Even pharma is down. One thing you have pointed out is the volume and how it has picked up as we sold off today and extended yesterdays weakness as well. Yesterday volume had dried out and people were sitting and waiting. You are seeing a pickup in activities this week. What do you think that signals . Brent i will go back to my opening comments from the standpoint of people who are shortterm market participants, thinking of the next couple of weeks what is volatile given the reopening has started and we will get realtime feedback of how that goes. There will be spots where it will not go as well. If you have those setbacks in those areas, that would be a nearterm market detractor. We will find ways to deal with this. Treatment,ccine or these have become political statements, but i do think america will find a way. That is what capitalism and democracy does. It adapts to problems historically. We have this big blanket of the economy which was a thing we needed to do and now we are finding ways to be more targeted and thinking about how different parts of the economy can reopen, different states, and how we manage that in the future which to me means Economic Growth rate we were almost all the way closed a couple of weeks ago, now having some part three open, it is better but there is risk involved. Nothing political at all about talking about the resiliency of the u. S. And americans. When you look at the potential opportunities that could arise out of this crisis, can you give me a sense of what you are looking to towards the potential industry and general economic changes investors maybe the benefit from once we get to the other side of this crisis . One thing historically, recessions have consequences and cause leadership changes. That is it was hard to figure out why tech and health care would not lead, and they did. , around china we are in a time where sectors i have much and not worked so well otherew years as well as parts of the Global Economy which have lagged behind. Those economies have problems with valuation being cheap. All it takes to have some spark and incremental positive. On the fixed income side, tips are an alternative to nominal treasuries, given the fact people believe inflation will be low forever, which if you are laying even a more fertile environment, you will get did and the issuance through all of the monetary policy. Not seeing it is coming soon but the opportunities longerterm that end up being the bigger winners are the ones you dont think of now, which dont appear obvious. I am looking for one of those. Wont our reporter wrote a few days ago that options are higher for six months out than a year out because of the election which is under a half a year from now. What different risks do you see for different asset classes, not just equities but fixed income . Think the election, we will start ticking about that in the coming months. It is certainly going to drive part of what happens in the next expansion. The areas we are watching, it is united. It has modern monetary theory , one party was thinking more about, not sure of the fiscal prudence in washington anymore. Buybacks not being as prevalent as in the past and how that might change. Virus is front and center, but you will switch to thinking about elections. The biggest thing driving the markets is the virus and that once we get the election and get closer what happens after that. Scarlet cisco has reported results, thirdquarter revenue of almost 12 billion, just shy, when analysts were looking for 11. 7 billion. With thirdquarter adjusted, leading the consensus estimate by a dime. Cisco is giving an outlook saying it sees fourthquarter 11. 5 , down from 8. 5 to better than anticipated. Aalysts were expecting around drop of 12 . Season adjusted eps better of what analysts were looking for. And finally cisco said 90 of its Global Workforce is working from home. That is fairly consistent across the tech companies. Romaine more earnings coming out, Smaller Companies and less consequential. This one went public last year. Revenue one quarter 197 million. They did have a loss, the shares moving lower in afterhours trading. I want t to brent. We have been talking about the u. S. Market and economy. When you look beyond our borders at the other markets europe, emerging markets, the you see any reason investors should be paying more attention to those areas with regards to potential Investment Opportunities . Brent they are cheaper. I hate to bring up the valuation but they are cheaper. They have not done well, reflective of the fact their economies have not. I think about you merging markets in general, some of those, if we are to believe the numbers, they are back open and youre seeing Economic Activity pickup. So right now that appears to be a decent place to have allocation just because they are open and they have been able to, korea,uth korea south taiwan, they have been able to adapt and to deal with the virus which means they are producing Economic Growth. Brent sxhutte, thank you for taking the time to speak with us today. That does it for the closing bell. We will continue the conversation on emerging markets where we look at the policy response to covid19 and what does it mean for the assets. This is bloomberg. Romaine broadcasting live to our viewers worldwide, i am Romaine Bostick alongside scarlet fu. Scarlet lets get you a snapshot on how u. S. Stocks closed on the day. Another day of decline. At one point the s p fell for a second straight day. We did pare losses into the close. This on the heels of some disappointing guidance from fed chief jay powell who talk about the uncertain Economic Outlook and the economic ramifications of covid19. Of cisco you a recap systems which reported earnings after the battle. They reported thirdquarter revenue and profit that beat analyst estimates and the Quarterly Outlook also comes in higher than what analysts were looking for. Analysts were looking for a drop somewhere around 12 . Onwe are keeping an eye cisco as its shares rise in after hour trades. Back to the big picture. It was the fed that stole the spotlight. Jay powell painting a gloomy picture for the economy saying he sees significant Downside Risks but also emphasized the central bank is not considering negative Interest Rates. It is an unsettled area i would call it. There are fans of the lessee but for now it is not something that we are considering. We have a good toolkit and that is what we will be using. Scarlet lets bring in market data. Mark cabana. You are the perfect person to discuss the prospect of negative rates with. Jay powell pushed back against it but did not rule it out either. Market extent can the push him or pressure him into negative Interest Rates . We have seen them pricing in that prospect. Mark it is a great question. I think the chairman was very clear that negative Interest Rates are not attractive at present. There have been a number of fed speakers that have said some ung from thee s same songbook. It is unusual. Negative Interest Rates are not something we will see in the near term and we think this is something the fed might be considering. That is not the case. Powellntly what chair said is the fed would prefer to focus on other policy tools like asset purchases, some of these didntsual, but the fed say they would ever would never consider negative Interest Rates. We will not see them as you have this composition of fed officials. A this safe to say it is not something we will see in the next few years. The market is pricing possibility of negative Interest Rates deeper into 2021. That seems fair recognizing you could have different leadership at that time and you could have a shift in thinking at the fed around negative Interest Rates but in the near term it will not happen. The fed was clear and there is operational challenges the market would face if they wanted to take rates negative right now. Not something in the cards for the next few months and quarters. Brings up the question for investors in sovereign debt in the u. S. Are you still comfortable being when bouncing near zero in terms of phenomenal rates and you have the delusion of treasury issuance coming down the pike this year and next . Mark yeah. If the fed is not going to go negative, what will they do . Why would a fixed Income Investor want to have a long bias . We have been recommending this within the 50 to 80 basis points range because the fed is not raising Interest Rates at any point in the near future. We think they will take more overt measures to signal that rates are going to be low for a very long time. They will focus on their asset purchase pace in the coming months. One thing the chair and others have suggested is we need fiscal policy in order to help address what ails the economy now. What the fed can do is lower rates so far are we are not in a recession because Interest Rates are too high. It is because people dont feel safe and cant go out. You need aggressive fiscal policy to fill that aggregate demand gap. What the fed is telling us is they will be supportive of fiscal policies. Seems like the fed will be rather aggressive in the pace of asset purchases to facilitate easing fiscal policy in the near term. Chair powell didnt say that but recognizing that is the lever that needs to be pulled right now, it would seem counterproductive if the fed would allow the upcoming treasury supplies to push Interest Rates higher and tighten financial conditions. We expect the fed will stay on the other side of that and remain low for the for seeable du jour. Future. Eeable scarlet how else do they address fiscal policy . Mark they could use some form of enhanced Forward Guidance that might suggest they will not raise rates until prices reach a certain level or the Unemployment Rate reaches a certain level or nominal and real gdp reaches a certain level. That would give confidence, pricing a low trajectory of the federal funds target for the foreseeable future. The fed can ease conditions by buying mortgages, limiting the rise in Mortgage Rates and to preserve the flow of credit which a lot of the nontraditional programs are really aimed to address. The fed could ease the terms on the programs they have put in place. What we hear from investors is becausewill be limited of the onerous requirements to disclose names and certify certain elements of the program. If the fed were to think about easing conditions, that would better support the flow of credit and support risk assets. We only have about 45 seconds left. I want to get your thoughts on money markets. I wondering if you think they will continue to slow and maybe even reverse with outflows . One great great question. As long as risky assets remain around current levels we were likely that we will likely see the pace dissipate. Some analysis has shown three months to six months after a sharp risk asset direction, you see outflows from the money fund community. We are not there yet, but it is a risk to watch in the near term. If you see them, the fed will have to be aggressive in the pace of purchases so Interest Rates dont rise to much. Romaine great to have you. Always love to get your insights. Mark cabana. We will talk about cisco earnings, they did drop, the shares kind of fluctuating in afterhours trading. This is bloomberg. We want to get you up to date on what happened with cisco. Reporting thirdquarter profit and beat analyst estimates and gave an outlook for revenue that topped the consensus estimate. We are seeing the shares slide in afterhours trade. Romaine they are sort of rising. We want to bring in a Bloomberg IntelligenceSenior Technology analyst who covers this company and does more about it than we do. I know the results just came out, but what jumped out about the results . I will tell you one thing. They were better than feared. The one thing is [indiscernible] the results i which is driving the eps for the quarter. Which is driving the eps for the quarter. 10 drop on the year on year basis. They were looking at 12 drop. All things considered, given the environment and enterprise exposure, i would have thought it would have been lower than consensus. It was more resilient than i would have thought. Perhaps that is because of internet and Video Conferencing use, that part of the business, which is up during the pandemic. What guidance did the company say that could move the stock in a meaningful way during the Conference Call . I think they will talk about the Enterprise Spending environment more than anything else. They dont guide to a segment level. It seems as if some of the bookings they may be getting, the efforts they have done the last several years in terms of software and revenue services, that may be providing a bigger question than what the consensus may have been factoring in two expectations. To expectations. Romaine the dividends on buybacks, is that safe still . Yeah. Cash was actually up on a sequential basis. I dont have the Share Buyback number for the quarter, but if i 2008, 2009he financial crisis, even with a big downturn for these guys, they were cash flow positive in this quarter. They have a boat load of cash. I would not be surprised if they continued to buy back shares. The dividend is safe. I would not be surprised if they will be active on m a in this environment, to look for companies, capital squeezed companies to fill in technology gaps. Scarlet what do they need to address . The things they have been going after the last couple of years has been on the software side. They want to bolster their through the networking business, where everything is going. They want to be less hardware dependent. The other thing is to buy chips as well. Ast he covers cisco part of his coverage at Bloomberg Intelligence. Cisco shares are higher and afterhours trading. Americans getting coronavirus testing before the rest of the world. This is after if the french drugmaker can deliver. The ceo said the u. S. Was first in line to fund the companies research. The companys research. Europe risks falling behind. Royal caribbean cruises selling me . 3 billion of secure bonds. They will have coupons selling 3. 3 billion of secure bonds. Selling the bonds allows the cruise line operator to shift the one year majority maturity into longerterm debt. U. S. Inflation at the wholesale level, prices falling the most since 2015. The ppi was down 1. 2 from a year ago. That reflected the drop in Energy Prices and the demand. That is your business flash updates. We discussed emerging markets earlier. We will dig into it more because em is making a relative come back. Some investors think we will see selloffs later this year. We will jump into this with this is bloomberg. Romaine after the worst rout since the financial crisis, financial groups recouped 3 trillion in market value. Seeing a technical bull market, record lows in dollar debt, but there are some folks on the other side of this trade here. Perhaps valuations are not up to speed with Economic Outlook. For more on what is going on in emerging markets, we want to bring in denise simon, cohead of emergingmarket debt lazard asset management. Fore is a case to be here being in em assets, perhaps even turning your back on them. Can you give us a sense of how much clarity there is right now for em investors . That looking at emergingmarket debt in creditlar, hard currency for sovereigns and corporate, when you look at the Balance Sheets coming into this crisis, they were in good shape. Debt to gdp around 50 . Even with the big shock where we will see a big drop in growth, seeing fiscal deficits expanding, they can afford to have some expansion on their Balance Sheet. This selloff that we saw where you see the higher grade names have access to the market, very resilient Balance Sheets, prudent macro policy, policymakers have been able to respond to the crisis to support domestically, it has been, the selloff has gone beyond andamentals and then been opportunity. Scarlet are you separating this by sector, industry, or country . The way each industry reacts to the pandemic and the fiscal assistance it is able to offer could override concerns about the industry. Think i would look at asset class, credit. These countries and companies are in a good position to whether the shock. Then i would look at countries coming into this with not overly macroged, that have good solid management and can have react toace to this, then look at countries like russia which, despite the oil shock and then also having they have not seen the Inflection Point on the infection yet, their Balance Sheet is strong and resilient. They have less than 15 debt to gdp, 550 billion worth of reserves. Upthere bonds are actually this year their bonds are actually up this year. There is room to go. So for Investment Grade credit 200,that, they spread over looks attractive. What has been interesting in this selloff is i think sorry. I want you to expand on that. The russia thing is very interesting. A lot of folks have not paid attention to the Balance Sheet issues or rather benefits that they have. We have seen this with other em nations, that a lot of them, low inflation environment for a lot of these countries, others with low levels of dollar denominated debt. I wonder if this puts them in a better position to weather whatever downturn we are in and the length and severity. Denise i think it does. It puts them in a good position and with core yields at low levels and lik