Bloomberg television. We welcome all of you. Lisa abramowicz and i in new york and mr. Ferro in london. Jobs report tomorrow. We are going to do a spacex launch supposedly in 45 minutes. You know what i need from you . I missed you so much. I need a tots update. They are dealing at tottenham, no question about it come with what is going on. Have they finally lifted themselves into the final four . The big clubs, but weve experiment within the United Kingdom is having the fans back, just a few, and trying to work out what capacity we can push that story. Maybe as the League Starts again in the next couple of weeks, hopefully we can build on it through the season. Tom i will say this, and im not kidding, nobody has done it better thans the premier league. The jobs report is a grim number. Jonathan and it speaks to the economic pain. Perspective really matters, and that is what i got to weeks off. You saw more layoffs coming from cardirlines, some Credit Companies putting limits on Consumer Credit card. That is the reality for a lot of people. It is not just the fear of losing your job right now. It is the fear of getting sick as well. Its two pressures piling on top of the average american, the average consumer around the world, and the bubble we are in right now talking about financial markets, not any people have got skin in that game. They dont feel those record highs. They feel the threat of losing their jobs. They feel the threat, the risk of getting ill, and that is what has dominated the psychology of americans and people worldwide for the last six months. Tom just through august, it has been extraordinary. As we look at these and what we will see within our economics, finance and investment come we cant forget the tensions we see in portland and kenosha, where the Vice President visits today. Jonathan theres been lisa theres been some incredible dissidents between the two markets, the idea that the stock market is not the economy. See the souring of the labor market, the rising of tensions of politically, socially, etc. Some people can say maybe stocks are getting rational. Maybe they are living at the maybe they are looking at the actual reality on the ground. But if you take a look, youre seeing the nasdaq underperformed. You are seeing a reflation trade taking hold. You are seeing the high flyers selloff, whereas others are actually seeing gains. Yes, jon ferro . Jonathan 0. 4 on s p 500. Is at least it is not to the mood. Tesla is the perfect example. Who knew it could fall . It fell yesterday. Is this sort of rationality coming back to markets . Unclear. Jonathan i need to see a little bit more than that, dont you, tom . Lisa, i take your point. I think we are finding many ways of justifying the unjustifiable. When stock splits start to become bullish and people are comfortable with that idea because they believe other people will do that, that is when things have got absolutely crazy. The and just important, anticipation of further stock splits. What i would note off the bloomberg datastream xy printing is the d strong. It weak dollar certitude has drifted away in the last number of days. Jonathan lets have a look at it. For listeners sound radio listeners on radio, viewers on tv, we are down 0. 4 . But im with you, right now foreignexchange, eurodollar 1. 18. The last 24 hours has been really important. We know with the line in the sand is for the ecb. It is 1. 20 area but heres the question for the euro balls and why they still feel comfortable because they dont know how the ecb follows it up. What is the one thing you need to have a credible threat of doing some to follow through . Now,he euro bulls right they think this is just indie words and nothing to follow it up with just empty words and nothing to follow it up with. Tom Michael Mckee join us. Right now, seema shah with principal global investors, their chief strategist, with a real focus on the equity market. Writing this morning from principal global, thinking about this market, what is a key distinction of the equity markets . Seema thanks for having me on. This equity market is still writing really high. It has been driven by a couple of factors. There are some things that do concern me about it. Your emphasis on the vaccine, we know in the news that november is a likely date, but the question is how effective is a vaccine going to be, and how much are people going to really adapt . If it is as good as we are expecting, that can really follow away from the market, and we are looking at potential disappointment, which could be very dangerous for investors looking out here. Lisa what does dangerous me . How big of a fall are we talking . What when we look back to has the rally being driven by before the vaccine, it is driven by stimulus given by the release of pentup demand. Now people want to feel like they are comfortable going out. I think one of the reasons we are seeing cyclical stocks perform the best here is the hope that people can go about their normal business. If we dont have that, than the rally we are expected for q4 starts to fall away, and as we , we are looking for potential falls at that point. Lisa people back in early august were saying if we dont get additional fiscal support, we are going to see a reality check in markets. It is september 3. There is no fiscal support on the docket. It is unclear whether they will even have one to think about next week. Why are equity markets not responding . Oura it is something that clients keep asking us. We have Economic Data which has the taurus on the upside. Economy has been stronger than anticipated. Underestimated how much human natures want to go back to normal. So we can go completely back to normal if we have that vaccine, but the economic truck every i cannot recovery has to be tremendous. Publicly traded corporations cut 1 , 2 , even for percent of people, what does that do down the income statement 12 months out . Issue ise unemployment so significant, and we keep hearing news in london of big making redundancies. I think it is less important than maybe it was, but to me this is really what is going to sustain the recovery Going Forward if we have that fiscal stimulus package. Those that are facing the risk of job losses will struggle, and there will be impact down the line. Jonathan do you ever think you can make a decision if you had enough money to own a company like apple or the whole ftse 100 and have 500 billion to spare . Did you ever anticipate a situation like that . Seema i dont think anyone could have foreseen the movement that weve had. At the same time, the trend in big tech is not new. The trend has been magnified. We have some Genuine Police in the strengthen big tech and the ability it could continue to perform well to produce good results. But i just dont think housing the vaccine scenario being sent narrow, until we get that, we just dont have a sufficiently small recovery to keep going without confidence. Jonathan get to catch up as always. Seema shah, principal global investors. The market cap of apple, 2. 47 trillion u. S. The market cap for the ftse 100 and sterling, 1. 63 trillion. Just think about that. Have a little think about that. Thats where we got right now and 2020, that you can have a. Igger company tom on madison avenue, theres a bunch of fancy stores. Most of them are empty. Some of them have a few people in the, with the emphasis on the word few. Theres a line of in front of the door with people waiting to do it in. It is a massive guesstimate, i rising revenue. Jonathan i dont think we will ever see anything like it ever again i economy that was essentially shut down and to see that handful of Companies Still meant money, that is why they are where they are. I get that. But the story for me is just the concentration, and as you well know, the concentration, the crowd in just a handful of days. Tom the story for me is iphones are breaking at home in anticipation of 5g yet last night, you got the little cheaper one, that build broke. Jonathan how have you dealt with this, lisa, for the last several weeks alone . Say, if hes still on the phone, he can phone tom and say you need to walk me. Jonathan what has he done to you, honestly . [laughter] good morning to you while. From new york, from london, good afternoon. Down 16 on the s p 500, 0. 4 . You consents a reality check lisa can sense a reality check in you. This is bloomberg. Ritika the cdc has told states a Coronavirus Vaccine could be ready by november 1. That is two days before the president ial election, and it is an aggressive goal that would tested andhopping, reviewed then. The polls show joe biden leading President Trump in three swing states the president won four years ago. According to cnn, biden has the edge in wisconsin, North Carolina, and georgia. Secretary of state mike pompeo has imposed a new limits on chinese diplomats in the u. S. The curve has to do with visits to college campuses, meeting h local officials and the curb has to do with visits to college campuses, meeting with labelle officials and more. The chinese are building up their domestic chip industry over the next up years. The Chinese Government is putting the same kind of priority on the effort that it came to building its atomic tip autonomousits capability. 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. Ridicule group im ritika gupta. This is bloomberg. [inaudible] [applause] im seeing the entrylevel jobs go away, those lower rate jobs lower wage jobs go away. That is a potential avenue for permanent structural scarring on the economy. Jonathan 13 minutes away from initial jobless claims in america, 24 hours after that the payrolls report in the United States of america. Heres your price action this thursday morning. Equity futures declining on s p 500, down 0. 5 . Market, 0. 65 is your yield on the u. S. Tenyear. Big turnaround in the last week or so. Eurodollar took a little peek at 1. 20 and got a slap from the chief economist at the ecb. Some Dollar Strength against the bulk of g10 this morning. Eurodollar coming in 0. 3 . We talk a lot about a handful of companies doing fantastically well through 2020. The airlines have bounced back a little bit. American airlines is still down 54 year to date. It is still a struggle. Tom and you see it as an immediate struggle as they adapt to changes in government funding as well. Talking steve sadove about retail coming back slowly. Syth totally agrees. She joins us this morning, head of Equity Research at raymond james. I am going to start with southwest airlines. Theres always been an affiliation there with raymond james. Rame the enthusiasm you have savanthi they are wellpositioned. Thees no mincing words, Aviation Industry is very badly hurt this pandemic, like any other downturn we have seen. There is just a lack of demand here, but there are airlines better positioned to be able to survive and come out of this stronger, and southwest is one of them. They are in a universe of their own when it comes to finance and liquidity, and they are able to do unsecured financing at very low rates, even in this kind of a downturn. They are in this position because they have more leisure, and more specifically domestic exposure than some of their biggest competitors. They are seeing the pain is much as everyone else, so they will be able to come out of this faster and stronger. Lisa tom, you have a way with words. Talk about the enthusiasm you have for love. I will ask you about that. Insulateds southwest from some of the broader crosscurrents because of a business travel, the idea that that may not come back, and that has supported the biggest, most established airlines . Savanthi i think southwest drives about 40 of their revenue from business travelers, as opposed to maybe american, delta and united come of that dry 50 . Southwest doesnt have as much premium fares, so they rely on the business passenger as well. They are a leisure, lowcost airline, so they should be able to bounce back faster than their competitors, and international is going to take a while as well. , lovet is all relative down 30 ish. Jonathan the transatlantic route, that is the problem. What can we do to get that corridor for these big transatlantic Global Airlines reopen again between new york and london so we can get things going, get things moving . Savanthi obviously a therapeutic or vaccine would be the best in general, but there is progress being made on the testing front, where if we can get enough testing capacity, especially Rapid Testing capacity, we might be able to get countries comfortable with opening up borders and reducing quarantine times. If you do testing within five days of the quarantine and it comes out negative, maybe the countries can get comfortable with people coming out, and that wont be as much of a negative impact for travel. I think that is the best alternative in the near term, until we get a vaccine or a therapeutic. Jonathan and you think that in some caribbean islands, you get the test before you go, they test you before you arrive. I havent done it, lisa. Just thinking about doing it. The Economic Data seven or eight minutes away. Michael mckee dropping by to give you a little preview of what to expect for that. Great to catch up with you, sir. What is the focus . Michael whats important for this week, everybody keeping a very close eye on jobless claims. But the number we are going to get, the headline number is not going to be comparable with previous headline numbers because the Labor Department has changed the way they do seasonal adjustment. I think we have a chart that shows this. It takes into account the idea that there are months that are extremely lumpy. You can see the big spikes where retail employees are let go after christmas time, and you can see another spike in july that accounts for the closing of auto plants while they retool. You can see the blue line takes that out. That is seasonably adjusted. The seasonable adjustment was based on a percentage of the number of nonseasonably adjusted claims. Now it is going to be just a number added in, so we will probably get a significantly lower number than we had last week, but it wont be meaningful. We will take a look at the nonadjusted numbers first. Tom for those of you looking at that chart, all i can say is it my tuition payments that goes through the school. Why did they do this . The numbers seem to be good. What is the so what of making this change . Michael i used to that chart until the beginning of march because after that, once we got into the middle of march, we saw this gigantic spike, and it is going to be a much bigger number than it otherwise would be, so what they didnt want to do is have the seasonal distorted from here on out. Theyre going to try to give them try to keep the much lower than what they would be because eventually this is going to fade. Jonathan we were talking about the prospect of a negative print. What happened months ago, and what does it mean for the process tomorrow . Michael claims bounced back up again, so people are thinking that could influence the possibility of a negative rent for friday, although that has generally come out of the market with other statistics we have seen since. Theres a feeling that we are go to get a positive gain, but slower than it had been there are still some numbers to come. We will talk about them later on the show, the ism numbers, the employment number for manufacturing was still bad even though the headline number was up, mostly with the nonmanufacturing services numbers. Of course, we had the disappointing adp number yesterday. Jonathan weve got about 30 seconds left. Do you want to promo that other show that comes up in about 35 minute . Michael its the open, one of the best shows on bloomberg. Tom it is. [laughter] jonathan thank you, mike. Looking forward to it. Tom is not jealous at all. We will see you in just a moment, sir. The estimated claims for america , 950,000 from the previous week. Coming up next, Michael Mckee will break down the numbers, and more with Michael Cloherty of ubs. This is bloomberg surveillance. Jonathan seconds away from jobless claims in america. ,ive on bloomberg tv and radio this is bloomberg surveillance. Alongside tom keene and lisa abramowicz, im jonathan ferro. 4 on the s p 500. The Economic Data dropping. Here is Michael Mckee. Michael we are just getting the numbers for the last week in terms of jobless claims. Train your mind to think of this differently. We will look at the nonseasonally adjusted claims. That is up by52, about 8000 over the past week. The seasonally adjusted claims fall to 881,000 to 1,011,000, but remember they change the seasonal adjusted factors so those two weeks are not comparable. ,he number you want to look at 833,352, we did see more jobless claims filed last week. Pandemic assistance for ,reelancers and selfemployed 607,000 that is up from. A big jump in that number. That is not particularly good news. Total people receiving benefits, this is not good news. This is the week the job survey was taken. The total number of people receiving benefits, 29 million, almost 2 million from the prior week. In the week we took the job survey for august, we saw 2 million increase in the number of people getting jobless benefits. One other quick number, the trade balance much worse than forecast. It was expected to come in at 58 alien, it comes in at 63. 8 billion. This is for the month of july. This is a definite drag on the thirdquarter growth figures and it also suggests there may be waything hidden about the the rest of the world is growing. Jonathan i know tom will want to talk about the trade number. Forgive me for jumping forward 24 hours to the payrolls report. What has the relationship been like between claims and the payrolls report every single month . Michael they are two Different Things because claims talk about people losing jobs, whereas the other number is the residuals of people who get jobs. In a qualitative sense, it does give you an idea of where we might be going. The idea that the week we had the job survey, we had a bad claims number is going to weigh on people and their forecast for hiring overall. Tom i looked at the trade balance, i am so glad you brought it up, that is what we expect from our best. This trade deficit is absolutely stunning. This is the back end of the gdp equation. Talki hear peter hooper about a q1 recession with no stimulus, this number back to 2006, 2007,2005, this is a grim statistic for everyone, including President Trump. Michael it is particularly grim for President Trump. What we have seen so far since he took office is the trade deficit with china has widened rather than narrowed, that was his whole goal. We will see as we get the numbers in, if that continues. The problem is all of these numbers are released on the internet and it takes a while to get them loaded. Lisa we have any sense of what the imbalance is. It is a lack of exports or imports and it does matter . Michael i am looking at the trade numbers. Billion and2. 6 imports up 22. 7 billion. In this case our imports exceeded exports by a significant amount. Both the fact that it is we are importing a lot more than we are exporting. Tom Michael Mckee, thank you so much. Greatly appreciated. Someone wonderful time the pieces together is Michael Cloherty. For decades he has been looking at the fixed income market. We are thrilled he could be with us from ubs today. You some together the stagger to the jobs report tomorrow . Michael in general the jobs report data has been a little brighter than we have been anticipating. To seeid, we are likely the Unemployment Rate dropped below 10 , still awfully close to 10 . We are still a long way from normalcy. Markets continue to trade much more prospects for vaccines than any labor market or other Economic Data. Been bright news but starting from a grim place. Tom you are legendary for writing detailed notes about core fixed income principles. Help us square with where the nominal yield is right now minus burgeoning Inflation Expectations over to the focus on the residual, the real yield, the real yield. Which of those are you focused on . Income right now fixed seems priced for perfection from the fed. We look at Inflation Expectations creeping higher, we are still below their target, 1. 75 one point 25 , where we were before the virus hit. We have seen real yields fall below 1 . We are about 108 basis points. What that is telling you is markets are expecting the fed to be reasonably successful in getting inflation back up, but markets assigned virtually no risk there is any possible overshoot in inflation. You have to go back to the tight side of the policy framework, so if they get tight you will have higher really yields in the future. Think right now we are pricing for fed perfection, we need to see more at risk premium of inflation overshoot in the market. We will see the real yield start to climb a little bit. It will stay low by historical standards, but too low right now because the market has perfect faith in the fed. Jonathan help me out with the federal reserve. I did not understand the fanfare in the last week around chairman powell. All he did was formalize what they have been talking about for the last 12 to 18 months. We already knew everything he said because it had already leaked into the reaction function of the federal reserve. Now he has written it down. It is formalized. Fantastic. What will they do about it . It will not happen like that. How do they generate it . Michael that is the problem. That is why he did not see a huge Market Reaction. Lots of words written, but Market Reaction is relatively muted. The fed is trying to send a lower for longer single but we have already been priced for lower for longer. Market saying fed funds rates for the next five years will be 12 basis points. If you believe rates cannot go negative, which i strongly believe, there is not a lot of upside. Fedmarket is assuming the is going to be lower for longer. , interesting intellectually, but from a practical standpoint on how the fed will behave, it does not tell us anything already priced into the market. Lisa you are a long time fed watcher. Youve been looking at it from the rate side. I want to pair that with this , i am a saidmckee michael economy, that is his twitter handle. Million americans are receiving jobless benefits. Is there anything the fed can do to lower the jobless rate or are they impotent at achieving that goal . Michael all they can do is keep rates low and try to hide some signs. Near change is more about whether we get more stimulus or not, whether another stimulus package is coming. That is the critical point to look for in the coming months. Pretty much all they this thingth is keep lower for longer, and then we think they will shift down and by the long end of the curve more than they have been. What they are going to buy is peanuts relative to what the treasury is issuing. If you look at the average coupon auction size, it is going to be up more than 50 from march to october. Of more thanch 50 . This is a Staggering Amount of supply from the treasury. The fed cannot absorb all that. Jonathan great to catch up as always. Michael cloherty from ubs. 2020 is work from home and even the strategists at ubs do not wear ties. That is the world we are in. Remember where ubs had the uniform guide of what they had to wear . Tom we notice this among fed officials. Chairman powell spoke at jackson hole. Jonathan was there jackson hole last week . Tom Michael Mckee did a series of interview. Tieless is a look. So i coulded my tie follow with mr. Kaplan of dallas. It really works for radio. I have to tie it back up because were going to a spacex launch in seven minutes. Jonathan what it you tie on tv and do something for radio. Explain to them how you do up a bowtie perfectly. This will be brilliant on radio. Tom i have done this on video. The way you do a bowtie is you tight just like you are tying in ice skate. That is all there is to it. These bowties are fancy french ones and they are easier to tie, to be honest. Jonathan what if you have never tied in ice skate . Tom that is a problem. It is a british thing. In the real world, lots of people know that, and it is just like tying in ice skate. Jonathan the real world is anyone who plays ice hockey, and everywhere else is not the real world . I do not know why ask you to do this. Tom let me tell you about the spacex launch. Jonathan please do. Tom this is 60 many satellites into orbit to get towards internet for everybody. Have we learned in this pandemic how important that is. Tom much more still to come on that. Countingnce worldwide, you down to a payrolls report tomorrow. We will bring you that launch shortly right here on Bloomberg Radio and bloomberg tv. With the first word news, i am ritika gupta. The cdc says state should prepare for Coronavirus Vaccine to be ready just a few days before the president ial election. That is an impressive goal that would depend on shots being tested and reviewed by then. President trump has previously said he thinks vaccine will be ready by election day. That claim has raised questions about political interference in the vaccine review. President trump is denouncing voting by mail. He told a crowd in North Carolina that if they vote by mail they should also go to the polls and try to vote a second time. He said that as a way to determine whether there mail ballots were actually counted. That could lead to voters violating the law if they try to cast a second ballot. President trump has ordered a review of federal funding for what he calls anarchic cities aimed specifically at new york, seattle, washington, d. C. , and portland oregon. All are democratically run cities that have protests demanding racial justice. Any moves would probably result in a court case. Ate job cuts on the way ecigarette maker juul. The company is thinking about exiting european and asian market. Company hashflying already laid off about 40 of its workforce and halted its global expansion. No word yet on how many jobs will be cut this time. Baseball, hall of fame pitcher tom seaver has died. Siebert turned the new york mets from lovable losers to neat to World Series Champions in 1969. One of only two pictures to record more than 300 wins, 3000 strikeouts, and it turned love and earned run average of less than 3. 0. He was 75. 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. I am ritika gupta. This is bloomberg. Jonathan 46 minutes away from the opening bell in new york city. Good morning to you stateside. Equity futures down. 4 . The Economic Data in absolute terms not great, but relative to where we were improving. Looking forward to having that conversation on improvement ahead of the payrolls report with Emily Rowland of John Hancock Investment a lot of it later on the open on bloomberg tv. Tom certainly is a statistic that drives home the important the importance of tomorrows job report. There is digital dominance, Technology Dominance of people trying to get back into space. One of them has been elon musk and this morning twice postponed, he will do it again, the 12th launch of the falcon seven. This is the space star link satellites sending 60 satellites into orbit, all of this is about linking together the internet of the future. Lisa it is fascinating to see how much private private businesses, the likes of elon musk and jeff bezos are supporting the Space Exploration industry that is widening around the world. How different from the 1950s and the 1960s. Tom we will see the launch, and the first rocket they will attempt to recover. That has become routine. They will recover it on a drone ship. The history of this launchpad at canaveral is extraordinary. This goes back to 1948 and the first testing of b2 rockets, which at the time were a massive mystery as we took the german engineers over the huntsville, over to florida, and then onto the Historic Center launches and apollo, and now elon musk doing something original, the linkage of private with public at cape canaveral. Lets listen in. 9, 8, 7, 6, 5, 4, 3, 2, 1. Zero. Ignition. Lift off. Performance is nominal. Successful liftoff for falcon 9 from pad 39 a. Tom we welcome all of you on Bloomberg Radio and bloomberg television. Spacex imagery for television. Rocket powering into orbit. What is extraordinary is how fast this occurs. 14 minutes out, the deployment of the satellites and looking for that first stage two off. Still for people who have been watching this for years, something still technologically unimaginable, and elon musk and his team have made it a reality to bring the first stage downtoearth. Lisa abramowicz and tom keene on your simulcast. Jonathan ferro is off to prepare for an eventful market opening. The dow 29,100. Joining us is Anand Srinivasan of bloomberg intelligence, our expert on the technology and computing. What is so important is the Computing Power today. You look back at the history of apollo come of gemini, of mercury. Today at its power weakest level is factors better than anything they had, isnt it . Anand it is, and the advancements we are seeing as a result of the clout industries dominance and different vectors of advancement he pointed to rockets. Nd the falcon madetic progress being along so many different vectors. It is fantastic to see. Tom two minutes into the flight and we will continue to have this on bloomberg television. On Bloomberg Radio, we have Anand Srinivasan with us with the images as spacex moves to orbit and the deployment of the satellites. I want to go to the digital dominance we see. Butay be away from spacex, certainly we have been sobered by technologies dominance in this pandemic. What happens when we get a vaccine . Does Technology Continue forward . Anand absolutely. Some of the progress we are seeing, some of the transformations we are seeing were already in place and were accelerating even before the pandemic. The pandemic put a turbo boost on it. Some of the things have radically shifted, some of them have radically accelerated. We have learned a lot of lessons through this pandemic. Remote work is not that complicated. Ecommerce is not that disruptive anymore. We can make progress along these and in some cases will never turn back to the method of y ore. This is in many cases a Tipping Point for several subsectors of the economy. The 1940s,n 1950s, 1960s, it was the government financing a lot of the technological exploration and there were a lot of discoveries, mathematics and physics that came out from this that would now have occurred otherwise. Now we have china doubling down on the nation spending toward software predominance, the idea of the tech wars and the idea of state sponsorship. Is china going to get the upper hand with his sponsorship from the u. S. , which does not seem to have a comprehensive similar plan . It takes a lot of things and are the work in order to have that level of dominance. We have seen this effort at the National Level to a Publicprivate Partnership or to government heavy hand or to a combination thereof. To ben valley has tried replicated in the u. K. Remember the silicon roundabout . Or through chinas multiple fiveyear plans, through taiwan 1980s dominance which is seeing a bit of a revival. Bangalore, its development parks. It takes a lot more than that. It takes a combination of r d efforts, a combination of government infrastructure involvement and a combination of software presence. It takes talent, it takes capital, it takes infrastructure. Youve to put all of those pieces together and that is hard to do. Lisa can you give us a sense of what is on the front line of the next innovation in the Semiconductor Space . Anand one of the interesting things is the presence of the computingch is taking , diverse forms of computing very aggressively. We saw a relatively state development when it was just corporate ip involved. What the clout has done what the cloud has done is dramatically expanded the scale of computing and expanded the variety in computing. If you look at gpu, these are predominantly gaming related chips. What the clout has done is applied the general purpose gpu to a variety of computing problems. Both in terms of scale and variety, youre going to see chips expand. That is number one. Second is transistor shrinkage. We have seen some stumbling by intel, advancements by dsm mcn samsung in terms of trying to shrink the size of the transistors. I think that is going to continue, but i think people are going to be clever about how they do these advancements. I think those are two interesting vectors. Tom thank you so much. We have to get back to the astrology of the moment. Anand srinivasan joining us from bloomberg intelligence. On Bloomberg Radio and bloomberg television, simulcast of the space launch. So far very successful. We have just shown the reentry burn, which is an important moment. The first stage has been jettisoned and is working its way back to the atlantic to the drone ship. Right now we have that key burn to get through the process of getting the satellite into orbit. Satellites,tling which go into orbit. There ise statement is a huge overarching need to drive 5g and the internet forward, the connectedness of the world as well. On radio, it is simple. Space, redgine in hot from the heat. Remarkable to see the redhot nature when you go back to mercury and you wonder about the invisibility, how we had to guess what was going on. Now we see it with the new technology. It is beautiful. Lisa, it is something i can never get over. Every time theres a certain risk, manner unmanned. Lisa would you ever want to be an astronaut . Tom i used to sit in a Cardboard Box in the basement and you would fake you are in gemini or mercury. That was before apollo. Lisa i have gone to the intrepid in new york and sat in the old space capsule. So much fun. The name falcon 9 harkens back to an era that was a gilded era of Space Exploration. Tom we are getting back to it with this private public consortium. For those of you on radio, the thing i cannot get used to, a drone down and landing on the drone ship like we do that every day. That is extraordinary. We will exit from spacex and get back to the business at hand. Here is the business at hand. 800,000 to 900,000 jobless normal so far from the we once knew of 210,000 and 220,000. It still bears careful scrutiny. We will give you that scrutiny into tomorrows jobs report. As always we have a Terrific Team lined up to go but need that headline and data. William acxiom, Pershing Square look for that this afternoon. This is bloomberg. Jonathan live on bloomberg tv for audience worldwide, good morning, good morning to wall street. The countdown to the open starts right now. Equity futures negative on the s p 500, down. 5 . We begin with the big issue. , the economic recovery continuing. The Economic Data looking better is fueling this rally. The markets have rallied strongly. A rally from the low set in march. I keep looking for a to get bearish. Data shows economic recovery. It is very noisy. You could start to see the Economic Data so often. Important to see this rehiring continue. All eyes will turn the labor markets over the next few days. Jonathan that starts right now, with the payrolls report 23 hours in 30 minutes away. On