Is about the two different candidates, two different approaches, stark yesterday with the president fired up in lansing, michigan. And the emotion of mr. Biden georgia, warm springs, which resonates with Franklin Delano roosevelt. I would suggest markets on the move, different than yesterday, yesterday less correlated and today a dramatic correlation. Notice the vix at a strong 36. Francine i think the focus is on these lockdowns, especially in europe, how harsh they could be and what that means for job losses. A lot of the european stocks are at the lowest in five months. We will have extra market checks today. Thats get to first word news with ritika gupta. Ritika President Trump appears resigned to waiting until after the election to get a coronavirus stimulus bill. The president told reporters he will get the best stimulus package you have ever seen. The white house claims nancy pelosi blames nancy pelosi for the delay. Nancy pelosi blames mitch mcconnell. Reluctant tore embrace a larger scale relief bill. President trump is looking for a way to take boaters to take boaters on Energy Issues from joe biden. Fracking is used to get oil and gas out of underground rock formations. The president would require an evaluation of how the process could be expanded. Biden has denied the president s claims that he would ban fracking. The most deaths from coronavirus since april, and Emmanuel Macron is planning new measures to control the spread of the disease. The french government recorded 523 deaths. The number of inpatient number of patients may rise to the peak level of the third wave. Alexson johnson said gorsky was interviewed for the latest episode of the David Rubenstein show. All of us have underestimated dramatic impact of this outbreak. If you would have ask most people eight or nine months ago if you would ever see the kind of impact that we are seeing around the world right now, few would have gotten it right. I think there are lessons to be learned. First and foremost, i think is of Global Public davi health. We dont have Global Public health security, we dont have National Security, economic security. We will not have security as societies. Ritika dont miss David Rubensteins full conversation with Johnson Johnson ceo alex gorsky tonight. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im ritikauntries, gupta. This is bloomberg. Tom thanks so much. To start the hour, lets go through the data very carefully. Equities, bonds, currencies, commodities. Futures deteriorate, 44. Dell futures under 27,000, and the vix at a solid three points, 36. 1 five on the vix. I dont usually do percent on percent, but that is in a pretend that is an 8 move on the vix. The. 80gone in from a. 76 as77 two well. Exchange, the litmus paper of the global system, dollar stronger. Yen resilient here versus euro. Euroyen clearly shows weaker euro finally giving up. Jon ferro has been very good about the resiliency of the europe. Swiss franc really doesnt move all that much. Ive got to come back to the about 3 30 new york time, the turkish lira and the central bank scrambling to protect lira. It is not getting done. Turkish lira crushed rapidly from that eight level come out to 8. 26 lira. It is unraveling. Francine extra long market checks today. Tanya, our producer, who alerted me to the fact that rent was below 39 a barrel. This is really amid a flight in risk assets. Lets start with european stocks. They are dripping to a fivemonth low, and this is because of corona they are dropping to a fivemonth low, theher lockdowns adding to pandemic. This w shipped kind of recovery, what that means for job losses, this w shaped kind of recovery, what that means for job losses. Then assets, the dollar and yen, they are rising. Volatility climbing to the highest level since june, and declining below 39 briefly, now around 40 a barrel amid the flight in risk assets. An extra long market checks throughout the day. Joining us to talk about the markets and about possible lockdown, Geraldine Sundstrom of pimco asset allocation. When you look at the extra lockdowns or extra restrictions in germany, in italy, and france, what does it mean for the kind of recovery that you are expecting, and what does it do to yields . it is very sobering for news it is very sobering news for all of us in europe . It is unclear how the pandemic will affect this winter. In terms of markets, there is some unsettling situation. Pimco had warned that it would it would be up this decade with bumps along the way, means keep higher grade equities ir think you have to really be prudent, and that said, also look a little bit out on the horizon, the different shades of shortterm volatility and the news that we are going to confront, probably a better outlook for 2021. Francine what does it mean for Central Banks . If you look at the trend we are looking at, which is more lockdowns, more economic pain, will the lift come from stimulus , fiscal stimulus, or once again will he be left for Central Banks to do more . Geraldine i think both fiscal and monetary will have to be utilized. If there is more fiscal stimulus to deal with a second wave of pandemic, this also means more issuance for Treasury Bonds and government bonds throughout the world, so there will be a tendency for curves to steepen, and we will have to see if Central Banks step in to keep the situation under control. Other safe havens like gold could benefit. Tom geraldine, i want to congratulate you. Pimco has nailed this vector of lower and lower yields and the sluggishness that is out there. Do you envision a new regime of greater negative yields in europe . Twoyear german beginning to test recent larger negative yields. Do you envision new larger yelich new larger you negative yields . Geraldine it is still possible in that people will run to these assets if things continue this way. This will probably be for a few months, and then things will normalize again. It certainly over the medium term, we dont see that yields will be going up very high, regardless of this is going to take years to be absorbed. And the central bank will have to help with this recovery. So very much so in the shortterm term, yields could go much lower as people seek safe havens. Tom what is there to do with monetary policy, from your position in Portfolio Management and managing real money, what is your wish list for madame lagarde and fiscal stimulus from the major countries . Geraldine well, i think there are two things really. The first is to deal with the drama that is unfolding, and business having to shut and people losing their jobs, having to maintain. Down the line, i think there is something absolutely incredible that is developing in terms of all of these countries. Large fiscal package looking at recoveries, anothern recovery, and country this morning, south korea pledged zero in missions. Zero emissions. Incredibly interesting investments being launched around the world in certain sectors. There is a bright side to this in the mediumterm. For now what we need is central markets andy in governments helping business being shuttered by the pandemic. Ask,ine i was going to how much volatility are you expecting in markets from now until year end . Geraldine it is hard to tell. Year end is always a strange moment for people. This year panned out pretty well. At the end of the day so that we can protect those returns, but i believe that Central Banks are totally on the ball, and will be ready to step in if there are some missed locations. Portfolios, it is certainly what we are doing, because in terms of opportunities could arise as well with the potential lack of liquidity. Francine thank you so much. Geraldine sundstrom of pimco stays with us. Coming up in the next hour, we look at fx with abraham rabaa rahbari. H ebrahim that is 10 00 a. M. In london. The cost changed in europe but not in the u. S. , so it is a bit of a quirky week. This is bloomberg. Tom good morning, everyone. Bloomberg surveillance. London, tomqua in keene in new york. Worser markets that is a sophisticated term . Worser. Geraldine sundstrom of pimco, we have been talking about the dynamics across assets in particular within the fixed income space. I need to understand and this goes back to mr. Gross sitting in the basement of the Pacific Investment management company, putting coupons as his first job with pimco this is a few years ago i want to go back to the idea come as you stagger into 2021, how you clip a coupon or find total return. How do you do it . Geraldine in terms of fixed income, we favor the highend u. S. ,afe haven, like the australia, or canada, which is a high currency bond with a coupon. Probably one place to start. I would say that potentially inflation, treasury could be an attractive fixed income asset in the mediumterm. And then go for highquality credit in the securitized world there are still relatively more attractive yields, but of course we cannot hide the fact that this is getting increasingly complex, and you have to go into parts of the fixed income that are more structured, a little bit less researched or less liquid. Assetaloe tou the european bit how do you locate to the european what do you do with e. U. Banking system . Geraldine with the credit space they are attractive in the sense that the capitalization of the bank is relatively robust. The central bank has shown they have been more willing to have the pain of the negative Interest Rates. And that really would be it. Fromuch interest for now the equity standpoint. Bounce, a point for sure. But a lot of the Profit Growth in the mediumterm will be challenged by protracted low challengedtes and vice in tech digital currencies. Differentiating credit is probably a safe place. If you look for strong Profit Growth, i think some other sectors are more attractive than financial. Askcine i was going to you, how do they actually adapt to these protracted lower for longer Interest Rates . Are we going to see the limit of negative rates . Is that it through at the ecb can do he . Certainly they, can be more operation to try to help with the negative Interest Rate tax that there is now, and the ecb has been moving on this path. And then i think banks have to reinvent themselves a little bit. We are seeing this with a lot of banks in terms of trading activities, ipo, m a, there are lots of things going on and there will continue to be quite a few things. And then they will have to embrace certain things like more digital ways of doing business in terms of Asset Management and other things. So it is about embracing the digitalization of the world, and certain banks are going to be better. Francine is there another industry where you could see value on the credit side . Think we like mortgages and things that have to do with the housing markets. There has been a very resilient ,art of the Credit Sector presumably, and surely because the government has stepped in to protect the income of households. In fact, Savings Rates are relatively high, so we think that this is an area that you can still get good yields, even known agencies as well. This is another area that we like in terms of credit. Tom there is an underlying theory to this. You have been writing about disruption over the summer. There is a disruption in our theory. It was convenient and comfortable, a 60 40, a 60 30 10. Are those rules out the door . Geraldine not entirely, but balancing a portfolio these days are a lot more complicated than they used to be, so you are going to have to use other things. Haven diversify your safe using foreignexchange, using gold among safe government fixed income. You will have to be a lot more specific in the selection of securities and credits, but especially in equities. And be a lot more dynamic while i think a lot more active management is going to be necessary because disruption really creates winners and losers, and finding differentiation is paramount now in portfolios. Especially with the Recovery Program that governments are putting in place, which are green and digital, as there are clear winners and losers coming out of the recovery package. Tom Geraldine Sundstrom with pimco, asset allocation. Reading some really nice essays that you can see all the pimco website. Let me do a data check. Futures 41, dow futures 4. 20. Euro does worse in the Early Morning of america. The vix level now 35. 86. A statistic on Oil West Texas threatening a 37 handle, brent crude under 40 a barrel. The suits and ties they rarely wear suits and ties. They wear suits and ties to the hill. The elite speaking to washington. Growth,urbidge on the thesheer mass monopolistic tendencies. Too early in the morning for fancy words. The monopolistic tendencies of american technology. Stay with us. Futures at 41. This is bloomberg. Ritika this is bloomberg surveillance. Surprise aid they a surprise win by president from their sweet could benefit u. S. Stocks and the dollar. They say a Trump Victory would also hurt asian assets. Joe biden is leading in the polls, but wall street firms have recently cautioned against assuming he will win the election. Drivingcloud demand is microsoft sales. The companys quarterly revenue rose a better than expected 12 due in part to corporate demand to Cloud Computing services to support employees working from home. In sales fort gain microsoft for the quarter. That is the Bloomberg Business flash. Francine a lot going on in the markets today. Partly because we are six days away from the u. S. Election, but really a lot of the focus in europe and the same in asia is on these extra restrictions or lockdowns, that we could see as soon as today in europe. Angela merkel moving to shut bars and restaurants from one month. We could see a similar if not more aggressive stance from Emmanuel Macron in france. European stocks are between 1. 5 are down between 1. 5 and 2 . In terms of risk assets, all declining below 40 a barrel. The vix up. If you look at u. S. Equity volatility, the vix up. Im also looking at the dollar and yen rising. Lawrence culp, with an interesting update. This is bloomberg. Morning. Good morning. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Tom bloomberg surveillance good morning everyone. The earnings calendar. Microsoft doing better than good. Amd showing up. Look at the stock performance. For years, they could not get out of their way. We move forward with the fun and games of technology. It is not alphabet. It is google. It is never going to be alphabet. Shecooks worst nightmare, is not upgraded since iphone 7. She joins us now. Eileen, rip up the script. Will again continue . Will we be fools across technology and feel like we have to upgrade . Eileen i have to defend myself. I have an iphone x. Froml be a ways off getting the 12. We like dopamine hits. These companies are counting on that. New, shiny things. Human nature is working in their favor. Go back to michael in this iconic paper for Credit Suisse years ago on the Network Capabilities and the Way Companies will build out. He was dead on. How monopolistic are they . Room forhe word has interpretation. Do they hold monopoly . Things like search queries, absolutely. Is it possible for others to compete . I dont think so. Twitter,nstagram, google. There is always entry. Be smarter ones continue to forceitive and use m a to innovation. There is always competition. Yes and yes. Biggest Internet Companies today will testify, section 230 that says they need to regulate their own. When will regulators cracked down on massive Tech Companies . Eileen it will take a while. No one knows how to get the balance right. Who is going to moderate the moderators . Who is to say what is bias . There does need to be continued scrutiny and conversation. There needs to be dialogue. Given how much money big tex owes a lobbying, do we ever get anywhere . Techw much money big throws at lobbying, do we ever get anywhere . Is that 2 of what is out there, the cases . Eileen they already do it. One of the outcomes of covid is you realize, if a platform wants to take down information affecting peoples health, it can do that. Maybe they chose not to do that when it was about certain demographics mental health. They need to be pushed to employ it. The question is how far they go and who is the one to judge. We need to keep talking about that. Evidence that all along they could do this if they wanted to. They need to apply it broadly and judiciously. Out of urbana, illinois. Lisarday, the triumph of and amd. Talk about the burgeoning reality of women in engineering in executive positions. Seem to really be able to get it done. How did she tame the beast . I cannot speak about her technique. We really can get it done. Women, ethnic minorities, underrepresented groups are used to working harder to prove themselves than the dominant demographic. It is brilliant we are getting more space and recognition about those efforts. People from all walks of life. Increasing diversity and having greater inclusion in decisionmaking roles is so important because it produces results. Francine given we are working from home, seeing extra restrictions and lockdowns, are there any unicorns in europe or elsewhere you would be looking at tom wait a minute. Francine needs a stock tip. What do you have . [laughter] eileen i am sure i cannot give a tip. We will see the results for the Big Companies coming up this weekend. You spoke about microsoft. Will continue to grow. You will have other players come in, so you wont just have the dominant monopolies. Everyone is working remotely. Everyone needs to work and have access. I would keep looking in that sector. There will be disruption, innovation in newer players because people want choice. I think people will want to communicate with others and do that in better ways with more uptodate devices. Eileen, themend iphone 12 blue seems to be the one selling. No, francine, i have not upgraded. I protest. Francine 12 days in and you have not upgraded . You are losing. Tom late whatever it is. Francine adopter. Tom thank you. My brain is going. [laughter] futures, 47. Dow futures, 43. Istanbul, turkish lira in freefall. Zeta expected to become a hurricane as it crosses the gulf of mexico, picking up steam after hitting the peninsula. It would be the fifth storm to hit louisiana this year. There is warning of lifethreatening storm surge. Coronavirus hospitalizations have risen 10 in the past week in 32 states and washington dc. Dakota, montana and north dakota have the most currently per capita. It is putting a strain on the u. S. Health care system. Is in florida, the campaign counting on the rnc to carry the message. The Trump Campaign is shifting resources to industrial northern states that carried him to victory in 2016. The president has cut 24 million from his National Advertising budget. 170iden has added million. U. S. ,s have targeted the over korea and japan, foreignpolicy policy and National Security issues related to the korean peninsula. Global news, 24 hours a day, on air and on quicktake from bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Futures, 46, the vix at three points, 36. 2. Big move in the market. David westin focus on election. Balance of power, Michael Wolff of aggregate, that is the right person to talk to about the strategy forward for technology as they strategize about politicians in washington. This is bloomberg. Good morning. We have doubled rates revenues for four quarters in a row. Sustainability of revenues is a key factor. We think the Second Quarter experience showed us households and corporate are relatively resilient and governments are in a position to support the economy through uncertainty. Tom the head of Deutsche Bank having a good day. Daniel schaefer did fabulous work over the last 12 hours. If you want to buy six bedrooms, five baths, 26,000 square feet, you have to pony up 11. 3 million. To do that, you have to have a good year in hedge fund or get a bonus or plural boni out of your bank. The only theme that matters in banking in europe today. Who is right . Ubs or Deutsche Bank . Daniel it is a matter of the overall pay. Disparities inhe terms of base salary, particularly among the senior ranks. They wanted to change it and increase. Deutsche bank, we just heard from the cfo, they are saying we really need to be able to reward our top performers, which is. Hat ubs is saying as well this is the crucial thing for both banks. To be able to keep their top talent. I am still trying to get to the bottom of ubs wanting to increase base compensation. What does a banker want . A smaller bonus . If you jump ship, it is not deferred . Tax . More advantageous to what is the difference . In competition with u. S. Banks, it is good for the european banks, from their perspective, it is crucial to higher top performers bonuses, not only to have them on higher salary, because they could be the ones that could be poached by the u. S. Rivals. Despite tom cut to the chase. We need to get the gossip out of the way. Dennis schaefer knows everything. Daniel schaefer knows everything. How much is the inroads of american banks going to be . The question is, how many people will be poached . They have seen bankers being poached by Credit Suisse and other banks within the country recently. There is more competition heating up. Course, that is not what regulators would say. They would say you need to be cautious in terms of how much for people because we want you to preserve capital. Schaefer writing out of frankfurt on this conundrum. We have much more coming up. Lira is justthe 8. 29. Wow. Weaker lira. , their chief executive us. Cer will join this is bloomberg. Tom bloomberg surveillance good morning, london and new york. We digress. Know, the season. The kids need to be cool. The weekend says i cannot feel my face. Always styling in puma. Somebody like the weekend, michael jordan, how big is the celebrity thing for puma . Bjoern having partners relevant for the consumer is important. Musicians, dancers, influencers tong work with is important. Tom what is the strategic effort to take on adidas . Bjoern we dont take on competitors. We try to lead the consumer. If we do that, competition does not matter. I see me in the job of trying to reach the consumer. Francine are you not in the competition of getting the next big thing in design . , alexanderhanna mcqueen. Who is hot . Who is next . Bjoern if i told you, i would be in a competition. [laughter] we have new partnerships announced in the next weeks and months. From the football side, we signed partnerships a couple weeks ago. Big influencers on the soccer side and the lifestyle side. Francine tom cannot wait to get a pair of those kicks. The markets that have done well for, and those that havent. Quicker. Opened much sales are not following. What is going on . Bjoern china was hit by the pandemic earlier. They have a strong recovery, q2. Q3 was weaker from development than many thought. By a high level of discount. You will see China Growing again at a stronger pace in q4. Which ares of asia, dependent on Chinese Tourists are having a tough time, like singapore, tokyo, other markets. Q3. Icans were reliable in consumers buying sneakers. Sentiment has been positive. All european markets in q3 did well. After a pandemic, traffic is down by the consumers buying sneakers and sports apparel. Less people in the store. Those who come, buy more. After two months of opening, it slows down a little, then takes off again. The reality in america, and i believe worldwide, i have seen the kids from asia lineup in new york city buying the shoes, etc. , is the digital shift from stores to amazon and the rest and at the same time this crushing frustration you cannot get the cool pair of shoes you want, how are you going to deal with that in the future . The twofold shift, Digital Retail and also i cannot get the weekends shoes i deserve. Future is a combination of digital and stores. You will not see everything switching to digital. Communication with consumers more digital. The consumer wants to see physically, products. You will see a combination. It is how you combine it in a multichannel approach. Francine we were making a joke. If you are working from home, do you wear shoes or not . What surprised you the most about how people where your products during a pandemic wear your products during a pandemic . Bjoern barefoot is bad. I hope people wear shoes, otherwise the business will be down. People do more individual sports. Walking, hiking, jogging, therefore, you need new shoes. You have seen a big shift in activities like yoga and things at home. That is good for footwear, fitness gear, training year. What has been tough is team sports. Soccer, many restrictions and countries, you are not allowed to practice. People are very interested in sports. People want to do something good for themselves. I am optimistic. Tom my recommendation is sign up all of thailand. Thank you so much. Expected,thing to be when your currency craters, like the lira, you better get out front and start messaging. Mr. Erdogan has had a fractious set of months on politics and economics. Today, we see him speaking in turkey and also a large body of headlines coming out off the turkey inflation report, ahead of the central bank in turkey, instrumental independence we also see the market moving with lira out at a. 28. We will see of mr. Erdogan can move that. With lira out at 8. 28. Storese there are two to 30. Massive rift between france and turkey. This is after turkey failed french products, the french magazine for mocking president erdogan in the front page. Two big stories coming out of turkey. Tom coming up, citigroup, we will touch on Foreign Exchange and a new resurgent dollar. Futures deteriorate, 47. This is bloomberg. Continuedmorning, market uncertainty. Equities weak. Stronger dollar. Yen strengthens. Swiss franc, for the most part, does not. Ubs will cut bonuses. Deutsche bank will lift bonuses motivated. Ff trump visits lansing and says isree weeks in, joey shot. We will get to Kevin Cirilli in a moment. Mr. Erdogan speaking in turkey. The tension of this nato member with france is extraordinary. Francine it is something