Higher . Apple, facebook. Pinterest is up 36 today. Take a moment to digest. Romaine they were so quiet on that. I purchase all my thoughts there. Vital farms, the ceo on earlier. Pinterest surging advertisers and users. One of the smaller tech companies. The Advertising Market is interesting to me. Are of the businesses advertising, some are not. If there is another downturn, do they advertise . Do they not . The chiefets get to Market Strategist at prudential. I want to get into the discussion with what we saw. Oing on with the dollar there are pockets that do better with the weaker dollar. Just taking a pullback, a breather. It helps financial conditions. You always hear it has not been networking well, but perhaps it will. The weaker dollar is good for emerging markets, commodity producers, those with heavy dollardenominated debt, the weaker dollar helps them, but the emerging markets if you look at the indexes, it is about china, 40 of any index. Anetheless, it should provide tailwind for emerging markets within the u. S. And good for the materials names, the companies, should be good for exporters. Exporters need demand. Global we dont have demand picking up dramatically. When it does come a weaker dollar should help them. Ou have a stronger euro if you look at germany, the germans want a weaker euro because they are major exporters. On ae weaker tradeweighted basis. You have a Federal Reserve that is intent on lower for much longer, and you also have at the same time concerns over growth in the u. S. Get will continue until we to the other side of this pandemic and see whether or not the government is repaired to cushion the downside for the u. S. Consumer. That helps to push the u. S. Dollar down. Nonetheless, any volatility in the market, geopolitical affairs, the dollar prices. It will still be the currency, along with gold, you want to be in. Gold up 0. 9 today. Factoecoming the new de hedge over bonds, they get you nothing. It has been. You are seeing the cryptocurrencies joining the move higher, and poor mans gold, known as silver, also moving higher. Gold has so many narratives, but seeingrative is perhaps all this fiscal and monetary stimulus inciting inflation at some point. Hedge serves as a gold also serves as a hedge of we see tensions rise, and also questions over the election. Election, the last election, where everyone thought Hillary Clinton was going to win and trump turned out to be ,resident trump, gold got a bid the treasuries, thinking this is armageddon, and gold has that role when there is concern, but concerned about inflation. We have seen Central Bank Buying of gold, and also chatter , the honghong kong kong dollar. Whether or not Mainland China changes that, and we have a gold situation there, so gold has many narratives. The one that is not helping is the retail buying of gold and jewelry, china or india. That will come back when the Global Economy moves, and there will be a pullback in gold. The weekends will sell the could be margin calls in gold and silver, but the trajectory is up. Great to get your analysis across the markets. Meanwhile, now that does it for the closing bell. Whatd you miss . Is next. I am caroline hyde. I am taylor riggs. I am romaine bostick. Hopes, up,isk on, the most since the month, the best since april. Lets look at the deepest recession on record. Area falling. The u. K. Putting easing on hold. Ti osoft in talks to buy ktok. This hour. Igh in all that and more. Taylor, take it away. Area gdpntioned euro off 12 . Come inside my terminal. Number,hat u. S. Gdp showing a 35 drop. We got some china data. All this putting into question the global recovery. Estimates looking at at 2020 dropped, then hoping for again in 2021. For more, we are joined by our guest. Bill, thinking about the gdp data, how are you looking at the u. S. Recovery relative to europe and china . Bill all this talk has created complacency. They seem to be better in terms of treatments and containing the spread, but european economies have been structurally slow to grow, and now there is a new globalization, where supply chains are much less globalize. They are dependent on china. We saw chinas Industrial Production has gone up, but domestic demand is faltering, so there is a lot of question about whether the demand sign will be there to support it. There are doubts about that. In the u. S. , we need to worry about how it domestic demand will be bolstered by the fiscal package. Romaine with regards to the fiscal policy, when you fold Monetary Policy to stabilize economys overall, overall, isies there the thought that tools for policymakers have run their course and you have to come up with something new, Something Different . Bill the fed put out new approaches to policy, not just low Interest Rates and flooding markets with liquidity. C worried about making sure debt markets can function and channel the funds to the right places. Packages and policies in place, the Balance Sheet looks like it has stalled and starting to contract, so we have to worry whether the fed is transmissionright channels in this postcovid environment. I dont think they are. People dont want to borrow unless there is demand because people are afraid of spending the way they used to, so the tool we need to put in place is doing a lot of, what others have done, by equities to support markets, because it is through ownership that we can have the innovations to transform our economy. We need innovations, not lenders who say i dont want to innovate because i want to make sure i get my money back. Caroline we have seen the fed by corporate debt. , one pointang apple 7 trillion market cap, does not need it. Cap,. 7 trillion market does not need it. Bill i think it will be for smaller businesses. We need special purpose vehicles smallstart up and businesses like restaurants and retailers who want to innovate and say im not going to have a lot of peopleracing activities in the next several years, so lets transform ourselves and be a restaurant where i can deliver good food to people without having him come to my restaurant , but how will i pay for that . It takes equity ownership. If we have a lot of equity securitizewhy not that so it spreads the risk around and allows the fed to support the markets. Of this analysis on prices with the weaker dollar, the germaneurope economy is a big export economy, do we import higher inflation, or do we start to see increasing exports if this weaker dollar does persist . Weaker you folding in dollar analysis with inflation scenarios . Bill the fed would love to see some pressure through imported prices or whatever. I dont think that will happen. No one has Pricing Power right now. To of the things we need worry about is when the weaker dollar will be a persistent trend. The u. S. Is still the place of innovation in the Global Economy , and people look at the United States as a source of strength and safety, so as much as we have weakness in the dollar, i dont think it will be a long enough persistent trend to influence the Global Financial flows in a meaningful way. We will get a lot of speculative flows that try to take advantage of the quick jump in the exchange rate, but the real stuff that creates jobs in the long run will not be affected. Romaine we have some critical aroundtings in the fall the election in the u. S. What is the main metric policymakers will look at to assess whether the steps they have taken have been effective in whether they need to do something more or let it run its course . Bill there is talk about how long this indulgent Monetary Policy will persist. Inflatione outcome is or some combination that combines output and inflation, what our viewers need to worry theseit it is microfinancial policies of supporting debt markets. How do they measure that and know they are doing well . That is something we have no metric for an something they will have to ask themselves, are we succeeding at the microlevel getting funds with a need to go, or are these loan programs of failure and it do we need to look elsewhere, and how do we judge success and failure at the microlevel . The toolkit of the fed, and that has to be worked upon. Theine yes, and raise alarm with congressional policymakers there. Bill, great to have you on. Bill lee, chief economist at the milken institute. A quick programming note. David westins conversation with ibmy summers and the former ceo is coming up on wall street week tonight at 6 00 p. M. They will talk about economic events and antitrust issues. You dont want to miss that. We will be back in a moment. This is bloomberg. The numbers would be far worse if policymakers had not fired a bazooka, injecting trillions of dollars of support into the Global Economy. These measures have propped up markets and in bold investors to plow into riskier securities, but all that has not been enough to offset the consequences of recession. Companies are struggling to survive with little income and ballooning debt after borrowing cash to stay alive during the pandemic. Investmentgrade companies in the u. S. Sold a staggering 1. 3 trillion dollars of bonds in just the first half of the year, exceeding all of last years issuance by more than 65 billion. Caroline dont miss this special report tonight, the bankruptcy breakdown. Now to a developing story. President trump is potentially anouncing a decision to Order Company to the vest itself that tiktok. Buymicrosoft is in talks to the u. S. Operations of tiktok. Admits indst the middle of the glory, microsoft, i was also your tweets, thoughts, about how on earth you separate tiktok u. S. Part of the story that doesnt make sense is tiktok operates everywhere in the world except for china, so it is unclear why the white house would care about the tiktok operations outside of china. Tiktok, tiktok operates all but in china, so it is not clear why were talking about tiktok u. S. Versus everything being separated from ownership in china, so that is the confusing element. I dont know how you separate tiktok from everything else, when all of the technology leverages the Global Business of tiktok would seem very challenging to do that. That are lots of companies have tried to replicate the functionality that predate predecessor,he none of those have caught on. That is the magic behind tiktok. I dont know how you separate that. Romaine this is a play for that technology. Thread the Trump Administration and folks in congress seem to be pointing to is on the back end of this, you have the Chinese Government and their ability to access the data. Create aa way you can separate company where that thread to the Chinese Government is assured to not exist . Are a lot of apps that have connections to china that you use every day, games owned by chinese companies. It is unclear what makes this one singled out over all, but the larger question is no matter what President Trump or the white house once, we dont know if they will be in the white house in 90 days. It is unclear joe biden shares the same view of china and tiktok that President Trump does , so we may be putting the cart before the horse. Lot ine have learned a this country in terms of applications and their power. We saw the big tech hearings earlier this week. The reality is everything you do is being tracked and understood. It is not clear what the behavior or data that they are capturing that is so problematic or worrisome. I think it will be challenging to get rid of tiktok and shutting it down. Making it a u. S. Company as possible, not easy, but possible. Taylor microsoft went through antitrust issues two decades ago. In front oft congressional hearings this week. They have 136 billion in cash. What is a potential microsoft acquisition of tiktok mean for microsoft . Welldont know microsoft enough from a stock standpoint, but from a consumer facing, if you leave off xbox, a lot of what microsoft has done has not worked out very well. Using skype. Everyone is using zoom. Gotou look at mixer, which sold off, their competitor to twitch. You look at minecraft, which is amazing, but i dont think microsoft has meaningfully innovated. Linkedin looks like nothing has happened to it since they bought it. Microsoft has not been exactly awesome with consumerfacing tech. I can see why microsoft wants to buy it. It may not be so exciting. What it means for tiktok may not be great given microsofts history with consumerfacing internet apps. Caroline does this help anyone . Ifthere is a big difference, you were to tell me that tiktok is being shut down or severely hobbled in the u. S. , that would be very good just competitively for snap, facebook, and twitter. It is a war for consumer time, and it is an app taking a lot of peoples time. In thed help everybody consumer mobile internet sphere exist, butt did not being sold to a u. S. Company may not matter very much. It is different ownership. Caroline this is bloomberg. Thank you. Romaine breaking news on the u. S. Government debt rating, the outlook lowered to negative, saying the not look outlook has gone from stable to negative. Fitch going negative. Taylor that was 2011 during the fiscal cliff crisis, then. Oodys maintaining the aaa the reasoning for the outlook shifting to negative, fitch saying the structural strength, the size of the economy, per capita income, dynamic environment, however this reflects deterioration in u. S. Public finances in the absence of a credible, Fiscal Consolidation plan. , think of high fiscal deficits in war time, you dont worry about deficits, but later down the line, you have to address that, raising taxes, the high debt to gdp ratio. That is something Goldman Sachs mentioned as a reason for andaps for dollar weakness why the dollar may no longer be the currency of reserve. Somethingng out with on the deficit and debt. Caroline 130 of gdp. By 2021,hat they see 130 of gdp, so clearly the sounding of the alarm by fitch, one to watch in terms of the reaction of the u. S. Treasury, whether yields get pushed a little higher. It tends not to occur when you see a country such as the u. S. Get its aaa question. Lets move and return to the story in a moment, but now lets cross the world of cargo, airlines may be lower on passengers, but cargo has become a major revenue stream during the major shift in the industry. Now were joined by our guest, cofounder and managing director of cargo one, start up booking airfreight. You are receiving funds from big backers. Im interested, first and foremost, about where you see the market for cargo going. How much is the sudden desire to ship cargo at the moment and how much more difficult it has become in the slowdown in taking passengers around the world . Yeah, thank you for having me. It has grown in importance massively. 35 is being flown on planes. Thats roughly 100 billion annually. Roughly 50 of that is flown on passenger planes. You can imagine that would have a huge impact over the past couple of months with covid hitting Passenger Airlines and a ,ot of flights being canceled with 5 of capacity remaining. Have airlines that traditionally focused on passenger traffic are now seeing a major shift in strategy. They start to invest into the cargo business, as demand for increasing with trade, but more importantly, the ,redictability of supply chains thus the demand growing. While it was a byproduct for airlines for most of the past few decades, it has changed massively. That in q2, 70 of revenues now comes from cargo operations, which is crazy, compared to what it used to be. Romaine over the last few pushes, there was a huge to international trade, this ondemand Inventory System that a lot of corporations moved to, which would have benefited air cargo. We are in a recession and the political environment where we dont seem to want to play nice with each other. What do you see as the longerterm outlook against that backdrop . Airfreight is the fastest and the most reliable mode of transport. It always thrives when there is uncertainty in the economic and political climate, so we predict it will grow over the next few years. It was predicted to grow at 4. 2 . D instability we have seen in countries around the globe, Major Economies like the u. S. , china, it will add to the demand for airfreight as other modes of transport and predict ability of supply chains go down. Predict thinke change . A structural so often we are wondering how long these trends will last. What are some of those structural changes in the way you really see lasting . Airlines will have to reinvent themselves. Passenger traffic will not return to the same level, and will only gradually come back to levels that are somewhat sustainable. Airlines have to think about how and can increase revenue sustain their business. There cargo is important, bitterly the only revenue stream a lot of them have right now. Airlines have converted their passenger planes into cargo planes, taking out their seats to facilitate that increase in demand, but also to facilitate some kind of revenue into the Balance Sheets. Fantastic to have some time with you. Thank you for staying up late. We appreciate it. Now lets return to that breaking news from fitch. Romaine that aaa rating on u. S. Government debt on watch at fitch ratings, one of the three major Credit Rating companies out there, basically moving its outlook from stable to negative, still maintaining the aaa rating, but as you know, this became a big deal a few years ago during the fiscal cliff here in the United States, where s p made at the time what was the almost unthinkable move of downgrading the u. S. , which led to a huge rebuke from a lot of folks, but the u. S. Did manage to get through that. Taylor it is so interesting to hear in this press release that they are tying in the Federal Reserve as well, saying borrowing costs are able to stay low as we engage in deficit therefore rates remain low. If it goes up, how do you maintain those bo