Ive got to go to the pandemic and the fold in to our foundations of this coming quarter, our foundations to 2021. Youve got to comment on what the eu saidd yesterday. Jonathan a call for more fiscal stimulus across the continent as well. Christine lagarde pretty clear about what she wants to do in december. The colder it gets, the harder it gets in europe. Cases are going up. More restrictions are coming on. Big question for the United States, whats next the deeper we get into winter . Tom weve gone back and forth this morning with differences of opinion. It is a movable feast. I would say that the one item this item as the president adjusts his plans for what he will do Election Night because of the pandemic. He had plans to go to his hotel. He will not. The rumor is he will stay at the white house. Jonathan according to open what the new york times. According to the new york times. Lisa we will get some earnings from exxon mobil, the thirdquarter earnings. The reason i am interested in this is a variety of reasons. They announced yesterday they would be cutting 15 of their workforce through the end of ofure through the end 2022. I am really curious about that. It 30 a. M. , september personal income and spending data. What it is like billy to show is a decline what it is likely to show is a decline in personal income. Longer can it uphold the Economic Growth . 10 00 a. M. , university of Michigan Sentiment index. To your point earlier about the u. S. Antivirus and the spread, we saw a Record Number of cases overnight in the United States. How much is this going to affect sentiment . How much is this going to affect Business Activity before any lockdowns go into effect . Jonathan that is the unknown. Heres the price action this friday morning. In europe, one of the worst weeks we have seen for the European Equity market going all the way back to march. In the United States, s p 500 futures down 18 points. At about 2 00 a. M. Eastern time, nasdaq futures absolutely plunged, and then they started to come back a little bit. We are seeing a similar story in the fx market. The euro is weaker, now unchanged. One consistent through all of this, even with a rout earlier this morning and the equity market, the treasury market specifically did not move an inch. 82 basis points on the tenure. Tom i am going to say three days ago, we had this equities move, bonds dont. Then we have equities move, bonds move. Now we are back to where we were three days ago. You see it with 0. 82 on the 10 year yield. Jonathan james athey joining us now, aberdeen standard investment asset manager. The action really whippy on this friday morning. James it is frustrating for us, actually, as duration bulls. We thought risky assets were being incredibly complacent across a broad range of factors. We have been thinking about this and trying to piece together some sort of understanding of why that might be the case, but i think the story we have settled on is that this is a position unwind. The market was positioning for fiscal stimulus and a blue sweep. Lets be somewhat clear. That meant being short dollars, long risky assets, and being in Treasury Curve steepness. Have seen is even though yields have gone up, the curve has flattened, and we have seen equities being unwound, and the dollar and the yen rallying. The dollar is definitely one where there have been short positions. With think this looks more just like it clear out of some of those positions, maybe because the virus has got worse, also because of some concerns that the Election Results might be closer and might be contested. Tom futures right now, 18. So you have ownership of equities. You have new money to put to work. You have to have a framework, a view out there. Where is there . 4 . It 2021 or November James ideally, we would like to take the long view. Certainly if you are an equity investor, my equity colleagues look at the quality of the firm, the quality of the balance sheet. They are not making an economic call, and they will definitely be able to look through political events like this because they will be comfortable that the company they are buying is a good company at the right price. That is not the case for all types of investment, and certainly not for all types of investor. So it is a bit more difficult because the prices themselves are going to be a function of the result and what it means for policy going forward. So depending on the type of investor, you will be able to look through this event to a greater degree. We would find it more difficult to completely ignore, so we will be managing our risk levels and exposures accordingly. Lisa and yes, you said it has been a frustrating week for you as a duration bull. What is the hedge here . James i would have said the curve was directional. We have been running bullish duration positions, then we got some long and steepness in the u. S. Our fx positioning has been favorable to the moves this week because we have been positioned long the dollar, the yen, the swiss franc, some of the riskier currencies. Us,as been a good hedge for but going into the event itself, i think the outcome is a lot closer than nate silver, for example, is calling it. I find it difficult to build a portfolio that i think will be truly robust to every possible outcome, so i am going to be happy running some risk, some short duration positions in europe if yields go really high. I think european yields get dragged to some degree. It is not a huge amount, but they will get dragged bit higher. They are still having a bit of a small duration long bias in europe, some defensive positions in fx, but just taking the risk down. Jonathan how well do using this market has priced in the headwinds for the recovery we are seeing develop in europe and elsewhere . I am looking across asset. Crude, the dollar. Ossian topped out around a similar time aussie yen topped out around a similar time. That was two months ago. I would argue this market was pretty ahead of some of these risks. What do you say to that . James broadly speaking, i think weve gone too far, too fast quite some time ago, and it didnt really need the recurrence of a virus spread we have seen. Again, we were just priced in the extreme of the probability distribution. We were priced in a utopian future when earnings would almost instantly recover. Policy was going to be sustainable and effective. Everything was going to be hunkydory, and the uncertainty around that is somewhere close to zero, so that was quite ridiculous Market Pricing. We have seen some pushback against that. To go to your original question, how well is the Market Pricing the outlook, i would still say terribly. Looking at u. S. Equities doesnt give you a good picture for global equities. Opean equities of you have equities as you have described have had a terrible time. They look credibly low comparable to the u. S. Equitiesassets in u. S. Have really not taken account of the probability distribution of how this will play out, but also taken account of the damage that has been done and will continue to be done to economies and business models. Tom i just looked on the bloomberg at a log chart of the value line geometric index, which is an old war horse. It takes out a lot of the emotion, a lot of the dynamics of the movable feast of all of these big cap stocks. It is extremely well contained, and as you said earlier, basically a pullback. How do you know when a bull market ends . How do you know as a fundamental guy . James you actually dont. You know in the rearview mirror. I cant quite remember who, one of the sell side analysts was drawing comparisons to this earnings season in the u. S. With season,000 earnings where you got solid looking earnings, lots of beats versus expectations, and get equity performance across the index basis is absolutely diabolical. Nobody in march or april 2000 was saying that was the top of the nasdaq and it was over. It was only the end of the year when you could look back and go we are kind of done here. Thats the highest weve seen. It takes a long time to get back to those highs when the overvaluation is so extreme. ,o impossible to know especially when you live in a world of justification for extreme valuation just using rather glib narratives which dont stand up to a lot of scrutiny. For a loteen the case of stock valuations in this period. So i think we will only know in the rearview mirror. Jonathan great to catch up, as always. Good to hear from you. Aberdeeney there of standard investment. Nasdaq futures turning around this morning. They were down about 2 at 2 00 a. M. , now off by 0. 9 . Dr. Talk about bit tech and the earnings after close. Apple still off in trading. The weighting into the nasdaq 100 makeups 13 of that index. When apple is not doing well, it is fair to say the nasdaq is not doing well either. Tom we are going to see how that works out. Theres been a lot of sell side reaffirming. Is 1700e line geometric and it is rebalanced daily. Is flat over the last five years. That is the partition of the stock market. Iveshan on big tech, dan joining us shortly, Wedbush Securities analyst. From new york and london this morning, good morning. Alongside tom keene and lisa abramowicz, im jonathan ferro. Your equity market slowly recovering, with the emphasis on slowly, after a brutal week for the equity market longs. This is bloomberg. With the first word news, im ritika gupta. House Speaker Nancy Pelosi and treasury secretary Steven Mnuchin playing the blame game. Each blames the other for the lack of Coronavirus Relief l. Mnuchin accused pelosi of holding up a bill by refusing to offer compromises. Policy says the white house says thee pelosi white house isnt responding to a number of suggestions. Floridan says if goes blue, it is over. Germanys chancellor Angela Merkel says the European Union should have acted sooner to control the coronavirus pandemic. Merkel told eu leaders that political realities stopped them from imposing restrictions earlier. A flareup in infections in europe has forced fresh lockdowns. British Prime MinisterBoris Johnsons government is sticking with his local plan to tackle coronavirus hotspots. Foreign secretary dominic raab says it would be unfair to impose blanket measures when virus rates vary so much across england. They are striving to avoid a national lockdown. Shares of apple are lower today. The companys earnings missed wall street estimates. Plus, sales in china plunged. Ceo tim cook says the new iphone 12 lineup has been well received. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Now it isres. Trump bigger than any gdp weve ever had. You have to go back to the 1950s. Two weeks ago, i would have said i will take 12 . Nobody ever heard of 12 . 33. 1 . Mr. Biden we can build back better with an economy that works well, and do it without raising taxes a single penny on workingclass families. I guarantee you my word as a biden, no one looking less than 400,000 dollars will pay a single penny more in taxes. Not a penny. Jonathan President Trump and Vice President joe biden rallying in tampa with just four days to go until the u. S. Election. Alongside tom keene and lisa abramowicz, im jonathan ferro. This friday morning, the tone of this market just improves a little bit, every passing minute. We are down 19, off by 0. 6 . In europe, things improve a little bit as well. Eurodollar unchanged. Dollaryen the standout overnight. In the bond market, we have talked about this repeatedly, unmoved. The treasury market resilient to everything it seems. 0. 824 on the 10 year. Tom one thing has moved, and that is the real yield. You can look for the jon ferro property this afternoon as well. 0. 001 to 0. 88 , a change to what the real yield is doing. Lets get the politics at hand right now. Kevin cirilli joins us. Are they campaigning for the tuesday voters . After eaglescowboys sunday night, how do they address the people that will actually vote on tuesday versus the male in game . Ame . He mailin g kevin for President Trump, he is going to show up. He is going to be in , in the hometown of democratic president ial nominee joe biden. Biden is heading to wisconsin today. Hillary clinton was criticized for not going to michigan and ofconsin in the final days 2016. Both of the sides are really just trying to push turnout. From the president perspective, gdp number, but he didnt get the vaccine. There was a forecast that we would see a strong gdp number, but they were bullish that we would have vaccinations. We are still about a month and a half away from that. Sunday nighttom biden,ssage does joe does donald trump want to convey during eaglescowboys . Kevin i think it is that audience, i am not sure that a tv ad is going to slip anything. Texas is a battleground state. Pennsylvania, battleground state. The dynamics we have alluded to in texas and pennsylvania specifically, with Energy Policy , refineries closing in the southeastern portion of the with the racial unrest we have seen in the city of brotherly love in philadelphia, where there is a 9 00 p. M. Curfew, so the psychology of the pennsylvanian voter and whether or not they are motivated to show up to the polls is something that i think is a large unknown variable. Nash county, North Carolina is a razor thin margin for President Trump back in 2016. North carolina, a key, crucial battleground state. You look at some of the business fundamentals. Bank of america headquartered in North Carolina. Sevenis, five of the paths to victory the Trump Campaign has outlined in the past month publicly include a North Carolina win, so ive got my eye on North Carolina for a lot of reasons. Lisa we are talking about the polls, about the strategy. I want to know the on the ground effect of the mailin ballots, and what is going to be counted where and when. Which swing states are you looking at to delay the longest, versus those that will be most prompt . Jonathan such a great kevin such a great point. I was reading that Supreme Court ruling yesterday, and talking some of my sources. Another unknown variable is how precisely the dynamics of this will look because of the volatility. Here is what i mean by that. We dont know which state will matter, so to speak, on november 4 or 5. We dont know which patchwork of state regulations in which the ruling will matter. We get into hypotheticals quickly right now, but weve got to be prepared. If you look at a state like North Carolina, where local regulations upheld by the Supreme Court allow for the votes to be counted nine days after, that puts us about 5 00 p. M. Eastern on november 13, which is a week plus out. In this type of media circus environment, so much can happen in a week in american politics, but that is really what we are dealing with, the final vote tallies if there is a ranger if there is a razor thin margin might not come in in battle states until nine days after the vote. Jonathan great to catch up, as always. The numbers are absolutely amazing. More than 18 million americans already voting, 60 of 2016s total. Tom in some of the states, way more than that. What i would emphasize, forget what i think or you think. The pros in this game, that is the first thing they mention every conversation. There is no other topic than the early turnout. Jonathan the one that really stands out for me is texas, votet 95 of the 2016 total done early. It is incredible. Lisa it is incredible. We will see if we see overall massive turn or whether everyone is just mailing it in because they dont want to get sick going to the polls. One thing i find interesting about this election, what joe bidens platform ip. It doesnt seem like anyone is gaming out a second term of President Trump. You wonder how much of a surprise could come if he is up in the polls, if he is up in the Election Results in the immediate aftermath. That could be a massive disruption to market. Jonathan tom keene has given it plenty of thought because tom keene does not believe in these polls, as he has told us repeatedly. No. E a poll, tom says tom i talked to the pros, and they are coming in just like they expected. Lisa i will tell you this. There was a story in the wall street journal about how even the people for trump in 2016 are not saying that they think he is going to win. Even if people say we dont believe the polls, they are still pricing in that joe biden will win. So honestly, that is the conundrum in markets right now. Jonathan big conundrum in this market. After that election, you also have a fed decision and payrolls friday. Next we could get messy pretty quickly. Alongside tom keene and lisa abramowicz, im jonathan ferro. This is bloomberg. Are you frustrated with your weight and health . Its time for aerotrainer, a more effective total body fitness solution. announcer aerotrainers ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time, all while maintaining safe, correct form and allows for over 20 exercises. Do the aerotrainer super crunch. The prestretch works your abs even harder, engaging the entire core. 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