Increasing a little bit from that level. A line in the sand with a lot of money flowing in. Taking a look at the etf, its amazing, up 9 10 of 1 . Now,the pound right comments coming through from michel barnier, indicating he thinks a deal as possible. Thats the most positive ive heard him be for quite some time. The market certainly latching onto that. Coming up, we are talking cars. Joining uscitroen later on, releasing a new electric car. Hows that going to sell in the current environment . We will talk about that more broadly in the car market. As they say we are coming to the end of the second quarter, which is certainly something spending a little time worth thinking about. The first half of the year has been quite a roller coaster but one that has been defined in so many ways by unprecedented action by Central Banks responding to an unprecedented crisis. Joining us now to break down the genesis of the rally that we are seeing in risk assets right now, mike mckee. Mike, the crisis is unprecedented. But in so many ways, the Central Bank Policy response has been even greater. We look back on the last quarter and we have seen the reaction to that in financial markets. It has been enormous. My question to you, is, did they need to do all of what they did and is it sustainable . Separatets two questions in the first part my answer is probably. Is it sustainable . Thats an interesting question going or word. We have Stephen Mnuchin and jay powell testifying on capitol hill at 12 30 today. In his prepared remarks, jay powell says the path forward for the economy is extraordinarily uncertain and it will depend in large part on our success in containing the virus and that a full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities. The fed put up nine lending programs in partnership with the treasury department. Of course, the cares act put a lot of money into the economy. As far as the cares act is concerned, the beginning starts at midnight. The Paycheck Protection Program expires, no more loans, even other is 100 and 30 billion left in the program. Powell and mnuchin will be asked about what more needs to be done as the third begins, hoping for seegorous debate as we these additional cases rising in the united states. The idea being that we are past this, that debunked by dr. Fauci and others. Suppose we get 3 million jobs in. Une, as the forecast suggests that still leaves 17 Million People unemployed. How many who are on payrolls in june will be there in july . And they cant make their companies go forward . The Business Roundtable survey today shows sentiment among Corporate Leaders as being the lowest since 2000 line 2009. You can draw another line on that one in terms of hiring plans, they mom the adding a lot of people. Members of Congress Talking about additional stimulus programs. Marco rubio of florida, ben cardin of maryland, talking about what to do with the ppe money. States in trouble financially as their fiscal year comes to an end. As far as the administration is. Oncerned retail and travel are facing longerterm impacts for additional relief. We set up for a market move in the second order, but whether that second quarter, but whether that continues, depends. Alix all of that confusing investors as well. Mike ryan, ubs Wealth Management cio, i could give you stat after 98. , best quarter since worst quarter for the dollar. As they digest that and look at the second half, whats your playbook, your top play . When we look into the balance of this year, the first thing we see as you mentioned, and mike hit upon this as well, this extraordinary direction of markets. Once we saw that there was going to be a meaningful and ,nprecedented policy response even if the economy doesnt look like a v, the markets look like a v. It will depend on a couple of things. A second wave or a second spike in the first wave, the impact it has on the reopening process, how much it is going to do further damage to the economy or how much it hampers the economic covering process will be lately important. Technically, we will have to see what the next policy response will be. When i think about policy response, is it necessary to answer the question that you asked before . The answer is absolutely, this is the biggest collapse in demand we have seen since the great depression. The question on the mind of everyone, though, is was it sufficient. Monetary policy has been fully mobilized. As we mentioned, we have this belief right now in ppp and we are expressing additional fiscal stimulus in the 1 trillion range to 3 trillion range. But this is the more contentious part of the process where you have the political dynamics walking into an election. It certainly will be more of a bitterly contested process and probably one that will take a bit longer. The bottom line here is, it means markets will chop around a bit, but the gains will be much more measured Going Forward. In terms of where we are exposed, the areas we are focused on are areas that we think are primed well for the reopening process and have defensive characteristics as well. The areas we are looking at right now our consumer discretionary, industrials, and health care as well. Ok. Europe has a lot of health care. Does europe continue to have more . Tougher call. There are two elements from our perspective. One is composition in terms of sector representation and how they will recover. The second is policy response. I mentioned before the incredible policy response and while we have seen similar moves across the globe, we arent necessarily seeing the same level of magnitude. Its not clear that we will get the next stage of followthrough and policy outside the u. S. That we are likely to see here. Right now we dont have a strong preference for europe and we wouldnt would prefer in terms of exposure outside the u. S. , we would hurt we would prefer overweight to u. K. Outside the eurozone. We are not focused right now in terms of trying to be overweight on eurozone purely based on what we think is a compositional element sector by sector. Alix how do you factor in politics into that . How are you addressing those concerns within your port folio . John mike those will be the big issues. We will be simultaneously discussing covid and pinned it pivoting to the november election. Our view is that politics will continue to play an Important Role and the outcome in november is going to be pretty important from a market perspective. But i do think that there is this consensus view that we have this winery set of outcomes where one electoral outcome is good and the other is bad and i dont think it is quite that extreme. Lets assume for a moment that we see perhaps the democrats being able to not only maintain their house leadership, but extending that to the senate and even capturing the white house. The notion is that we could see a Democratic Administration and congress pushing a lot of legislation through. That could be of course tempered by whether they have a controlling majority in the senate. Also based upon what they will be facing in the realities of the economy. If we are still the process of recovery, the last thing you want to do is broadly raise taxes or regulation and we are still likely to see, no matter who is in the white house and controlling congress, we will see further pushes for fiscal initiatives. The types of initiatives will change. We will see much more emphasis on domestically driven issues and both parties will likely also support continue jobs support, but you could also see a push for Infrastructure Spending as well. Guy mike, we have got to leave it there. Mike ryan, thank you very much. What we have got coming up for you, what happens here the u. K. A speech earlier on, build, build, build. A new deal for the british economy. We discussed whether it gets there. This is bloomberg. If we are dealing with the coming economic aftershock, this is the moment to address the problems in our country that we have failed to tackle for decades. The British Foreign minister, Boris Johnson, speaking a bit earlier on. Build, build, build. The speech was billed as a new build for britain. Lets ask that question, alex morales joins us on the line. Did it deliver what we were promised . The overnight lines from the Boris Johnson office were that this would be a new deal with the new deal that got the u. S. Economy firing after the depression. But the centerpiece of the announcement was 5 billion pounds of accelerated spending. A spending that was brought forward in the infrastructure for schools and hospitals. Gdp,s not quite 2 of amounting to 40 of the 1929 outfit. Ok, he may have fallen short there. In terms of the details, we were never going to get them from forest johnson. We were always going to get them from the chancellor. What details are we expecting in terms of how the money will be spent and in terms of what will happen on the planning front . Theres quite a strong emphasis here on building. It says touchy subject right now, building houses or apartments. Will we see significant planning restrictions and what Economic Impact did that have . The government says that it is going to ease restrictions to change commercial building to residential buildings. Now you wont have to go through quite such a drawn out process. Is that ashind that things change with the modern economy you have a sure fit of conversion into residential buildings. These regulations will probably accelerate construction in the u. K. Boris johnson complained in his speech that it takes so much longer and costs so much more because of the redtape. Alix im glad that you brought up the redtape situation. Here in the u. S. , these are hot words that everyone talks about wanting to do, building, infrastructure, but there never is consensus on how to do it. Is there consensus in the u. K. . Are all the politicians on board to get this done . The Opposition Leader part Opposition Labor Party wants to see people still being able to afford to buy their own homes. Alix new deal . Maybe not. Coming up we have an exclusive interview with todd boley. He will be joining us next. This is bloomberg. Welcome back to bloomberg markets, european close. Our next gas next guest has is the founder and ceo of the rich industries. Todd, good to see you. Having me back. Good to see you. Thank you for having me back. Good to see you. Ideas we had today, cirque du soleil. Tell me about the battle that is playing out in bankruptcy court. To notts better for me say anything right now. Erik i can understand your reticence, but tell me this, why do you think that, given what we know about the pandemic and that broadway has shut down until the end of the year, whats interesting about a company like that that is so dependent on peoples ability to attend a performance in person . Todd if you look at Live Entertainment generally, ask yourself, what we like about Live Entertainment . We are going through an interesting glhf where if youre timeline is 10, 20, 30, 40 years, i dont think this pandemic will change whether or not people like to gather and be entertained. Whether or not people want to go to chucky cheese, for example. Theres 98 of the population within 25 its of a chucky cheese. You can have a great Family Birthday Party for eight kids for 50. When you look at value propositions, generally, you can recreate them at different itss because effectively just capital structure evolution thats going on and ultimately kind of strike stakeholder needs. Thats just kind of natural in these environments. Ultimately if there is strong intellectual property, some hits , a decent business generally, they have a they have invested a lot in the ip, those are the types of things we are very interested in. First round, march, we were able to purchase it a bit of secured paper from live nation. We have been very active in creating value where we think there are value gaps. Looking at the landscape right now, you can purchase a 10 year bond for 70 points or you can get Investment Grade debt for 2 . Whereou start to look at you are putting capital, you can create these things at discounts. If i may ask, what are you interested in now . Markets have certainly evolved since march. How much liquidity can you deploy . Erik we are being opportunistic on two verticals. If you look through the themes that we are focused on, covid has given us a lot of opportunities to recreate really good businesses at low prices and if you look at the stuff like pay active and true bill, we really think the costs of the system has to go down. The efficiency in the system has to go up. The idea that people have to get paid every two weeks, that was such an legacy to analog banking, where the banks would be open in the morning and then shut down in the afternoon to settle their transactions. The reality is that none of that needs to happen anymore. If you look at where we are spending our time, distress value, creating Good Opportunity , in sports and services that ultimately, people get to companies that are wealthy. They help employers with employees ultimately get real good information about aging parents. Right . If you go somewhere and you get something specific and quick that is complex, we think the streamline for that information is a valuable business. Erik you have been playing offense, but certainly part of your business is defense. The pizza hut franchise he was in trouble before the pandemic and is clearly in more trouble now . Erik as we talked about previously when i said there were no silver bullets, our role is to successfully transition the stakeholder base so that a new group of locals can be working with a brand for a business to be built. When we made the decision to say what would we protect, ultimately we decided that this wasnt going to be one that we protected or defended and unfortunately they dont just do draft king investments. Does that mean that you lose the entire investment or is there residual value for you erik we wrote todd we wrote it off. Todd we wrote it off. We have already profited. Erik makes sense. With only a few seconds left, where are you focusing . You talked about the things that you were doing. Of pro sports franchises becoming available because of whats been created by the pandemic . There will be a lot of opportunities across lots of vectors, sports, Live Entertainment, food. Ultimately there are opportunities across it all, but the reality is that you will also recognize that there are only 30 Major League Baseball teams, they arent going to make more. There are 32 nba and nfl teams. There is a finite amount of these teams and i dont think that just because of the pandemic that the opportunity for team ownership, looking back 10, 20, 30, 40 years, we have the luxury of having that. That there were Good Investments to be made. Ok, over the next couple of years. It could take that long for this to play out. In the past you have talked in theour interest english premier league. Is that a place where you are still hopeful . Todd we have really look at return on capital. That doesnt mean we wouldnt be interested in english premier league. We continue to watch and observe and are happy to see it come back and are happy with their success, following it very carefully. There could be something to be done. There isnt really a Global Sports platform that has been built that can work and cooperate together. We think that there is a big opportunity for that. Andwe need major markets major cities to make it work. Guy where do you think you will find the best distressed opportunities . Credit markets are not in nearly as much trouble as people expected early on. Todd we purchase to the u. S. Rights to a belgian bakery, lp q. We were very pleased with that. We expect to come out of bankruptcy opening between 40 and 50 stores with active conversations with the landlord. The reality is the best landlords are becoming Land Partners in this environment. See landlordsn we that want to cooperate and help us grow, we get really excited about that and ultimately, the structure of the leases are changing with liability changing with what we were are requiring being much less than it was when we look at these businesses a couple of months ago. Operatingou want businesses like that or are you as just as interested in the real estate that you just described . Todd again, i think everything is really specific. Todd todd todd you want to go market by market into everything you can in that market. We are in miami and we have Strong Demand in miami through the covid pandemic. You are seeing less demand in new york. We are trying to figure out where new york ultimately settles down and what happens there. I think its very specific, city by city, with what you are looking at. One of the benefits of pandemic is that it has brought us more liquidity into the new jersey real estate markets, which for the longest time there hadnt been. Ultimately theres Silver Linings of lemonade coming from these lemons. Todd, it is great to see you. Todd boehly, the ceo and founder of eldridge industries. Guy . Guy thank you very much indeed. Coming through from the new york fed, John Williams has been making interesting comments. No decisions being made on yield curve control. Starting to see the Market Positioning for yield curve control, and we were talking about the impact that will have on the banking sector. The economy is linked to the part of the virus. The new york fed making it very clear the virus comes first, the economy will follow. Interesting what we are seeing with partial lockdowns in places like florida and texas. European markets are sharp. Lets look at the numbers. We will deal with the quarter in a moment. In terms of the session, the stoxx 600 pushing up towards session highs. Up by. 3 . U. S. Ata coming out of the hoping that as well. In terms of what the main markets look like