growth opportunities, so i think despite the challenges economically, it is fair to say they are there are some real growth engines and opportunities that are Still Available for investors, if they look to diversify away from the concentration of a very small number of names. Jonathan peter, great to catch up. Look forward to seeing you soon. Pete oppenheimer of goldman sachs, an important conversation. I know you are dying to talk about garrett sales, so lets talk about it, real madrid, gets paid about 6000 sterling a week, and the big question is whether the spurs come if they do get hold of him, will they pay has wages . Will real madrid have to pay his wages to get him on loan over to the spurs and get some of that money up the wage bill . Tom we make jokes, folks, but i uninformed. Cut to the chase is 31 years old old in soccer . Jonathan no. Bale, like gareth cristiano ronaldo, who are just supreme athletes, this breed, tom, have built themselves up and really embrace being in the gym and committing themselves to this career. I think they could have a career well into the next years. Theink gareth bale, it is injuries, not the age. Tom he reminds me of roy cant. He is outstanding. Lt. Gov. Hochul Jonathan Neil dutta, Renaissance Macro research, head of u. S. Economic research, is coming up. You were going to have to explain that joke coming up. [laughter] this is bloomberg. Ritika when the first word news, this is ready to Hurricane Sally is bringing this is ritika gupta. Hurricane sally is bringing a bunch of rain to gulf shores, alabama. Sally is now a category 2 hurricane with now 100 mile an hour winds. President trump is trying to decide whether to approve oracles alliance with tiktok. They will examine the companys proposal. The president has ellanded that tiktok s for National Security reasons. Predicting Interest Rates will stay near 0 until 2023. Jeromen jarma powell will talk to reporters after a meeting. Amazon wants to make shopping online about as fast as a quick run to the store. Bloomberg has learned the Worlds Largest online retailer will open 1000 hubs in cities and suburbs all over the u. S. That will help amazon take on walmart better when it comes to sameday delivery. Global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am ritika gupta. This is bloomberg. Markets are always, always too pessimistic about recovery from a crisis. This is no different the previous crisis. They have failed to predict demand, the speed of consumers, in the face of a challenge. Jonathan we will speak to a man who did not believe things would not snap back quickly. He believed they would. That was paul donovan of ubs. In just a moment, i am looking forward to that conversation. Several hours after that, you will hear from the Federal Reserve and chairman powell. Eurodollar 1. 1860. The renminbi strengthened overnight, and the bond market at a single basis weight at 0. 67 . 39. 12, just south of 40. Tom mentioned it i moment ago, several months ago, you had to be constructive on this economy. There was almost a social stigma attached to it, because you sounded somewhat crazy. Moves ton, data has the upside pretty consistently, and a small fragment of wall street, tom, you have got to say, they got it right. Tom jon, the resiliency of the market, part of the image of looking forward to what the economy is going to do is profound. For example, in 2007, when you and i and everybody else went to cash, the dow was down about 13,000. Now the dow is at 28,000. One of our great glass halffull economists is neil dutta of Renaissance Macro, and on this day of an important fed meeting, he is the optimistic one. Jerometta, how will powell reframe the optimism the fed believes in . Neil i think you will see some of that, tom, just frankly in their economic projections. The unappointed rate is lower than where they thought it would be back in june. Inflation is somewhat higher than they thought it would be in june. Growth looks like it is coming in a little bit firmer, so you will see, i think, i think just a marked assessment and upward forecasts,f their and they would not be changing anything. Despite improving data, the fed is quite accommodative and plans to be so for the foreseeable future. It is just how they communicate that accommodation to the market is really the only debate that is left, and it remains to be seen whether they do that at this meeting. But they are going to stayed others, and they are upping their foreig forecast. It is still a dovish shift, because they are not changing what they are doing, than that is good for markets. Jonathan neil, we have got to give you a victory lap, we really do, you are constructive when the data was drowning, and we were all dripping into man gloom, with good reason at the time. Walk us through the signposts you are looking for and the things that help you guide your trajectory through all of this and shape a forecast that turns out to be more accurate than most. Neil well, i think you just start from an initial premise of you can either believe, a, america somehow this uniquely failed develop state or not, and, i dont know, i think not. And there is nothing about the last 10 years, since the financial crisis, that tells me that europe is going to come out of this better than we would. I mean, so, look and that is the premise i start from. You know, to me, obviously the march and april period were very painful, but we are slowly reopening, and the primary strength, i think, on Consumer Spending has been a physical one. I mean, if you look at disposable income, because what the government has done, it is actually higher now than it was in february, so and if you look at things like deposits at commercial banks, they are still quite elevated, which tells me that, you know, to some extent, people have not actually spent a lot of the money that they were given to give themselves get themselves through the crisis. Now is the economy has reopened, it is very encouraging to see that cases are coming down in most of the country. We have had some flareups, for example, in College Towns and places in the midwest, but generally speaking, cases are down, and we do a better job suppressing the virus, that gives us more coverage. We will continue to open things in the economy and the country. For example, in new york, a city that has embraced very strict lockdowns, we are going to Indoor Dining at the end of the month. San francisco is reopening. That is going to help. There is no doubt about that in my mind. And that will mitigate some of the pressure others were talking about. If you think state and local government revenues or a problem now, do you think they will be more or less of a problem a month from now . I am going to guess less. That does not mean things are good. A lot of this depends on who you talk to. If you talk to an academic economist, most of them will talk about levels, and the level in the economy is nowhere anybody wants it to be. But i am a business economist. My primary job is to tell our clients whether i think the growth of the economy is going to be sufficient to continue the upward momentum in equity prices and markets generally or not. And if that is the question i am being asked, the answer to that question is, yes, the economy can motor ahead, and for investors, that means maybe you want to think about going into those names that require people to actually have some proximity to other people as opposed to, you know, names where you just dream something on your tv all day long. Lisa neil, do you think the economy is Strong Enough to not need another round of fiscal support . Neil i think, at this point, for the markets, i dont think it matters at this point. You know, that is what i determine as need. But in terms of people, there is no excuse for the government not to do something. I mean, we can borrow money today and pay back less after inflation 10 years from now. Im assuming theres more of a need for the money today. We may as well do it. There is no excuse not to think for now, the pace of reopening is probably going to offset some of the fiscal people were talking about in august. And remember, folks were looking e. Coyote moment in august. Limitationstatute of and what do we see . It has generally strengthened over the month. It does not mean people were not hurt, but there are offsetting factors. Cases are coming down, incomes are rising. Are rollingey bearish calls. You know that, neil, with no expiring. Neil ok, well, i mean, then people you should not be listening to those people to begin with, right . At the end of the day, you have to make a call on markets, tying the Economic Outlook to some kind of a market perspective, otherwise, you know, you are not creating any value for people. Tom can you imagine neil dutta asking questions in a press conference . Jonathan i would love to see that. I wasnspired up today to ilst joking in the end, but ne is fired up today. Dutta, head of u. S. Economic research, thank you. He called it right, particularly the markets. Neil dutta came on this program, i remember one week of the unemployment trend in early may, and neilit was ugly, came out and said it will get better and get better quickly, and it was so hard to believe him out the time. Tom that is true. I want to make it clear to folks who keep score of not only who is on plan, on target, unbelief, but we really panting to do what theyre doing quarter to quarter. Jonathan coming up, state assembly, u. S. Retail sales, next on bloomberg surveillance. You can go your own way go your own