Who outperforms when it comes to the smallcap. Taylor we tech about the theme of the week, theme of the month. Back into gold and further out of dollar weakness. I heard you ask that really smart question about the dollar a few institutional banks trying to question that idea. That, thatr told you the dollar is for now still the reserve currency, at least in his lifetime. Big picture when we talk about flows, that will be one to watch. Romaine lets bring in linda. We are inthis market right now, at least off some of the record highs of the industry . Is this a market you want to buy and hold or do you become more of a trader in this environment . Linda i dont believe that any of us are particularly any good at being traders. It is an unprecedented time we are living in right now. We still have very high unemployment. We would like to have more belief that the virus is under control. I think powell made that comment to us as well, that the virus is going to decide much of this. Bulls on the stock market because we believe this is going to be a temporary thing. Our policies are doing the right thing to bridge us through these tough times. Idea, ever heard the dont fight the fed, do the math. All around the globe, dont fight the fed. Very dangerous to be a bear in here. Taylor i know you are bringing us from the perspective of an investor, but you are also talking about bonds earlier. Thehe fed is in investmentgrade bond market, if you cant fight the fed come also have to be in that bond market. Linda we would never suggest anyone has to be completely out of the bond market. Are we rooting for yields to go negative . Yields are very, very low. It is tough to get bullish about investing in sovereign bonds, particularly for the negative ones out throughout the world. Heighteneding for is Inflation Expectations which is hopefully what the weakening dollar partly indicates and what goals going up partly indicates. Growth back value and forth has been going on, people thinking this is it, this is it. If it really where it, then you want to get seriously bullish on stocks. Onoline seriously bullish u. S. Stocks . Weakening, time to look outside what has been the winning trait of the decade, staying home . That all one believed around the world we were going to get out of this virus situation. And we feel dont fight the Central Banks all around the globe, you have better value. If you believe the dollar is really starting a decline after being up so strongly, even emerging markets look very interesting. It is very bullish for europe, area to such a thick invest in. They are working together in unison to borrow money, to put them in the country that needs the most. That is great news for europe and great news all around. Been team usa for at least 10 years now. Romaine always great to have you. Linda duessel. Earnings crossing the wire right now after the bell. Numbers of course, to q coming in above estimates. Of . 70. S the estimate adjusted eps numbers coming in at 86. 70. 70 tion, 86 versus the versus the 70 estimate. The midpoint of analyst estimates was for 113. Caroline fascinating. Keeping us on the theme of tech, breaking down the qualcomm numbers. Lets say that does it for the closing bell. Whatd you miss . Is next. We will be getting reaction from other movers and shakers in washington. Today is all about the technology leadership. Both markwould seem, zuckerberg and the amazon Ceo Jeff Bezos a little bit rattled from some of the democratic question coming from jayapal. A Silicon Valley lawyer will be joining us. Microsoft, oracle, and the like, he can give us his experience on what he thinks is currently being achieved or not achieved on capitol hill. This is bloomberg. Caroline from bloombergs World Headquarters in new york, i am caroline hyde. Taylor im taylor riggs. Romaine im romaine bostick. This is whatd you miss . Caroline tech stocks leading higher. Applekes of amazon and the and questioned on the hill but also being able to lead the charge on the s p 500. The fed stands packed. The central bank leaves rates and guidance unchanged. The path of the economy will shape the source of the virus. Has your kitchen become your own workstation . We speak with the ceo of one of the Worlds Largest content delivery platforms. Romaine great narrative going on with akamai and they work from home stocks. Qualcomm, of course tied completely to that 5g rollout, they are out with earnings. Eps number coming in at . 86 versus an estimate of . 70. They did give a forecast. Range, shipments, the 145165. The company did so to reiterate some of the process on 5g and announcing a huawei license deal. , apple as itsed biggest supplier, up in after hours trading, adjusted eps at 150. Not giving guidance but q2 revenue coming in well above estimates at about 155 million. Teledock, one of those stayathome type of stocks that had really gotten a big pop, quarter ebitda for the coming in just above what the street was expecting. Not just earnings, but what is happening in terms of lawmaking. Lawmakers have been questioning all day the big tex ceos. Are all abouts connection and our Business Model is advertising. We have faced intense competition in both. We have fierce competition on the developer side and customer side. It is so competitive, i would describe it as a street fight for market share. Vigorous competition, be it travel, real estate. We dont have a dominant share in any market or any category where we do business. History shows that if we dont keep innovating, history will replace every company here today. Four big antitrust battles. Gary reback, great to have you with us. They are talking about competition, trying to fend off the argument that they dont have enough competition. Very much part of them coming down on lines of privacy, the alleged liberal bias. Are the questions landing today . Gary i think so. The clips you showed were from the opening statements, where they were not questioned as they were given those statements. The questioning started very harshly, in my view, particularly the democratic members of the committee, reading internal documents that they have received and contradicting the ceos. So, it was a very difficult , for thesion, i think ceo of google. Then the committee focused on mr. Bezos specifically. Lets focus on tim cook. Romaine pramila jayapal, who of course represents the district in seattle that includes amazons headquarters seemed to have the most pointed criticism during the hearing. Evidencethe anecdotal , thatas been out there amazon has in some way taken and usurped their products. Is this a line of questioning that could come back to bite amazon . Seattlengresswoman from , in the past, they have tried to push her around. She has ended up being a very harsh critic. The chairman. Did the gist of the argument is that amazon uses the confidential data that these merchants provide through their platform. Amazon get that information and uses it to make competing products, in effect uses it against the very merchants on their platform. Denied thatnally undergrowth. Day andad a field denied this. , his position basically was, we are looking at it. He has had months to look at it but that is his position. Taylor you mentioned tim cook receiving less harsh questions. I wonder if that is because tim cook has managed to maintain a positive relationship with d. C. , with lawmakers, with the president . Is that impart what is contributing to this or is apple likely to face less antitrust and data concerns that other Companies Might be facing . Gary i think it is more the latter. You are certainly correct that mr. Cook has been out there and has fostered a great relationship with d. C. Thethis situation hearings are still going on. Of, to this point, the kinds accusations against the other three platforms are not quite the same and not quite as biting as the accusations against apple. Argue, iis able to think, that apple is simply preserving quality. He can do that anyway a way that the other platforms have difficulty doing. Caroline at the end of the day, will policymaking change any of this . Do the laws need to be rewritten . Do they need to be enforced in a harsher way . Is come is competition not Strong Enough and does it need to be tackled by lawmakers . Gary some of us in the antitrust Community Think that there needs to be better laws, new laws. Many others like me think that the first step would actually be some enforcement. As the committee has pointed out, they are violating the laws left and right. They are contradicting what their own documents say. Then why hasnt the government sued them to this point . I think they are fearful of a lawsuit because unlike lawmaking, a lawsuit is conducted in the public. The press covers it. The ceo would be crossexamined in an open court. But if you are not going to enforce the existing law, perhaps the best alternative is to create a new law. Romaine gary reback giving us that halftime report. That hearing of course still going on in washington, virtually at least, at the House Committee. Atpayments volume coming in 221. 7 billion, above the street estimate of about 208. Paypal saying this is their strongest courtly performance in their history. We will double check that, of course. We will be back in a moment. From new york, this is bloomberg. We remain committed to using our tools to doing what we can and for as long as it takes to provide some relief and stability, to ensure the recovery will be as strong as possible, and to limit lasting damage to the economy. The path of the economy will depend to a large extent on the course of the virus and measures we take to keep it in check. Toont to stress, it is early to say how long that is and how sustained it will be. The effects have been especially severe for lower wage workers, for women, and for africanamericans and hispanics. The steps taken so far have made a critical difference to families, businesses, and communities across the country. The Federal Reserve has also been taking broad and forceful actions to direct credit in the economy for households, andnesses large and small, state and federal governments. There is lots of uncertainty around the development of therapeutics and vaccines. All of us want them to happen as soon as possible, but we cannot plan on that. Powell fed chair jay speaking there. Caroline had an entire fed special without you and me. Dont worry, folks, me and the 209 are back here. Chief ubs u. S. Economist. I guess the tone here was decidedly dovish. We have a fed that will make clear that it will do what it takes to keep the economy and markets going. What more can jay powell and the what they already said they would do . I think you are asking exactly the right question. I think the dangerous possibility is that they are getting close to the limits of what they can do. They have ruled out negative interest rates. They have extended lending facilities. Promised toy have keep the federal funds rate at zero on the one hand, and what they do with asset purchases. In billion per month Mortgage Backed securities. What can they do . The fed models say you ease financial conditions by pushing down longerterm rates. So, maybe they concentrate those purchases just at five years and beyond. Funds rate, you promise to hold it at zero until inflation gets back to 2 . Maybe you forecast that inflation will overshoot. These are the things they can do. It is doing a little bit more of what they are currently doing. I dont think there is that much more they can do. Caroline lets push forward to the next six weeks, when we perhaps get that framework to the review. When they do outline potentially some new tools they are willing to pull on. How important will that be dictated by the numbers we get. Tomorrows you think gdp data and the data in terms of jobless claims will paint that picture . Seth i think ultimately and i do think chair powell set the stage for the strategic review, it is just not going to be earthshaking. It is going to be an incremental change from where they are now. Partly because they already have the gas pedal floored. Partly because, with unemployment much higher than they like, getting back to what they were doing before means, lets be as accommodative as we can. There is not a whole lot of scope for them to change things a lot. I think the data coming in. I agree with chair powell that it does appear things are slowing with the rapid bounce off the bottom. I think it will allow them to get greater consensus within the committee to keep those ischases going until there material progress toward our macroeconomic goals, Something Like that. Some of them are saying, look, we had two months of strong data, maybe we will get back to the precovid levels sometime soon. If we see that data rollover, that will allow him to coalesce, lets be in for the long haul. Taylor let me impress you on that a little bit or. Some of the highfrequency data starting to roll over, do they then need to start significant yield curve targeting on the 10, the 30 year . Seth i think that is what they have left to do. I have no doubt in my mind that they have studied that extensively. You can go back to 2011, there is a memo talking about targeting different yields at different maturities. That is very well plowed ground. The reason not to target the 10 year, suppose it is successful. At some point, the market will want to sell off. Then they will transfer the entire lot over to defend. Over to the fed. I think they can up asset purchases, push them further up the curve. With the 10 year at 57 basis points, it is kind of hard to know just how much further down they will be able to go anytime soon. Romaine do we ever get to a point soon where the power of monetary policy, its effect on the market, that begins to wane . Seth absolutely. The effect on markets, probably. But i will say, yields are very, very low. Inflation expectations, the dollar is weakening. You are still seeing some reaction. I think everybody in markets pays a lot of attention to what the fed is doing. I think the real question is, what can they do to the real economy. Caroline great to have you. This is bloomberg. Romaine internet traffic has surged as the coronavirus pandemic has kept people at home, making content Delivery Networks the beneficiaries of all that bandwidth use. The biggest gain coming in clouds Security Solutions business. There is concern that the pandemic fueled growth might not be sustainable. Joining us now is the ceo and cofounder of akamai. Tom, thanks for being here today. Lets start with the surge in traffic and maybe you can give us a sense of where that surge is coming from. Is it coming from all of us watching hulu and netflix . Is it coming from the games, shopping online, zoom meetings, where . Tom all of the above. When it comes to measuring traffic by bits, video is a big cause. And the Software Updates for the gaming, those are the big drivers of bandwidth usage on the internet. Nowuring by transaction, you are looking at ecommerce and work from home. Distancelearning also a big contributor. Seeline tom, what do you in terms of the work from home trend, the learn from home trend as well . Google has decided to tell it employees they will be working from home until summer 2021. Is that what you are prepared for . Tom we are finding it very effective with remote work. We are operating just as efficiently and in some ways more efficiently. I think that is going to be a trend. We will probably be in a similar situation where we have the option to work from home through the summer next year and a lot of employees will want to do that on a more or less permanent basis. Taylor a lot of analysts are perplexed, citing a disconnect between your valuation and some of your peers. Frankly, you look undervalued. What is the market missing . What are these analysts not seeing . Tom there is a little bit of a disconnect. Obviously we are doing incredibly well. At akamai, our Security Solutions is now over 1 billion a year. We are highly profitable. We delivered operating margins of 32 . Share, up 30 er yearoveryear. The other companies you are talking about wont be profitable by their own statements for years. In terms of real growth, akamai is doing much better by far. We are the market leaders by a long way. Us bee do is helping successful going forward. We are in a position to make investments in capacity and innovation to drive future growth. While, you guys, for a kind of had this space behind the scenes, enabler of the internet space, for quite a bit. There are a lot of players now. This has become a much more visible industry. Whether it is the actual behind the scenes stuff or cloud security, things like that. Do you worry that maybe it becomes a Critical Mass for competitors . Tom i dont think so. Weve had a lot of competitors for over 15 years. Sharetinue to grow our against that competition. If you look at our growth on the revenue, just the top line, weve grown more revenue than most of those companies have in total. So, and that is because we are continuing to innovate and we have solutions that are marketleading. If we were sitting on our laurels, you would be in real trouble. We are continuing to lead the market on innovation and products. If you look at security, that is the lead driver for sales today. Caroline you are basically painting the picture of a field that you can play in openly and we are watching the ceos of amazon,facebook, and some of them using your products, some of them competing. Do you feel that more regulation is needed to level the Playing Field . Companies include some of our biggest customers, biggest partners. Weve competed against those companies for a long time. It is hard competing against a company like that with tremendous resources. The way weve done it successfully is through innovation and marketleading solutions and great attention to our customers. I do think there is a role for government, to make sure that when Companies Get to that scale and have that much market power, that it is not being abused. , allne all right, akamai the remote work going on, a big part of that. Appreciate you coming on with us. Lets get over now to Mark Crumpton with the bloomberg first word news. Mark a grim milestone in the United States. According to a tally from Johns Hopkins university, more than 150,000 people have now died from coronavirus in the United States. It is the highest offi