Sharp snapback connectivity. It is a phase four package necessary . I think it is. The economy can get by without it until the election. Will bringnistration forward fiscal stimulus plans. I think we can make it to there. It is necessary as long as we get it in the next 12 two quarters, i think the recovery will be ok. In the meantime things are a delay ing, and ongoing negotiations does not help things. I think it hurts confidence and slows down economic momentum and prevents a quicker recovery of the economy. Back and forthd among three parties. The president of the United States, the Senate Republicans come in nancy pelosi. Hard to know where we are going. How big thef packages, there is a sense of whether it needs to be targeted or general. Can we if it does not address broad state assistance . Michael i think getting anything is better than getting nothing, for sure. Even if it were targeted on specific sectors like airline and maybe Small Business, that is better than doing nothing. Obviously as you mentioned there are three parties. The parties have to give. I think moving in all directions is probably the way to get a bill done, which would mean youd need to include something for state and local governments as well. They have been hit hard. The revenue side of states has been hit hard by the pandemic. The more targeted it is i think the less likely it has a chance of passing, although it would be helpful for the economy. I think you have to take all of the boxes to get a bill over the finish line and that is where things are getting stuck. David youre an economist, i will not hold you accountable for the equity markets. If you could square something up with me, most economists say what you said, we need to get more fiscal stimulus, the recovery is slowing down in the United States. As we look the equity markets, they do not seem to reflect that . What equity market see that economists do not see . I am an youre right, economist, not a strategist. My interpretation is the equity market is taking a longer view, and on balance the equity market things we will get stimulus. We may not get it now but we are likely to get it next year. The composition of the stimulus could differ depending on whether it is a Republican Administration or a democratic one. One of the assumptions in the equity market is we will get it. It may, in q2 of next year instead of q4 of next year, but it is likely forthcoming. The second thing i would say is the s p 500 is not necessarily representative of the overall economy. We all know covid hits very Small Business hard, but some of the winners in a covid landscape are the Big Companies that dominate the index. I would not say the equity market is the economy, and i think a particular way in which covid is affected certain parts of the economy and Small Businesses in particular you could get a disagreement between the Economic Data and the equity Market Pricing. David in the president s remarks a few minutes ago he addressed infrastructure and taxes in his second term. Talk about infrastructure. We kept hearing about that his first term. President trump today said that is the democrats fault. How much would that be assistance to the u. S. Economy if we did get a substantial infrastructure bill, whether there is a democrat or republican in the white house . Michael from an economic perspective, in infrastructure plan would be very helpful because it is a direct injection of Government Spending into the economy. It would likely be very large and multiyear in length and anchor the Growth Outlook and reduce uncertainty about the Growth Outlook. It could be catalytic to business spending and business hiring in a way that tax cuts are not. There is a big debate in the last recovery about whether tax cuts went to share buybacks or did they boost Business Investment in hiring. A multiyear infrastructure package could be very important road, andf down the if it were accompanied by the expansion of broadband and the expansion of education, it could live to the potential growth rate of the economy. We do need Emergency Assistance in terms of spending for the pandemic, but over the medium term i think in infrastructure component with something on education would be very helpful for the longrun performance of the u. S. Economy. David infrastructure more valuable than tax cuts, what about the reverse, increased taxes. Again, the president of the United States did, i do not want to say a tap dance, but said of the democrats if they get elected they will raise your taxes. What did that too for the economy if taxes are raised for investments such as infrastructure. Michael the math is the unknown question. Do you seek to pay for all of the spending package with tax cuts or are you saying we may be will pay for 40 of it . It is the netting of the two that would matter. In the short run, revenue raisers may dampen economic activity. There is no question about that. If we are combined with a multi dollar spending package, it would be hard to argue that onnet would be a negative for the economy. Somebody issued their timing about when raising revenue happens. I still think onnet, a democratic proposal that has some higher taxes but also comes along with increased federal spending, on net that is likely to be supportive of the outlook. Economist,lly, as an what you put as your base case for the virus. The virus is one of the biggest economic factors we have. Michael in my view it as the number one thing either administration will have to deal with next year. We have to get control of the covid19 pandemic. Otherwise the economy is going to run on three wheels and not four. Our outlook is we are becoming more optimistic about the likelihood for a vaccine. It does appear a vaccine will be approved by the end of the year and available for widespread distribution in the u. S. Next year. That is earlier than we had thought previously. They were cautiously optimistic on that front. If that does turn out to be the case, it could allow for a faster restoration of lost services. And therefore put the u. S. Economy in front of a tractor recovery. David always great to have you with us. That is michael gapen, chief u. S. Economist of barclays. Time for a check on the markets. Joining us is abigail doolittle. It looks risk off to me. Abigail it certainly does. Earlier stocks were flipping between small gains and losses but now we have more sizable losses. The s p 500 down about. 4 . Moments ago down. 6 . The nasdaq 100 down more. Before getting to what is behind those losses, take a look at where we have the outperformance for the dow transport. The airline higher. Also oil higher. That is some indication there is some hope some type of stimulus will get done. On the other hand, you have Steven Mnuchin talking about the idea getting a deal done before the election could be difficult. The market seem to be taken that poorly. From a granular or stop level perspective, amazon. Com seems to be the big weight, at least on the s p 500, trading near session lows, down 1. 9 from its worst day in a week, this on the second day of its prime day event. Perhaps chatter there is weakness. We do not know that, but when you see the stock selloff sharply on the day, you question that possibility. Finally we started off the earnings season. It is going to the bears. Goldman sachs is trading higher. They put up a big quarter on trading. Bank of america trading was disappointing. We also have wells fargo down even more. Net Interest Income guidance not so inspiring, plus higher as they restructure amid jobs layoffs. These Bank Earnings not coming in the way the bulls would hope, and the market reflecting that with modest declines for the major averages. A bit of a risk off tone to your first point. Doolittlegail reporting on the markets. Coming up later we will have senator ben cardin of maryland on the Amy Coney Barrett confirmation hearing and the quest for fiscal stimulus. This is balance of power on Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. We turned to Mark Crumpton for mark Mark Bloomberg first word news. The Senate Judiciary mark the Senate Judiciary committee is getting one more day to ask questions of Amy Coney Barrett. Tree distant he resisted democratic efforts today judge barrett was asked whether the president has the power to pardon himself. Barrett said she could not express an opinion because the issue may come before the court. She also said the Supreme Court can rule on a law, but it does not have the power to enforce it, even when applied to the president. President trump and joe biden will not debate each other, but they will be answering questions from voters at the same time. The two will hold dueling town hall tomorrow night. Nbc news said it will host an event with the president , taking questions from voters in miami at the same time as an abc news town hall with joe biden in philadelphia. The president refused to take part in a virtual debate while he recovered from the coronavirus. Russia is continuing to see a Record Number of coronavirus cases. Officials reported 14,000 new cases today, the most since the beginning of the pandemic. Russia has the worlds fourthlargest covid19 caseload. Despite a surgeon new cases, russian authorities have dismissed suggestions of a Second National lockdown. The European Union is unveiling new plans to help slow down global warming. They include a strategy to tackle highly polluting methane gas emissions and a plan to renovate millions of all buildings to make them more energyefficient. Alsouropean commission is laying out plans to restrict the use of dangerous chemicals in toys, cosmetics, and other products. To slash Greenhouse Gas emissions to at least 55 percent of what they were in 1990 over the next decade. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. Bloomberg. David . David thank you so much. Judge Amy Coney Barretts in her third and final day of confirmation hearings. We welcome one of those who will ultimately vote on her for Supreme Court justice, senator ben cardin, democrat of maryland. Thank you for joining us. We have had two days, we are in our third day of hearings. Have you seen or heard anything that will change anyones mind . Sen. Cardin quite frankly, i do not think so. The first issue is the hypocrisy of this hearing altogether and this nomination this close to the election and the republicans playing by different rules than the democrats were required under their leadership with president obama and merrick garland. There is the hypocrisy and disappointment in this appointment. Secondly, i think it is quite clear that judge barretts views with regards to the Affordable Care act and the challenges those will present to preexisting conditions, that the democrats are very committed to protecting the Affordable Care act, there is nothing said during this hearing that would alleviate those concerns. David is there any question about her competence or qualifications for the job . Sen. Cardin i do not think we have gotten there. There are some concerns about her views as relates to the Affordable Care act come as relates to a womans right of choice, those issues are clearly areas of concern, but the two hurdles we cannot get over his legitimacy of the appointment considering the rules applied to president obama, and secondly President Trumps stated desire in making this appointment to get rid of the Affordable Care act. He said he would not appoint a justice to the Supreme Court unless they follow these orders. It seems like there is too much concern about the impact a president is trying to have on the court rather than having an independent justice. David i want to turn to Something Else i know is important, the proposed fiscal stimulus that does not seem to be going anywhere right now. Youve been fairly outspoken in terms of state assistance and help to schools in your home state of maryland. Is there any question we need more fiscal stimulus right now in this country . Sen. Cardin we definitely need it. We have needed it for months. When we passed the cares act in march we anticipated covid19 would be over by now and our economy would be back on track. That is not the case. We needed a bill passed. The house did their work in midmay. They have repeated that with a version closer to what the numbers the president wanted. We should have had a second round of covid relief well before now. It is desperately needed for Small Businesses, for state and local government, needed for our schools, needed for homeowners and renters. It should have been done long before now. It is clear to me the president is not interested in this other than the politics of his election, and republicans in the senate, Mitch Mcconnell will not bring up a bill that could do the work. David let me ask you that question. The president yesterday tweeted we should go big or go home when it comes to stimulus. He sent the message he wants to have a big stimulus bill. If the president were to go forward and secretary mnuchin work something out with speaker of the house nancy pelosi, do you believe it could be gotten through the senate with republican senators and the Democratic Senators owning some of the republicans . Sen. Cardin i think it could but Mitch Mcconnell will not let that happen. Mitch mcconnell will not bring a bill to the floor of the senate that could pass without a majority of republicans voting. He does not have the majority of his caucus in regards to what the president is saying. I think the votes are there, but look at hundreds of bills that could have been enacted which mcconnell has not brought to the floor of the United States. It is highly unlikely that scenario will take place. Things youof the know well speaker of the house nancy pelosi has been saying we need this bill to fight the virus itself. You have a position you have taken with marco rubio, saying it is not just the u. S. We should be worried about, we should also be worried about putting the virus around the world. It is global. We cannot stop it at our borders. Sen. Cardin exactly. The covid relief package needs to deal with International Aspects as well as domestic aspects. We have not done our work at home. We need to take care of our needs in america. We need to lead by example, and our example is not one by which the world is saying we should follow. We also have to recognize this is a global pandemic, and until it is controlled globally, we are still at risk in america. We have made it clear we need to include International Aspects to our response to this pandemic. Done, if it is not to be this fiscal stimulus before the election, lets talk about after the election. Do you anticipate there would be a significant stimulus bill whether it is President Biden or President Trump in the lameduck session . Sen. Cardin difficult to make a prediction. I would have thought that by now we wouldve passed the next round of covid relief. It is desperately needed. After the elections i am optimistic. If we do not get it done before the election, we would recognize relief is needed, state and local governments desperately need help. Our School Systems desperately need help. Small businesses desperately need help. The Airline Industry needs help. The list goes on and on. The sooner we get it done, the better. If it is not before the elections, i would hope regardless of the outcome we would get it done in the lameduck session. David do you anticipate this would be a significant issue as voters go to the polls november 3 . Sen. Cardin i think the covid situation is first in their minds. The failure of the Trump Administration to keep them safe , the failure of the Trump Administration to get the pandemic under control, and the failure of the Trump Administration to deal with the consequences of covid19 in additional relief bills will all be on the minds of our voters. David thank you so much. Always a pleasure to have you with us. That is senator ben cardin, democrat of maryland. Still ahead, we will take a look at the big banks reporting q3 earnings. Ons is balance of power Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. The big banks are picking up the spotlight on earnings, but not market leadership. Lets check in with scarlet fu. They have been leading, but the stock market does not like it. Scarlet the stock market is kind of meh on them. It is day two of the big Bank Earnings and we have goldman sachs, bank of america, and wells fargo all reporting. One of the big themes is how volatile markets have led to big gains for their trading desks. Goldman sachs posted a 30 jump in trading powered by fixed income currencies and commodities, revenue surging almost 50 . And citigroupan yesterday reportedly 17 trading gains. We will see how Morgan Stanley stacks up when it reports tomorrow. At bank of america you could see the 4 increase, trading underwhelming. The firm not taking on the same risk as rivals, even though Brian Moynihan said every trading day was profitable for that division. Gains in trading revenue help compensate for the lending business. This leads too setting aside money for potential bad loans. That has become less of an issue in the third quarter. They were extra aggressive in the first half of the year. As a result, more money flows to the bottom line. Wells fargo setting aside around 700 million, compared with 9. 5 billion dollars in the Second Quarter. When you talk about wells fargo, it has its own issues that are separate from provisioning for bad loans. It is legacy issues the other big banks dont. It has a scandal and a Federal Reserve cap on its assets and ends up with 1. 7 billion in charges relating to the scandal. David one thing you did not mention was Wealth Management. When you talk about Wealth Management, i think about Morgan Stanley. They have not absorbed eaton vance. We have any idea of what Wealth Management is doing for Morgan Stanley . Scarlet Wealth Management is an area Morgan Stanley has counted on to provide stability and give it margins and it cannot count on stable results from its trading operations. We expect that to be the case again Going Forward. Goldman sachs has shifted in that direction as well, away from focusing on trading in Investment Banking and looking to shore up its efforts in Wealth Management. This is something that is going to continue to be a theme. We are also looking at gains in trading from Morgan Stanley after it has been a lucrative for the big banks thus far. David Morgan Stanley has done well on equities, typically. Thanks to scarlet fu for that report on markets. Up next will get more on Bank Earnings. Cohen ofalk with rog sullivan and cromwell. Ons is balance of power Bloomberg Television and radio. Hope it doesnt cost too much. I hope my insurance pays for it. Can you tell me how much this will be . [cashier] 67. Sorry. Wait, have you heard about goodrx . Goodrx finds free coupons to help you save up to 80 on your prescriptions. Wow, i had no idea. [announcer] goodrx, stop paying too much for your prescriptions. David this is balance of power on Bloomberg Television. I am david westin. For bloombergs first word news we go to Mark Crumpton. Mark its looking less and less likely there will be a new stimulus relief plan before the election. House Speaker Nancy Pelosi and Senate Majority leader Mitch Mcconnell have dug into their opposing stances on pandemic relief. The treasury secretary Steven Mnuchin heads to the middle east next week which could delay further negotiations between democrats and the white house. Today he says getting a deal before the election will be difficult. Here in new york city, Officials Say they are making progress in curbing coronavirus confection rates in areas of brooklyn and queens where coronavirus cases have been spiking recently. The mayor said there has been some leveling off in the socalled hot zones about that more progress is needed to stop a second wave of covid19. Respond in it will kind to the European Unions sanctions over the poisoning of russian Opposition Leader alexey navalny. He was poisoned with a soviet era nerve agent. Alexey navalny says his poisoning could not have been ordered without president putins involvement. 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. This is bloomberg. David . David the big u. S. Banks have been reporting thirdquarter earnings this week reflecting a generally improving economy but also a wave of Interest Rates approaching zero. For some perspective on the Banking Industry we welcome rodgin cohen senior chairperson at sullivan and cromwell. Give us a sense about what we are seeing in the earnings and what we are seeing in the industry. Banks dont like Interest Rates near zero. As always toasure be here with you. Theink you are seeing consequence of several trends. Zero Interest Rates represent a negative drag on Bank Earnings. Marketsalso seeing which are productive in terms of trading revenue for the largest banks. Disconnecto seeing a between large corporations and Small Businesses and consumers which are struggling and which is really struggling which is where some of the draghi is. Finally, and i think this is not yet been commented on, there has been a lot of notice of the sharp reduction in brink bank provisioning for reserves. To me that is primarily a function of what should have been expected with the introduction which exaggerates in the early stages of a problem and then is restored over time. Measureyou could really this substantial difference in reserves and attribute it to cecil. David im glad you raised cecil. We hear about that when we have jay powell testify in front of congress. A number of congresspeople will say what about cecil . Explain how it works. It basically requires a bank to look out over the course of a loan on what the likely receipts will be. Scarlet what are you rodgin what are your losses over the entire course of the loan rather than your losses which are expected within a relatively short period of time. Accelerateeffect possible losses in the Loan Portfolio and chairman powell has no choice. All the Bank Regulators are obligated to follow that and the decision was made that it should incorporate cecil. David if that means you have to take a hit at the front end of the loan does that mean there may be good news down the road . Like taking a reserve, maybe you dont need the whole reserve. Rodgin absolutely. If we are fortunate enough to have an economic recovery i number ofwill see a cecil reserves established in q1 and q2. Just 20 days away we have an election coming up. We have two very different candidates in joe biden and donald trump. Do we have a sense of how they might differ with respect to Bank Regulations . Rodgin i dont know that we do. I jokingly say that on the list of 100 topics if we had three debates Bank Regulation would not have been in the top 500. Is, i think this is a function far more of the individuals who are at the top in the leadership positions of the key agencies. The Federal Reserve in particular, the vice chairmans term will not end until the end of next year. Inirman powells term ends 2022. You may still have much of the same leadership. Similarly chairman williams at the fdic, her term does not expire for a period of time. David we heard from biden when he was a senator about remarks he made that he is concerned about the unbanked, local regional banks. Do we think that might make a difference if there is an emphasis put on people who are relatively under banked the echo under banked . Rodgin i think if the former Vice President is elected there will be an emphasis and frankly there should be an emphasis on the under banked and unbanked. We talked a lot about Economic Justice and i think correctly so. If you do not have access to the banking system, you are not going to be able to reach your economic potential. There and byocus the industry itself is paramount today. David one thing that could change is the cfpb. The Supreme Court said the president could fire the head of the cfpb. What would that mean for the credit card industry . Joe biden comes from a state heavily invested in the credit card industry, delaware. Rodgin i am not sure and tell you know who will be there. Chairt think the current of the cfpb has been a slacker particularly in respect she has been willing to go after even large institutions. Cards,spect to credit interestingly enough with all of the various Enforcement Actions that have been taken, credit cards have not been a focal by whether it was the Obama Administration or the Trump Administration. I suspect its more that compliance is at a high level, particularly with the major credit card issues. David you mentioned briefly the issue of reserves taken against possible bad loans. I wonder whether that could affect banks with respect to the stimulus bill. There is a large stimulus coming through, could that ease some pressure on some of the debtors in repaying their loans to banks . Rodgin thats a great question and it may. One interesting issue if we do not get a stimulus bill in the next few weeks or months, with the Federal Reserve would reconsider the standards they have established for the large pieces of the cares act that have not been yet fully implemented, main Street Lending in particular has started to use some of that money in a more local way that has been the case today. David it is a pleasure every time you are on. Rodgin cohen from sullivan and cromwell. Our swing state look at florida continues as we welcome democratic congresswoman kathy castor of tampa. This is bloomberg. David this is balance of power on Bloomberg Television. I am david westin. All this week we have been looking at florida as part of our swing states theories leading up to the election. We represent we welcome representative kathy castor, her district contains all of tampa. Give us your view of where florida is in this election and particularly your district in tempo. Its good to be with you. Every day is election day right now. Vote by mail returns are up about 30 , everyone who has a vote by mail ballot has returned it in tampa. That will continue early voting starts next week. You will continue to see folks weighing in and voting prior to election day. We have a very good system of vote by mail. What i am hearing from people and what i think is driving the larger vote by mail returns is the coronavirus. Covid19 we are averaging well over 100 deaths per day here in the state of florida, folks are very concerned that here in the United States we have the highest death rate out of all of the developed countries in the world. Impacted many Small Businesses, especially the leisure and hospitality sector and all of the business is tied to that. Those are the front burner issues right now. Controlling coronavirus and trying to operate your business safely and have schools operate safely as students have gone back or tried to handle instruction at home. You look in your district, is this particularly hitting seniors and their voting . Age isstand the median young in tampa. We hear some reports out of florida in general that seniors may be concerned about this and may be inclined to vote for the former Vice President rather than President Trump. Rep. Castor everyone is concerned. In the Tampa Bay Times today, the largest circulation of all newspapers in the state of florida, i was struck they had a page ofof page after our neighbors here in florida who lost their lives to be coronavirus. They were trending older, but i was struck by folks in their 40s, 50s, they had a synopsis of their life story. Really sad tales. I think everyone has been touched in some way. They know someone or have had a Family Member impacted. The failure to control the coronavirus has led to economic fallout. They have lost their jobs and is thee wondering when United States of america going to get its act together to crush this virus and do the widespread Rapid Testing we need to get this under control. David another issue in this campaign is Energy Policy and you have a leadership role on that. You are the chair of the select committee on climate change. Give us your perspective on what the voters of your District Care about when it comes to energy as you choose between vice President Biden and President Trump. Rep. Castor there could not be a more stark difference when it comes to environmental policy and action on the climate crisis. Here in florida you would think because we are the Sunshine State that we generate a lot of our electricity from solar power, that is not the case. We are still tied to fossil fuels. Folks now understand that clean energy can be less expensive. They have seen costs escalate due to climate impact, whether that is Flood Insurance or property insurance, longer and hotter summers rapidly intensifying hurricanes now, they are costing lives and livelihood. Folks know that clean energy is the future and when donald and his administration rolls back environmental clean air and clean water policy, everything related to climate, takes us out of the International Climate accords, they know thats the wrong course of action and they are looking to joe biden and Kamala Harris who have a very broadbased plan to transition to the Clean Energy Economy and create jobs doing it. I think folks know it can be less expensive but see enormous opportunities to create jobs making ouris wastewater system more resilient or our Transportation System more resilient. Building the macro grid across the country to ramp up. David can we do that without increasing the cost of energy . Rep. Castor i think so. I think after a year of study and congress issuing a report that demonstrates we can make this transition, folks know that clean energy can be a lot less expensive. Here is the fact. Folks used to think it would be expensive. The cost of climate is escalating. Your property insurance, the ac bill a lot of people think the Clean Energy Future will be more expensive than what we are experiencing. David you mentioned how many absentee ballots will be cast in florida. How concerned should we be Election Night that we wont be able to get an accurate count anytime soon . We are all going to be looking at florida. A verystor florida has robust and experienced vote by mail situation. All of the vote by mail ballots prior to election day. That will help ease the flood of ballots. Early in the evening when they tabulate and put up the vote by mail returns you will have a very good idea. There are other states that have different deadlines. Our ballots have to be in by election day or they are not counted. Unless you are a military Service Member only sees. Some states have longer deadlines and those might be the states we wait for. Likenk things are trending the failure of the Trump Administration to control the coronavirus and the economic fallout on Small Business owners. Here in tampa we won the stanley cup this year. The Tampa Bay Rays are likely headed to the world series and folks are quite angry that they cannot get out and celebrate. The impactestimate of the failure to control the coronavirus and the impact to our health on this election. I think thats one reason folks are voting early and in large numbers. Great david great to have you with us, congresswoman kathy castor of florida. This is balance of power on Bloomberg Television. Bloomberg television. David this is balance of power on Bloomberg Television. I am david westin. The New York Post published a revealedernight efforts by hunter biden to use his access to his father to benefit the Ukrainian Energy company on whose board he served. For an early read on what this may and may not mean for the Biden Campaign we welcome a bloomberg political reporter. Its a convoluted story. Its something the Trump Campaign has been on for sometime time including the president ial debate. We sat there while the president tried to hammer joe biden on this very credible question. Now we see this big report out of the New York Post that emails from a laptop recovered at a repair shop in 2019 and seized by the fbi, over 40,000. Delivered to the lawyer of Rudy Giuliani. We have had steve bannon, another former Trump Administration official on the air talking about these and the seriousness. Parcel of and attempt by the Trump Administration to raise this onue and get people to focus joe biden. And to make the case that joe biden lied to the media when he said he did not know anything about his sons business dealings. David we all knew that hunter biden was on the board of this burisma, this Energy Company in ukraine. We all figured that he was there in part because he was the son of the Vice President. That is not surprising. What new did we learn here. That he tried to introduce some official to burisma to his father . He tried to make the introduction while he was on the board and also that joe biden when asked directly whether he knew anything about this that he did not. The veracity of the claim that he has never spoken to his son or about his business dealings i think those are the two big stories. The other thing they are talking about is whether the biden family, joe biden and the family not only lied but potentially violated any regulations and whether they pose a National Security threat because they have financial ties to other governments and companies owned by other governments across the world. To the report,g former mayor of new york Rudy Giuliani had access to this laptop which was dropped off at a repair facility and never picked up. Do we figure that may be campaigns have things stored up we might see over the next 20 days . I think so. This is what we are going to see for the next two to three weeks. We have unencumbered president in a difficult time we have in acumbent president difficult time down in the polls. He wants to change the narrative. Going toup the race is be Something Like this out of both campaigns potentially. Barr report out of the doj did not come to fruition. There has been some suspicious thoughts that we might see something out of the department of justice or the state department which raises the question about joe biden, his truthfulness, whether he has broken regulations, these kinds of things we are seeing in the post. David none of us can predict how this all plays out. Compared to 2016 when we had the revelations about hillary clinton, werent there a lot more undecided at this point in the campaign . At this point a fairly low percentage of voters say they dont know who they will vote for. A low percentage of undecideds. We are in this unprecedented pandemic. The economy is impacted. Eople are looking at him any time he is on the ballot and its a referendum on him he doesnt do well. Thats not just about donald trump. Any incumbent president has to defend their record. Its more difficult to run as an incumbent than a challenger. David do we know that the last debate will happen . I would say yes, but i thought the second one was going to happen. M hopeful i guess we dont know at this point if one or both david fair enough. Thank you to our bloomberg political code tribute her. Balance of power continues on bloomberg radio. Talk with david wilcox, a Peterson Institute fellow. Former head of the fed. Mark i am Mark Crumpton with bloombergs first word news. The Senate Judiciary committee is getting one more day to ask questions of judge Amy Coney Barrett. She has resisted democratic efforts to pin her down on abortion rights, healthcare and the upcoming election. Today she was asked whether the president has the power to pardon himself. Judge barrett says she could not express an opinion because the issue may come before the court. She also says the Supreme Court can rule on a law but it does not have the power to enforce it even when applied to the president. It is looking less likely that there will be a new stimulus relief plan before the election. House Speaker Nancy Pelosi and Mitch Mcconnell have dug into their opposing stances on pandemic relief. Steve mnuchin spoke at the Milken Institute global conference today. At this point, getting something done before the election and executing on that would be difficult given where we are and the level of detail. We are going to try to continue to work through these issues. Mark President Trump tweeted that congress should go big or go home shortly after senator Mitch Mcconnell promised action last week on a bill targeted just to Small Businesses. He said, i dont know why you are always an apologist for republicans. France is bracing for possible curfews as hospitals and intensive care units take in more patients. Emmanuel macron is expected to step up efforts to suppress the need for virus protections among young people. Frances government has already put numerous cities under maximum virus alert closing bars, banning student parties and capping the size of gatherings. The pandemic is hitting Record Numbers in italy. The country reported more than 7300 new cases today, the most since the outbreak began. Hospitalizations are on the rise in regions of italy that were largely spared from the initial outbreak. Last week the Prime Minister reimposed the mandatory use of masks outdoors and this week ,dded new curbs on nightlight social events and amateur sports. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Crumpton. This is bloomberg. It is 1 00 in new york. I am vonnie quinn. Welcome to bloomberg markets. Here the stories we are following. Stocks are falling and traders are reporting results from big banks. A lack of prospects for a lack another stimulus deal. We go through the headlines. ,e speak with arne duncan former education secretary under president obama. His outlook for schools amid the pandemic. Pharma giant suffering setbacks. Dr. Jeremy south joins. Lets get a quick check of the markets. We saw there was a bit of a reversal. Stocks have not been taking a direction and now they are firmly lower, down. 6 . The one that did poorly was wells fargo and it is leading the s p lower. Goldman sachs grinding higher throughout the session. Initial reaction was a minor positive that turned into one point way 5 gain. I want to point to starlink taking back some of its decline, trading at 130. 24. 24 hours to go before the deadline. For what it is worth, not much. As Mark Crumpton mentioned, Steve Mnuchin saying getting a stimulus deal before the election will be difficult. To letsm burns get to sam burns on more with more and how the markets are doing. It is looking unlikely that we will get anything by the election. What about january . Will we get anything before january . Sam my guess is that if nothing happens before the end of the year, we will have to wait for a new congress which pushes back the actual implementation of anything that might be passed in the Second Quarter of next year. I think that is the danger that the stimulus is coming, it just comes later than had originally been anticipated. Vonnie what exactly is this Market Pricing in because it seems like there is some kind of triggerhappy finger on the prospect of stimulus and when it is received, there is the selloff, could this turn into Something Real or are we seeing on the margin trades . Sam the action has been driven by the stimulus headlines. It was like last year when trade war headlines were driving things day today. Now we are waiting for the stimulus to come through. Everyone is assuming that it will. I think that is why stocks are as high as they are. It looks like there was going to be more delay, we could have more choppy trading action. There is no bid underneath on the assumption that earnings will come back next year and the fed is always there to step in if things get rocky in the markets. I think that is why there has been a choppy environment. Have seen in april when the lows happened. Vonnie we have really weak employment data. We will not get a full picture tomorrow because california is still stuck on initial jobless gains data that is old. They have been rehashing their system and so on. What happens to the economy is we do not get more stimulus, if industries are not bailed out and allow people back to work . I have seen and heard a lot of rosy scenarios. What do you see for the economy . Sam i think the economy is quite dependent on stimulus. Of the the lag effects initial stimulus we are still seeing in the data even now. If we do not get sufficient stimulus either later this year or early next year, i think the economy will have another round of weakness. I think the underlying organic growth rate of the economy is still quite weak with a lot of dislocations and things under the surface that we are not seeing at the moment that are still there. Unemployment is still very high. I think there is a lot of things that are waiting for that stimulus to come back. The virus has not gone away and is not going to go away soon. As long as that is affecting the economy, i think you are still going to require Government Support and i think physical action is going to have to take over from the fed fiscal action. The fed is limited in terms of being able to help individuals. Vonnie what have you been researching as we await stimulus and more data on the fundamentals of the economy, what do you turn your attention to in this market . Sam we kind of go below the overall Market Indices and look at sectors and industries to try winnershere some of the and losers are and how to benefit from them in terms of asset location. Ped recoveryat k sha that people have described by the best type of letter for the type of economy that there are some areas that are holding up well and benefiting. A lot more areas that are reflected down and relatively weak. Certainly even within certain areas like growth, we prefer technology over healthcare, for instance. Within the cyclical areas, we prefer consumer discretionary. Within the defense of areas, we prefer Consumer Staples over utilities or real estate. There is probably more granular interest sector and interest style allocation views that are relevant now than sort of the big all long or buy everything that you had from the april lows. Vonnie exactly. Even as we continue to zoom higher, there are definitely individual stocks benefiting more and really just a few of them. Is there room for some of these individual stocks or at this point would you be taking a step back . Sam i think the ones that are less dependent on further stimulus probably have more support than the ones that really rely on further stimulus, consumers coming back to a lot of the hardest hit industries, transportation, travel, entertainment, hospitality, things like that are going to struggle for a while. They are still relatively weak even with the stimulus and six months now from the worst of the lockdowns. I think it is a matter of finding those areas that can benefit whether it is Online Shopping or some of the metals, the Mining Companies that are benefiting from higher metals practice globally for the u. S. Housing market which has been strong. There are other areas that have been strong and it is important to focus on those areas even if the Broader Market is not really make much progress. Vonnie any interest in the banks . Wells fargo has not been doing well. That just makes it cheaper, right . Are there any banks that float your boat these days . Sam i think the banks in general have some benefit from market activity and trading activity has been strong for them. I think the tailwinds they have had are from mortgages or trading markets. The basic spread lending for traditional banks is going to be tougher Going Forward with rates likely to stay around zero for a long time and the like lack of borrowers, a lot of banks are holding more securities than loans than you normally do nowadays. That is because of lack of loan demand and tightened standards. Aboutare not enthusiastic it. I think it is going to be a struggle for them to outperform in the longerterm. Vonnie thanks for joining us today. That is sam burns, mill Street Research chief strategist. A historic downturn. We will talk about what is behind potential moves. This is bloomberg. Vonnie this is bloomberg markets. Time for stock of the hour. We went from the worst performer on the s p 500 to the best. Giant oil producer, Conoco Phillips looking to get bigger and staying home to do it with that performer. Kailey leinz will tell us what it is. There reported looking to buy resources which are stock of the hour. It is the best performer in the s p 500, up more than 12 on these reports. I should say they are just reports. Sources familiar with the matter talking to bloomberg and it has not been confirmed but the sources do say that these talks could fall apart. Nonetheless, conoco had been dropping hints recently about shareholders and bidding the stock up today that is still move lower than 40 on the year. If it did go through, it would be one in a series of recent mergers we have seen in this space. Lot of names under pressure because of the downward spiral of oil prices and demand. That does mean share prices are lower and cheaper to buy that presents an opportunity for larger players. We have already seen w xp energy announcing just a few weeks ago. Injury noble energy. This could be the Largest Energy oil deal of the year. It has an enterprise value of over 13 billion. What would be in it for conoco . This is about poking up in the Permian Basin where the large part of u. S. Shale production happens. Resourceswhere concho gets its revenue. It had been building production yearoveryear. In 2019, that production revenue was up 4. 6 billion. It is expected to come down dramatically this year given the environment. Vonnie lower premiums needed. I also seem to think it is making sense. Kailey that seems to be the consensus at jp morgan, they say it makes strategic and financial sense. Analysts there say it should be a strength merger theory as you say, those premiums are the key focus. Bank of america says while they see the logic, there would have to be low to no premium to work. Our analysts say they dont see this having low to no premium given that concho does not need a lifeline. It is generating free class flow cash flow. They say they are surprised by the timing of these talks. Vonnie investors are certainly willing to place their bets. Thank you, kailey leinz. It is time for your business flash with a look at some of the biggest news stories. Senator Elizabeth Warren going out to disney. She criticized the company for laying off thousands as a result of the pandemic. She says disneys spending on erodess makes rich but its ability to write out downturns. Shares of amc plunging. Is ceo says the company doing everything it can to raise cash to survive the pandemic. He says the chain is not considering bankruptcy at the moment. Bloomberg reported amc was considering options that did include filing for bankruptcy. Yet for fedexest and ups. The socalled christmas treat has pushed the start of the Holiday Shopping season even earlier and that will start the limits of shipping networks already strained by the pandemic. Amazon began promotions yesterday that are estimated to lead to 10 billion worth of sales. And that is your Bloomberg Business flash. In on howd, we check schools are faring across the country as covid cases rise in certain areas. More with former u. S. Secretary next. Cation arne duncan this is bloomberg. This is bloomberg markets. I am vonnie quinn. The check of the markets as we head toward the midpoint of the session. Still in the red for all major indeces. Nasdaq down the most. Buying seems to be making a little wave in the nasdaq. A lot of movement there which we will investigate. Meantime new york city has closed more than 100 schools in hotspots as the virus takes hold again in certain areas in europe, Northern Ireland among places sheltering schools to shuttering schools to prevent the spread. Will the usc more closures is the question. Former secretary of education, arne duncan joins us to discuss. Are the hotspot areas doing the right thing and should more schools be closing right now . It depends on the local context and where we see cases spiking which is not which is in too many communities across the country. Schools that try to open may be in trouble. I think schools have done a fantastic job of staying safe. We have not been seeing big outbursts were schools have opened slowly and carefully. I would say schools are not bubbles. We are seeing cases in communities start to go off the charts. That worries me tremendously. We have to be able to have some sense of going to school already normal setting. A few obviously it takes days by the time you know this is a positive case, that means it is likely that there are other positive cases and perhaps a cluster. How do you deal with that . This i hate that we are in situation and they have to figure this out by themselves. There is a devastating lack of leadership at the federal level. This is a manmade catastrophe. School systems are learning how to become Public Health systems. They are doing testing, contact tracing, they are working hard to figure this out. L. A. Schools, the secondlargest ,istrict is starting to do this a very ambitious and important effort. I was talking to the superintendent yesterday. Testingdren are not positive, a couple of staff have tested positive. They have to step back and have to quarantine. Folks are working so hard at the local level and that is what gives me hope. That is what keeps me going. Vonnie we know the devastating impact this is having on enrollment at the graduate level , let alone below that. Also for kids who do not have internet oreasy fast internet, it is a tremendous burden. To lessl lead productivity in the future, will lead to kids not gaining the potential they could be gaining. Is there anything that can be done immediately before the election, before next year, before anything else happens for these kids . Arne that is a great question. A couple of Different Things have to happen. ,irst of all with this pandemic it has revealed and exacerbated the tremendous divide between the haves and havenots. We talked about a k shaped recovery where folks are doing well and some are sobering struggling. Some children have two parents at home and access to broadband and doing fine. Others are falling further and further behind. A couple of things need to happen. First, access to technology, broadband and the internet as ubiquitous as air and water. The idea of children only learning in a fiscal building physical building does not make sense. They have to be able to learn anytime anywhere and we have to commit at the National Level to doing that. Secondly, we have what is now called a covid slide and now we have the summer slide. Some who have not even come back to school to school year. That is tremendously concerning. We cannot afford to have a lost generation, a lost year of education. Tutoring initiative where we would take those children who are struggling who were more behind before, who maybe have fallen even further behind now, we have to help them catch up. We do not need another research study. High intensive tutoring has been proven to help kids catch up. Those are the two things that we have to do to get our children a chance, not just educationally, but in life. Vonnie you are one of the main people responsible. Im sure parents all over the country are thanking you right now. Talk to this new idea. Is the wayommon app so many young people applying through college. ,e talk about systemic racism we put out statements and that is all fine. I am much more interested in action. They have eliminated on the college application, the question that acts about whether you had a disciplinary issue when you were in high school. That is critically important not stigmatize young people because we know across the country in part due to systemic racism that children of color are much more likely to face discipline, suspensions, expulsions than children who are not from minority communities. It is showing real leadership and eliminating that question and removing one more barrier for children across this country to go on to college and pursue their dreams. Vonnie what is the take up at the moment and what would you like it to be in the few seconds we have left . Arne i want to help every child pursue education beyond high school. For your university, two years at college four year university. Graduating high school is critical, but it is not enough. Our young people have to keep learning beyond high school. Vonnie that is for sure. Thank you very much. Represent black africans a lot better applicants a lot better. Our thanks to the former u. S. Education secretary, arne duncan. Coming up, a mixed bag four earnings but they all highlight the risks of a lack of a stimulus deal. We will discuss the latest. That is next. This is bloomberg. So youre a Small Business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Mark i am Mark Crumpton with bloomberg first word news. President trump and joe biden will not abate each other but they will answer questions from voters at the same time. They will hold town halls tomorrow night. Nbc news as they will host an event with President Trump taking questions from voters in miami. It will come at the same time as an abc news news town hall with joe biden in philadelphia. The president refused to take part in a debate while he recovered from the coronavirus. The worlds richest nations have agreed to renew a Debt Relief Initiative for the poorest countries through the first half of 2021. The world bank had called for the g20 to give a full year extension as the coronavirus pandemic escalates property rates around the globe. International Monetary Fund managing director Kristalina Georgieva spoke with bloombergs Francine Lacqua about the decision. The worries about debt levels going up are not for now. For now, the biggest worry is that we dont do enough to support the economy