Or the rest of the world. With Earnings Seasons coming up and a few key Economic Data points later this month, how confident are you in the economic recovery . Great setink we had a of economic figures really since midmay through june when the reopening story was gaining the most momentum. Reports,o great jobs pmi, sales, housing data, all to the upside. Economic price indices we follow are in the u. S. Now at alltime highs. That being said, i think we may have a time of slowing in perhaps in the weeks ahead as Economic Data plays catchup with what we are seeing in the country with a slower reopening broadly. So the job state of this past month captured the time from midmay to midjune. The next jobs report will capture midjune to mid july, when we started seeing thoses likes and those spikes and a pause in the reopening. As you mentioned, we also had earnings starting in earnest next week july 15. From an earnings perspective for two to we are seeing downward for q2, we are seeing a downward revision. A lot of the bad news we think is starting to get reflected in numbers, but we could see some of the q 2 estimates. The key is what Companies Say on q4 what they are looking for. Last quarter we did not get much from everett outlooks. This court corporate outlooks. This quarter we are expecting to get more. The fed was not able to give us an economic projection in march but gave us one in june. Keep an eye on that, the data and also that will coincide with the time when we will look at additional stimulus in the system as well. I want to go back to Technology Strength and twitters power users. Sarah hadng out what been saying, tesla is down today. Up electric truck maker is 35 low. Though. The desire for risky bets is still front and center. Im interested on your take of what retail is up to and how it is towering the risk off sentiment powering the risk off sentiment. We have been tracking accounts that have skyrocketed. The Retail Investor was involved we saw that major move in cyclical sectors, airlines for example, hotels, cruise lines, we had a nice run for four weeks. As those have stalled out, we are seeing retail interest in some of these stocks pacific stories you mentioned, twitter being one of them, certainly tesla and nicola being among them as well. I think the robin hood retail trade loves a good theme, a good story. When the cyclical trade has ended, they will look to others. Going through earnings season, we make it others, semiconductors are on a short list of potential ideas for that sector or group of investors. Certainly we have seen a more outsized weight from Retail Investors driving the market when we have seen really in any time in recent history. To get yournt thoughts, your the second strategist i have heard from that for the first time in a long time it is managing to look abroad and perhaps maybe look at europe. So much the trade was europe versus the rest of the world but europe looks so cheap, it could be a good time. Explain the thesis for europe with the overseas markets. Absolutely. We touched on this earlier. Europe has done a much better job or a phenomenal job in managing virus and we are seeing ,he trends across europe really all of the economy is on the other side of the curve, cases are trending downward as our hospitalizations and death rates. Ands are hospitalizations death rates. There is a large amount of indices that are positioned in financials, industrials, certainly energy as well. If that part of the market starts to pick up, we think europe would benefit disproportionately. And finally the dollar, we saw the softening of the dollar june. H may and into we have seen it stabilized as we are getting a little bit more flight to safety defensive trade and the dollar is a safety asset class. As we get more risk on cyclical sentiment, we think europe in particular could play catchup. Outside of europe we like the china story. They were the first to get into the crisis and certainly the first to reemerge. They had the exposure to Technology Similar to the u. S. With certainly parts of semi etc. , part of, their index. We like parts of that story as well. They have played quite a bit of up 5 up, the csi 300 is year to date in line with the nasdaq. But we continue to look to europe for some value cyclical plays, look to china and asia for some more technology and growth exposure. We like both of those markets. Thank you so much. That doesnt for the closing bell. What did you miss is up next. The Trump Administrations proposal to undermine hong kongs dollar peg. This is bloomberg. Taylor from bloomberg world headquarters, i am taylor riggs. Romaine this is what did you miss. Caroline a market rally into the close, a new record high for the nasdaq composite. The s p 500 held higher by key tech names. Thinking of undermining of the hong kong dollar peg, some supervisors to donald trump look at options to punish china for chipping away at hong kongs freedom. The market doesnt buy it. Carlyle cofounder David Rubenstein speaking with the merck ceo on the race to find a virus vaccine. All that and more coming up. Lets get right to it, hong kong. Taylor, take it away. Taylor it is a wednesday and my lucky day because i get to mention one, two and three standard deviations i created. Theook at this relative hong kong dollar to the american dollar, muted, within standard deviation in the past few months. I am curious how long the muted Market Reaction last given the trump lasts given the Trump Administration could unpaid the hong kong could unpeg the hong kong dollar. We bring in alan ruskin. Is the market correctly pricing in a lack of a plan here that we will see relative to the hong kong dollar . The market is certainly sanguine. You look at hong kongs and the hong kong dollar volume market and all of them are sending the same signal, they are not treating this report seriously. I think it makes sense. The United States can say can sanction countries and penalize individuals and institutions but one has to ask is this in the United States interest . Kongers drive hong closer to china which is not with the u. S. Is trying to do. I think the market is right to take a sanguine view on things. Romaine they are shrugging this off. This is notint out worked up to the top levels of the Treasury Department as far as an idea. Im curious about the relationship between the hong kong dollar and the chinese currency, the mainland chinese currency and the interplay and whether we can expect any sort of changes in that relationship given some of the moves beijing has given to assert its control over hong kong. Everybodyink it suits to keep things as they stand really. Usefulg kong dollar is in so much as hong kong has a free capital account. Pricecould use that as a into china. It is not so big they could shut off and close it off if need be. I think it is useful in that regard. If people are looking further ahead to thinking perhaps, we are slowly evolving from this one country, two systems system effectively to maybe one country , one system over the longterm, and if you have one country and one system, why dont you have one currency . The logical course is to shift gears and to say, instead of a dollar peg which we have had since 1993, why doesnt the hong kong dollar peg against the chinese yuan . That is a very logical step. Caroline how much at the moment given then peg, chinese pboc the leaders of china have not wanted to see significant weakness . Do you think that will continue . Alan china doesnt want instability emanating out. I would not make much of the seven level. If the dollar is weak, and there is a lot of downward pressure on dollarchina, the seven level will go. There is the case that right now you have got a lot of Interest Rate support for the chinese currency. U. S. Interest rates have come ,own, chinese Interest Rates going up significantly and Interest Rate differential phases currency appreciation rather than depreciation. Guest wasr last talking about this and said the appropriate way to punish china would be sanctions, not by a currency. Do you agree, or is currency play the correct way to punish hong kong or china . I dont think currency is the logical choice. How does it directly impact china . One has to ask that question. There are other mechanisms in politicians country month but that is not my place. Romaine a lot of the talk is about the fed support, the fed has been for lack of a better word injected into this market but it has provided more confidence for risk asset investors. We have seen appreciation in risk assets in china, hong kong as well. I am curious as to whether the actions i the pboc, Monetary Policy have had the same amounts assets ts on u. S. Alan surprisingly the pboc has taken a tight line through this crisis. We have had a complete role reversal to 2008 where the pboc was taking the lead in terms of generating considerable amounts of credit. This time around it is the Federal Reserve has taken the lead. The pboc can lean on the fed. The fed has come through strongly, not just the fed by u. S. Treasury and fiscal stimulus. To some extent they can lean on the fed to take the lead with risky assets. It is supportive for china and other emergingmarket countries in asia. Romaine always great to get your insights. Alan ruskin at Deutsche Bank security. Bringing you quick breaking news, costco, the bigbox jim,or retailer for retail rising 11. 5 . June, retail rising 11. 5 . We will try to get you a better read with how that compares with the prior month from a year ago. Coming up on the program, more room for shorting . We will have a conversation with a managing partner about where investors may be missing out. This is bloomberg. Romaine lets take you back to march because there was a threeyear low back on mark streit third. March 23. There is still room for more. Next guest is a managing partner at the Data Analytics company s3 partners. They put out data on shorts and general liquidity, bob sloan joining us, great to have you on. We have been talking a lot about whether this runup we had off of the march lows in u. S. Equity markets had a lot to do with folks covering short positions and whether that has been a big part of the reason the rally continues to move on. Based on what you see, are you seeing a lot of short positioning . What are you seeing with regards to liquidity . Bob thank you for having me on. I think the rally is more broadbased. Because of the fact that price discovery is at Federal Reserve, recovery that the is happening, a lot of the names that are shorted are persistently shorted. They are favorites like tesla and there is things like apple that have become a proxy for the that theyrket represent. But things like gamestop, which is a heavily shorted name, that is moving quite a bit into the rally. You had water card as well, where you have seen no amount of Federal Reserve money or ecb money or government regulation can make people get out of that name. Use our data, because really if you are a long investor or short investor, you have to validate your thesis. It is all about validating that thesis and creating a thesis and you have to look at the whole picture and you can use data and analytics. Caroline talking about the picture, talk us through what is happening with shortage of indices or etfs rather than one off names. Why that is the sp being heavily shorted. Is that some odd way of hedging your exposure . Why are people getting short that particular etf . Overall easier for the marketplace. But another is srt. One of the things we love at s3 is we consider ourselves financial detectives. That definition was really made during it is not relevant to the way things trade today. So the definition is outstanding shares minus the locked up shares. Today you have to include shortages in that definition. You will be something you will see some things that are not logical. If you look at the standard measures, you will see that of float. S like 246 you cant drink 2. 5 gallons of milk out of a gallon jug. There is a lot of things in the Financial Markets that dont make sense, and people use our analytics to make them make sense so they can right size their bets in figure out when to enter and exit the marketplace. Taylor when we talk about rightsizing the bets, i am curious if people are shorting stocks or just buying hedge to put downside risk. Do you have any indication how they are hedging to the downside . Bob i mentioned gamestop before. If you look at that float number, we think that people are missing an opportunity. If you look at the number, it says 97 Short Interest to float. What that means is you cant short that. The real number is about 50 . One or two things are true. Either you dont have the right size bet relative to float or you have missed an opportunity because there is more capacity to shorts because the float number is wrong. If you have our analytics and data, you can understand that. One of the sectors that has been on fire, a lot of speculation about moderna is one of the names that was flight. I that was flagged. I wonder what you are seeing. Bob we are all rooting for a vaccine. You can bet against companies that are trying to be the first. What Capital Markets are saying, a race to be first, second place is last. If you look at that, the data, pricee the stock rises is going to the moon but there is a counter narrative. You have to be aware of this stock is all or nothing play. Either the company is the first, gets the cure and the stock price goes higher, or it does not and it falls for civic to sleep. Way you i love the talk about you are a detective and how using data can show you that. Where for us if you will the market is leaning. We have asked you about the hedging positions and the nuances within that. Do you get the feeling with a level of elevated shorts a lot of people are not buying this rally . Bob i think so. It is hard to be short. We doing is a very a lot of other things besides track shortselling. Shortselling is a difficult job. You come in and basically you are going to lose quite a bit. Or twoceed maybe one days out of 240 some odd trading days out of the year. It takes strong mentality to know you are right but the market says you are wrong. You are seeing that now. Caroline i wish we had more time. Bob sloan, s3 managing partners. Really interesting conversation. We have got more blake more breaking news. Ivy league is canceling all sports for the upcoming semester. They led the way for canceling sports in march. What does it mean for the fall . The ivy league is not very dependent on sports for money, but will it be a question of affect for the rest of the schools out there . Schools out there . Merck ceo going to be joining us. That is up next. He will be talking with David Rubenstein from carlyle group. This is bloomberg. Ceo ken frazier the merck ceo ken frazier joins David Rubenstein. David the ceo and chairman of mark is my special guest. Thank you very much for doing this. Ken it is a pleasure. David you are surrounded by things that look like merck products. Are you in your office . Ken i am. I try to come here three days at a minimum. David have you been working remotely during the crisis . Ken i have been working a mixture of both. I like to be around my family and spouse, but we still have a lot of people left to work here. We have 17,000 people working in laboratories or production facilities. It makes sense to show up every once in a while. David if you are a Pharmaceutical Company, especially one working on covid19 back scenes, do you need vaccines, do you need permission . Ken no state troopers ever stop me. David lets talk about vaccines. Merck is one of the great vaccine manufacturers of the world. You were among the original people that did the measles vaccine, ebola vaccine. When the government of the u. S. Announced they would give money to five companies to come up not onecines, you were of them. Is there a reason you did not want to be in that program . Ken we got a little bit of money from the program, about 38 million. Our approach to coming up with vaccines is we try to make sure we are focused only on the science. Funding considerations are secondary. We are working on two different vaccines. Both of those have certain things in common, first of which is they both cap confer protection with it can confer protection with a single dose. Both of them give the promise of being able to be deployed broadly. And there has never been one vaccine that had to be given to every person on the earth in history. We wanted to use proven platforms. If you think about a vaccine, lets give an analogy, front end of the vaccine is the antigen, which stimulates the immune system against a particular virus, in this case sars cov 2 area that gets plugged into a platform which is like the hardware. The two platforms we have chosen have already been approved by the fda in different contexts. One is the measles virus platform. You mentioned that before. It is given to millions around the world safely. The second is a different virus platform which we used in the ebola vaccines. For us it was important to be able to work with proven platforms we know are safe and effective and have been used in many people. Rna being usedr by moderna, are you comfortable that could work, or are you not sure . Ken that is not one we are pursuing. One of the great things about this covid19 vaccine situation, different programs with different technologies. Messenger rna, some people think that will promise speed. For us, we want to have a proven platform and have confidence a vaccine can be done with one dose. Merck has a lot of experience with a vaccine that is a wea kened virus vaccine. That is what we have done before, that is what we know. David some of the companies have been given billions by the federal government. Is that unfair for someone like you who has gotten used to speaking a modest amount . Ken i will say i dont care, but we want to be able to pursue this in a scientifically rigorous, orderly way. If we are able to come forward with a vaccine, and we are confident we will come of the funding will be th