So much for these phrases that we love. Lisa we learned something yesterday. We take that pile of cash and split it into quarters and then you have more money. That is what we learn from our end has left. Apple and tesla. Tom we are doing a lot of strategies,equity fixed income strategies. Futures up, another equity lift to the markets. Lets get right to the morning brief. Lisa we are going to get the manufacturing data for the month of august at 10 00 a. M. Youre getting, u. S. July construction spending. Housing, red hot. We are likely to see more edification of that trend. Look at lumber prices tripling. U. S. August to get wards total vehicle sales. There may be cooling there. What does this mean about how much money people have to spend . Also today, President Trump visiting kenosha, wisconsin against the wishes of some local officials to discuss recent events that have transpired there, the death of one of his supporters, the rioting come of the protests the rioting, the protests to figure out how much he is gaining popularity by hammering home this law and order message versus stirring up potential controversy. Lisa tom very typical of the conventions, where everyone gets a lift week to week and then you get to the fray of it. Cirilli Just Brilliant about 20 minutes ago framing where we are into september as well. Futures, i cannot figure out the number. It is too big on my screen. Is elevated with these worries. On the why of an elevated vix here about an hour ago, slain it to me. Yields are up two basis points. 10 year yield, that is a persistent lift. Lisa you are seeing real yields stay where they are, which is what people are watching when you look at the real story of the day, which is the dollar. The weaker dollar is driving a lot of the action. 1. 20 is an important benchmark. We could do a two hour conversation including the rebuilding program at arsenal. What is the significance of euro at 1. 20 . Butt is just a number, psychologically it is important. It is the average eurodollar level, so it means it is stronger than average. It is also a mark that a number of people like me who have seen areo up soon so fast who worried about positioning breaking 1. 20 gets some of the more nervous people behind it. A phenomenal yield minus rising Inflation Expectations to an ever greater and lower, more negative real yield. Are Inflation Expectations unanchored . They are certainly adjusted to the fed. If inflation is low enough for long enough, it is a danger. They were falling. Fed im surprised by how incessfully fed has been saying we will tolerate and overshoot in inflation. Lots of the japanese would tolerate and overshoot in inflation. The europeans will love and overshoot in inflation. Being willing to tolerate one is one thing. Being willing to engineer it is another. Powell andrd jay bought it hook, line, sinker, and with bells on. Real are you expecting yield to rise not because of rates but because people realize the fed cannot get the inflation they are looking for . Kit at some time. Not today, not tomorrow. Sometime in the next 12 months. Thing that ism going to make inflation go higher, aging baby boomers, the lessening of global labor as a result of globalization, those are multidecade themes that may see a bottom in inflation moving higher over the course of the next 30 years. The next two years are about a combination of shortages of supply in some things, food and some places, but most of all just massive supply of people who would like jobs. That will anchor wage growth and prices and demand. It is hard to fight that. Ritika we are lisa we are seeing the dollar index the weakest since 2018. People expect a weaker dollar even still going forward. Usually this is a positive for mobile growth. It makes it easier for emerging nations to repay their debts. Is this different . Sense, this is better than the alternative. This is a reflection of the fact that, back in march, the Federal Reserve was more aggressive in dealing with the dollar liquidity shortage we were facing during the great financial crisis. Move, andccommodative that is good for growth. Countries affected more by the pandemic, unable to do quantitative or fancy policy to boost fiscal policy in particular, they cannot get growth. Just feeling good about ourselves is not going to get the brazilian economy or peruvian economy or the south african economy moving. They are going to get less behind on growth in this. That is reflected at this point. Has beenlabeler, who dead on on equity performance, just put out a Research Note he talks about a renaissance in u. S. Equities. The market kicks in and all the friends he kicks in as well. Speech. About the powell talk about the effect of the powell speech on the equity markets. Fuel for an equity market to keep going. It means nobody wants to keep their money and cash. People want inflation antection, equities are equity protected asset in the sense that they will go up as nominal profits and earnings go up in the company. People want to buy them. If you are the biggest and best company who can borrow at super rates and do not have a bank that does not want to lend to you, now is the time. If you have stuff you want to do, it is a great environment for the best companies. Tom that is fine. Let me ask you and your decades of wisdom. Is this a bubble . How do you discern a bubble from a genuine lift . Have an enormous amount of price data and go on the sugar rush chief money i do not know. Equity is always a bubble in my world. Tom harsh. Kit this looks mad, but what do i know . Tom you should see how the equity guys talk about juice. Lisa the equity guys will say the dollar is losing its supremacy and the death of the dollar and that is going to be the big drama and that world. What is your take on that . Kit we do this every now and then. You have to member the dollar has the biggest share of global as big a share of Global Foreign Exchange trading as it did in 1919. Its dominance has risen. Afterer dollar comes being extraordinarily strong. Because it has had stronger growth, more physical easing than others, none of these things apply this point of time. It is going to come back to a more normal level, and that is probably a good thing. It is not going to lose. Nothing comes close to challenging this. Off the equity floor today. Kit juckes. You do not even know where the equity floor is. Lisa, among the hilarity, there are some real lessons as well. This cell in may and go away thing, i hate these phrases with a passion. I do not know what the statistics are on this. August is going to be doom and gloom. We had the best august and 30 years. I hope everybody understands that, when you hear people in bowties talk pat phrases that are cute, hold down hold onto your wallet. Lisa what is that around your neck . I do think it is interesting, the divergence between views of whether it is big tex driving this bus or we are seeing a rally. Huge upperwe saw performance from airlines, all the reflation types of recovery of stocks. Hard to say this is a narrow rally. Tom i strongly take your point. I do not have the math in front of me. We will let many others do this. Bank of america would kill this in a sevenpage essay. There is a little more breadth there. There is green on the screen, futures up 11. Dow futures up 15. May never come back. This is bloomberg. Ritika President Trump has just had a man arrested for killing two protesters as acting in selfdefense. He criticize the killing of one of his supporters in portland, oregon. The president travels to kenosha today. Flips the quote no one is safe in joe bidens america. For morgan chase prepares if press you get reelected. The bank estimates a shift of up to 10 points from democrats to republicans if the perception of protests turns from peaceful to violent. The pandemic has created tons of red ink for chicago. Budgety projects a deficit of 2 billion. The coronavirus has decimated chicagos revenue. Mayor Lori Lightfoot warns there could be layoffs of government workers. She calls for more federal aid to cities. Prices spell the inflation rate came in at. 2 . Recent Economic Activity has not managed to upset pandemic impact. Apples most important product is holding up the midst of a recession and pandemic. The company has asked suppliers to build 5 million 5g iphones. Apple anticipates shipment of the next generation devices could hit 80 million in 2020. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Do i look like a radical socialist with a soft spot for rioters . Really . I want a safe america, safed from covid, safe from crime and looting, safed from racially motivated violence, safe from bad cops. Let me be crystal clear. Safed from four more years of donald trump. The conversations of our two candidates, mr. Biden and mr. Trump. Kevin cirilli joins us, our chief washington correspondent. Kenosha is midway between chicago and milwaukee, its own character and a changed character. What will the president try to accomplish today in kenosha . Kevin and remarks last night, the president issued criticisms of the organizers behind the black lives matter movement. Political seeds of doubt in the organizers of that movement and has continued to increase rhetoric around defending Police Officers in this issue. In contrast, joe biden yesterday speaking in a battleground state of pennsylvania and in pittsburgh sought to blame President Trump for sowing the seeds of division as it relates to racial inequality in the u. S. It is an intensified conversation, rhetoric around this issue where you have republicans blaming Democratic Political machines operating in the city for amplifying problems in the United States and democrats blaming the occupant of the white house in terms of amplifying division. You have been in the trenches on this come out in the campaign trail. And order issue, with other issues including the economy and jobs in business, what is the importance of law and order through september . Kit it depends kevin it depends on which constituency. Wall street traders are not looking at racial the stock market has reacted positively over the last several months. If you are looking at main street and small businesses, they are eyeing a fiscal stimulus package that has yet to come out of washington, d. C. If you are looking at the democratic party, it is a different story. They want to see structural change as it relates to inequality. If you are looking at the republican movement, they are looking at things like agriculture, as well as a balance between support for Police Officers. It depends on which social media theater you are looking at to cast your ballot on november 3. Fiscal stimulus seems to have fallen by the wayside. Treasury secretary mnuchin is expecting Senate Majority leader Mitch Mcconnell to potentially come up release another round, another proposal next week on fiscal stimulus. Talks have continued around the clock. They are continuing to try to hammer out a deal. There is nothing new to report in terms of how a part they are on that space. Thinkthey are going to about possibly thinking about possibly proposing something. We will keep you uptodate. In the meantime, j. P. Morgan coming out, saying the market is underpricing the chance of a trump win. What is the latest you are seeing . Kevin nationally, there has not been Much Movement in terms of national polls, which i am skeptical of. If you look at the swing states if you look at states like iowa, michigan, north carolina, north carolina, another important battleground state. Florida. It does appear there is a tightening, the president has found success in terms of reframing issues and arguing that law and order should be discussed. You saw this in terms of rebuttal that biden gave on this issue in pittsburgh. That would appear that they are finding more success in terms of having the parameters of the National Conversation to be more significant around where they are headed. The bottomline is that, as the intensify,nst to there is still one incredible unknown. That is, will there be a second surge and will there be a vaccine that Americans Trust moving forward in the markets . We because a breaking news, have to run, but thank you for terrific coverage. This is really an extraordinary tesla in that highflying is going to look at a 5 billion secondary. But it is not a secondary. It is different. Important, tesla up today and with the announcement of a 5 billion offering, it has not even gone the neath the close of monday. Extraordinary. It is up almost 4 in premarket trading and the question is why. What have they done recently . What news has given them this boost . More thanes are up 1000 in the past 12 months. Giving at the latest boost is the stock flip. We were talking about how youre going to split all your cash and that will give you more money. Essentially, that is what happened. Elon musk became richer than Mark Zuckerberg slitting tesla stock. This raises the question you posed. Evolution at aal time when Retail Investors are getting into the market . Lisa saunders in here at in here52 saunters at about 6 52. Off the march0 bottom. I will have to check that as well. Certainly an explosive price move. More in going to create this market. We will have more on that and on the distribution involving many banks. There are 10, 15 banks. Goldman gets a lead as well. I saw with kevin and it is interesting here for the nation. We at bloomberg always have an interest in the economy and finance investment and such. You really wonder what the issues are going to be as we stagger from september into october in this nation. Lisa how much is the economy going to remain front and center if u. S. Equities keep rallying, even if we see the labor market under pressure . To fuel is this going this feeling that we are going getting a recovery . Out in iowa, for the guardian, it is the economy front and center. He was speaking of agricultural iowa. This is a wonderful guest. One of our Great International economists and truly a great china watcher. Futures pull back a little bit. This is bloomberg. Good morning. And tom keene. Jon ferro is off on sabbatical. Not quite sure where he is, but i think he is in tuscany. Lots going on. We want to remind you of the tesla Equity Distribution. This is not a secondary offering. It is different. The market was nicely elevated and pulls back a little off that. Lisa, i will let you decide where tesla is. Remarkable when you are offering so many shares to the public. Where do you see tesla right now . 3 instill up more than premarket trading after its 500 year, 1000 gain over the past 12 months. The stock keeps going up astronomically on very little news. What have they announced . Tom they are doing the smart thing. They are issuing stock. Stock price is part of the flexibility, this Equity Distribution offering versus public secondary as well. Right now in china, eswar prasad joins us. Puttingfinitive at rigorous economics into our politics of china. Thank you for joining us. To the dollarck trap. How has the dollar trap change with chairman powell and the idea of a persistent, weaker dollar . Strength of the dollar suggests the dollar might be losing ground. Other hand, what chairman powell did in the height of the crisis, countries around the world had credit lines where they could use the u. S. Treasuries as collateral to get dollar funding from the u. S. Certainly the dollar might lose some ground as a payment currency. A reserve currency might be with the dollars position is, stronger than ever. Intowhat are the unknowns the end of the year given this regime of higher yield, negative real yields, and a weaker dollar . What is the unknown, eswar prasad . Ther the concentration of three major currencies is a major issue. The economic rebound we see in other major economies, especially japan and the and actions we see from the other three. Will matter a great deal. Bigconcentration has a effect on every other country in the world. China is a wildcard because chinas economy is doing well. Beenvery has done strong. The economy chinese economy is back on track. Now the chinese economy is moving to this new approach where theyre going to rely less on external demand and more on domestically generated demand. At the same time, china is trying to increase market share in terms of technology, trying to increase technology selfsufficiency. The one thing in china that is a tensions that are going to persist, i think we are seeing more companies beginning to push against the wall and pushed back against its expansionist tendencies. Lisa do you think this makes china more powerful or less powerful given that it continues to show strength in recovery even at this time of dissidents over trade internationally . Eswar china could have used this moment more astutely to pull countries, but there has been a lot of pushback about the covid narrative and what chinas holding back was role and that was. Tried to argue they are the big protectors of the global canonic system as it stands, including the wto and multilateral trade system. Has had a modest relief in the context of full economies, especially those in africa, but the world is not quite buying that anything you get from china does come with strings attached, either economic or political. I do not think they use this moment as well as they could have given that the economy is doing well. This is pretty abstract. If you have a teenager, they are probably hooked to their tiktok account and doing different dances. Tom does them in the brakes. I am wondering your perspective on the sale of tiktok in the u. S. Is order in order to keep it operating. Do you think this gives china more leverage against the u. S. . How do you read this in terms of chinese trade policy . Tom the u. S. Eswar the u. S. And china view this as the new battleground. The u. S. Is concerned about what is practically an existential issue in the one area in which it has a significant advantage over china. There are National Security concerns at play. China wants to increase its market share in terms of the Technology Industry and selfsufficiency. What you are seeing with tiktok we are going to see with other Technology Companies when these countries start using this as pawns in this broader game. I think we will see escalating tensions. There will be no easy way out. Many companies will get caught up in this maelstrom. Love your perspective on this. I looked at tiktok for 18 minutes and noticed no one was doing differential equations. What i want to know is what is the National Risk of tiktok . Is an open question. The Trump Administration would like us to believe that tiktok provides a way to gather up our teenagers minds. Tom are you serious . Eswar but also the notion is they might find a way to americans a way to American Mobile phones and use that as a conduit to soak up a lot of information. Whether this is a Security Risk is far from obvious, but that is the concern at play. Tom i understand it is a concern, but you are the most connected guy we know on this. Is there any evidence that this could port over from what lisa watches 15 hours a day to a National Security risk . There is one lisa loves. We are watching tiktok on tv. You are glad you are listening on radio. This is a National Risk . Fair point. Is a i think this is being used as the bogeyman for a broader set of concerns about china. Americas at disposal. The issue is not about tiktok, not about social media but about technology the technology frontier. Both companies are going to use every available tool to push back against the other. I am less concerned about tiktok that perhaps about Communications Equipment which could come insecurity holds. The u. S. Is not holding back. The Trump Administration want to serve the message send the message that tiktok is an easy target right now. I am not watching silly roosters, tom. I am watching renegade to get that dance right because my son call me i did it wrong. You said something important, the idea that there will be other Companies Used as pawns in this battle between the u. S. And china for tech supremacy. What companies do you expect could be brought into this in the near future . Eswar there are a lot of communications companies, companies such as alibaba and we chat wechat. They are beginning to make inroads in other countries. We are going to see a significant set of tensions between countries because there is an existential issue. What the u. S. Does well is provide hightechnology boosts. It innovates and provides good financial services. These are the areas were china is hoping to gain market share around the world. A broadoing to see Scale Companies no matter what happens in the u. S. Tom thank you so much. Eswar prasad of cornell and brookings. Im going to go back to the tesla transaction, 5 billion. Everybody is going beginning , the partitions of a secondary Public Offering versus what is called an Equity Distribution program. It reallyss harkens back to tesla true it really harkens back to teslas true legitimacy on the street and that it could not trot out a secondary offering so the resort is selling shares under their control, literally privately off the. Desks of different banks off the desks of different banks. Lisa you nailed it. This is a stock that pits pros against robinhooders. Even as analysts continue to say we do not get it. It is a hoax stock. Tom you nail it in the sense that this is the distinction between what the banks traditionally have done versus, as lisa mentioned, the stuff we saw with hertz. Lisa, i have never seen anything 400 , 500 . Up lets ignore the conventional Equity Distribution process and do something original. Lisa when you talk about hertz, after it fired filed for bankruptcy, it thought, people are buying our stock lets sell more. Analogoushat this is to that because they are going directly to Retail Investors and saying, why not buy more . Tom it is still up for the day as well. Futures are up, green, green, green, maybe of the off the tesla news. The dollar, weaker. Stay with us. A simulcast, Bloomberg Radio and bloomberg television. Ritika President Trump heads to kenosha. Suggested a man arrested for killing two protesters in kenosha may have acted in selfdefense. At the same time, he criticize the killing of one of his own supporters in portland, oregon over the weekend. Joe biden accuse the president of fomenting violence and march the president s Convention Speech that portrayed him as a socialist who is soft on crime. Mark zuckerberg is investing in election infrastructure according to political website axios. The money is going to centers that promote safe and reliable voting. It is important for countries and states to have the resources they need to handle unprecedented conditions. And chinatween india points to longterm conflict. India says it should be able to stop a push by Chinese Forces to claim more ground over the weekend. Those countries have moved thousands of troops to the region along with tanks and fighter jets. Largestorted the second sale surge among the nasdaq 100 companies. Revenue was well above estimates. It is a sign that consumers keep flocking to zoom in large numbers. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Ultimately, landlords are going to have to lower their asking price. I think there is not enough that higho support rent ask. I think youre going to see falling rent prices. Good morning. Lefterro rumored to have tuscany. We expect his arrival sometime before christmas. There is a lot going on. We have teslas story developing, really interesting transaction of tesla. Right now, we want to look at the real estate dynamics, the Business Dynamics and the sheer miracle that is the empire response to the crisis of march. The Lieutenant Governor joins us now. She was great in the heat of the moment in march and april, clear and concise of what the plan was here and they went out and executed the plan. Know the of you who statistics, the results are remarkable. Lieutenant governor, thank you for joining us this morning. This is the question i get 24 7. When did the restaurants open . When do we take the risk . Do offices came back come back . When do we take the risk, given these wonderful statistics, of getting ourselves back to some form of normal . Tom and lisa, for having me on the show. The answer is we want to get back to full Economic Activity in the state of new york as well. We are suffering as well because we are not seeing revenue come in. We have a dramatic shortfall because of this. Well is a reason, a very thought out, compelling reason on why we went from having the highest in the country to know among the lowest. 24 consecutive days, less than 1 infection rate. People will say, why arent we back to normal . Here is what we are facing. This is going on in real time. Schools are starting to open. We will have thousands and thousands of students leave the security of home and go into places where they are congregating with other students and teachers. We have colleges returning, thousands of students coming from all over the country. To quarantinesed before they go to a new york campus. We do not know if that is happening. As well as now seeing an increase in sections of places like europe, which is where it came from in the first place, so we have this perfect storm brewing. We could end up having to shut down everything that we reopened. As we are that idea all waiting for a vaccine as well, but the only alternative than, and lisa and i observed this in manhattan, and you are living it in the complaints and stresses of government, and that is people are flat on their backs. The stimulus you need from washington, give us the immediacy of that. How critical is that and what size do you believe you need . The governor just contacted , ourtate representatives federal representatives who represent the state and said we need 59 billion dollars now. The reason we need that is because we also have to give money to schools so they have resources to make the environment safer, to give parents enough protection in place before they send their most precious treasure off to school. We needed for schools. Responders,or first childcare, health care. If they do not do this, this is going to be cataclysmic. Our state cannot sustain this loss of revenue without having the federal government do what they are supposed to do. It was not a new york state pandemic. It was a national phenomenon. We are not going to stop pounding on that. You have a responsibility. It is once every 100 years. Step up and do your job, to the republicans and president. Trash is not getting picked up as frequently. There are rats all over the place. Crime is taking up. People are leaving new york city. Is it too late . Is the tax base getting destroyed for future revenues of the region . We are going to be in for some tough times. The governor has been honest and painting the picture of what lies ahead. We are anxious to get the economy going again. The majority of activity is up and running. It is not to the same scale and needs to be, but we are in the middle of a pandemic. No one has declared victory over the coronavirus. It is going on longer than anyone wanted or hoped to. Andmodel happened in 1818 1819. It goes until 1919. That is what we are facing. We are not through this yet, but we cannot have restaurants open and say you are back to work. Set up your childcare. Figure it out. And then two weeks later the infection rate comes up and we shut it down again. We think that is more disruptive, which is why we are taking the cautious approach but still understanding this is causing harm and pain to our beloved city and state. This is painful for all of us. Facing a lot of the same issues and governor murphy proposed taxing highfrequency trading of stocks in that state. Is new york considering something similar . The governor is not talking about increasing taxes at this time. Understandng hard to i washington understand we need their assistance now to manage this going forward. That is not with the governor is speaking about at this time. We want to make sure we do not drive people from the state. Bloomberg with an article out on that right now. How are you going to not drive people from the state and not get help with the trump tax law . New jersey is getting pounded. How do you avoid the angst of new jersey . This as i will say audacious as any new yorker or and there is only one new york. The tristate region is important to our economy. Want to bee still there. People want to come to the city. We are having tough times, but this could affect real estate prices. It could make it more affordable in some respects. There are a lot of young people who are smart and creative and understands technology, that we are the number two tech region in the country. We surpassed boston a couple years ago. We are not giving up that mantle. We are still the place people want to congregate. There are opportunities for people now to be able to afford to live in new york. Jetsbills, september 13. Who is going to win . Question. Ask me any i am a bills fan. Tom i am shocked to hear that. Governore lieutenant of the empire state. Lisa, a guy named mohammed emails in. Lisa good thing you are asking the important questions. That is the key question. Tom that is what we do on our simulcast on Bloomberg Radio and bloomberg television. We are watching the tesla transaction. This is fascinating, what they are doing to raise 5 billion. Also coming up, gabriela santos. Stay with us. It is not a boring september 1. This is bloomberg. There is a certain logic in the market is doing better than the economy. Very concerned that the fiscal policy right now. This dollar weakness is a growing concern were Foreign Investors are not doing as well on their dollar investments. Fear of instability does not seem to be in the cards. This is bloomberg surveillance with tom keene jonathan ferro, and lisa abramowicz. Simulcast on Bloomberg Radio and bloomberg television. It is going to be