Republican senator inpatient as well. I cant see how we can go home failed. People we they will all have to go home at the end of the week and tell people they failed. Lisa and there is pressure from President Trump that if you dont do it, he will go at it unilaterally. You have to think that he is adding to pressure to passing this through for republicans. Also today, what am looking at, to the clock a. M. , u. S. Durable goods and factory orders. Gauge was the strongest since september 2018. Aftermarket today, disney reports earnings, expected to have a lost. But everyone looking at disney plus, what kind of traction they are getting their earnings. Did you get disney plus just to watch hamilton . Jonathan of course i did not. [laughter] lisa i am shocked. Jonathan full anyone else try to buy tiktok . Tom im glad you asked. Lets put it this way. Disney has 14 billion in cash. Billion inas 140 cash. You do the math. Jonathan i think microsoft has the money to get it done. Did you see the line from Chinese Media . The irony wont be lost on anyone. By no means except the theft of a Chinese Media company by no means accept the theft of a Chinese Media company. Apple, was a presence in china, hands off. Say . Zuckerberg, what do he i think it is well documented that the chinese steal from u. S. Companies. That is the irony of this moment. Tom i know weve got to get to Michael Purves, but i think it is so important as you mentioned mr. Zuckerberg to mention his commitment not to beijing or to washington, but to new york. His taking of the full office isce across penn station arguably the greatest statement on this island of manhattan since 9 11. It is very exciting for manhattan. Jonathan he is on a big push, that is for sure. We got to bring in the bull of the moment, Michael Purves, Tallbacken Capital Advisors ceo. I am just going to call you mr. 3650 on the. How are we getting there on the s p. How are we getting there . Michael my framework really sees that the extraordinary measures from the fed to not look at valuation on the s p 500 on an absolute basis, but really the only way i can look right now is on a relative asus. In other words, i look at the forward earnings yield, the inverse of the priceearnings ratio, and subtract the 10 year treasury yield. That gives me enough comfort to get to 3500, 3700 by the end of the year, even without an uptick in earnings estimates. That is all a fancy way of saying the fed is forcing you up risk curve into buying equities. But lets not forget, the big Cap Tech Companies have a long history of demonstrating not just higher Earnings Growth, but also a consistency of that Earnings Growth. They are such a dominant part of the s p 500 right now that i think it is really kind of more of the same here. Theres a huge footnote to this argument, which is that it on yield are to start rising higher , if we start seeing those go up through 1 , 1. 25 , this framework falls apart real fast. So this valuation, or this price target is really predicated on the continuance of a super suppressed bond yield. Tom thats right where i wanted to go. It is a great bullish call. Theres other people with the same town. It is completely predicated on the inverse pe, inverse cash flow ratio as well. Lets say you are correct and we sustain. Why do you stop at 3600 . Guess i amll, i crossing each bridge as i come to it here. For the last several years, ive had this view in this world of very low nominal gdp that as long as there is some gdp growth at these very low Interest Rates, price ratios could be supported at extreme nearly highlevel for a longer time thanks to structural disinflation, aggressive central banking, and all of that. And again, with that added component, you have these Cap Tech Companies grinding out this important Earnings Growth with less activity then you find in other sectors. So i will cross that i end of target. 1 but i do think that this framework is really important. Ie never seen in alec have never seen an equity rally as he did as the one we have been dealing with. What i advise my clients is you have to learn to love the hate. I still hunt theres an argument that theres a lot of cash sideline cash on the sidelines that will be coming in. Lisa learn to love the hate is definitely the mantra for a lot bulls right now. Bonds and stocks are sending very different messages. Your concept is predicated on the idea that the Federal Reserve will continue to go in and buy treasuries increasingly on the long end to suppress yields, even if the economy continues to grind higher, providing some sort of support. Do you think that is a crucial aspect of your recipe to get to 3650 . Michael without question it is crucial. It is critical. The massive amount of uncertainties across the landscape, theres one thing. The most important security in the world is the tenyear treasury. What powell has achieved through cuts and all of the other programs of asset building is he has not just capped the 10 year yield at very low levels. He has also smothered volatility. If you look at the june fomc, 14 of the 16 projectors of the dots had zero Interest Rates through the end of 2022. , it wasnt just a notseven or 97. Their forecasts are much more bloombergve than what had. They are becoming a little less data dependent, and i think theres a separate conversation as to whether that is healthy for the longterm economy, but to 3650 andgetting beyond, i think it is very clear that that type of overwhelming support and cohesion within the fed on these policies gives you high certainty that Interest Rates will be very low, with one big caveat. If inflation starts really climbing to a much higher level and the term premium on 10 year treasuries is young, perhaps by is yanked up, perhaps by bund yields, that could be the big wildcard. Jonathan lisa doesnt care about equities. Yesterday when she got really bored, she pinged me and said watch out for alphabet. They are issuing debt. Tom keene, i have to say, if you , it is that debt priced unbelievable. Lisa crazy. Nothing. Y costs there no other way to put it. You have to believe there will be strategic transactions based on that simple statement, money costs nothing. Jonathan weve got to let you go, Michael Purves of tallbacken advisors. Theres been this conversation about a 6040 portfolio. I think the conversation we have had increasingly is what replaces the 40 portion if you drift away from treasuries. , single a rated credit . The answer might be yes. Lisa if you are talking alphabet, you are not getting very much. What you hear a lot is that you have to go into riskier asset classes, alternative or you do you have to wonder what the longerterm consequences of this is. It is not just Investment Grade credit as you are getting basically nothing to go into the must credit worthy names. That sets it up for also to duration risk. But what are the longerterm consequences of this push into risk . Jonathan the key phrases longerterm. Fortyyear credits. 40 years in a technology company. What was around 40 years ago . More importantly, what wasnt around 40 is ago in big tech in america . Tom jon, i am watching tiktok right now. Ive got my spurs mask on. Thank you for sending that to make. Jonathan remember yesterday, we talked about the advantages of radio . [laughter] can you explain what on earth you just put on your face . Tom tom that was a spurs mask. Jonathan as in the english premier team. Tom the tots, yes. What caughtactually me. It is like lemmings over a cliff. It is like the support for the tots. Everybody is going to do it. Do 20, 30. Going to maybe the fortyyear is the new 20 year. Jonathan nothing you have said subsequently i have heard or understood. I am so confused this morning. Alongside tom keene and lisa abramowicz, im jonathan ferro. That. Ou cant say [laughter] york, this is new bloomberg. Ritika with the first word news, im ritika gupta. President trump may take executive action if congress cant agree on a new stimulus package. The president told reporters he might impose a moratorium on evictions and enact a payroll tax holiday. The white house is also exploring whether the president can act on his own to extend an Unemployment Insurance payments. President trump insists that if toks u. S. Operations are sold, the u. S. Should get a cut. It is not clear on what authority they could extract a payout. The president said tictoc would have to close in the u. S. By september 15 unless an American Company buys it. Hurricane isaias was downgraded to a Tropical Storm as it made landfall and moved inland over north carolina. It prompted Tropical Storm warnings all the way up to maine, including in manhattan. The storm doesnt pose a threat to any Major Oil Refineries or platforms. Northern ireland faces a brexit timebomb. It is according to the Northern IrelandRetail Consumer authority. Transported will require export certificates. That could add 52,000 to the cost of each shipment. Bp has cut its dividend for the first time in a decade area that removes a cornerstone of its investment in a decade. That removes a cornerstone of its investment case. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. We are really getting an understanding of each sides position, and we are making some progress on certain issues, moving closer together. There are a lot of issues that are still outstanding, but i think there is a desire to get something done as soon as we can. Jonathan Senate Minority leader Chuck Schumer with a word you havent heard much at all over the past few weeks, progress. From new york city this morning, good morning. Alongside tom keene and lisa abramowicz, im jonathan ferro. Two hours away from the cash open in new york. You can add 12 minutes to that. The equity marketing new york city, equity futures shaping up as follows. Equity futures come in at 11 on the s p, down 0. 3 . On tens,asis points aback to 0. 53 . In the fx market, premixed this morning. Interest pretty mixed this morning. The event risk on the calendar this morning. Tom theres a real deterioration in bonds that is nuanced here. 1. 0503ling you, a negative statistic for the 10 year yield talks about a slowdown in the American Economy. Right now, kevin cirilli, as we heard senator schumer. Our chief washington correspondent on what will happen today. What will happen today in these better negotiations . Kevin there was a breakthrough yesterday. We dont know precisely what the breakthrough was. We were trying to figure that out within the last 12 hours. It was significant in the shift of tone coming from Senate Minority leader Chuck Schumer, as well as speaker pelosi, who also echoed what schumer had said yesterday. Yesterdayte that also , President Trump said if there is no deal, he is willing to use executive action in order to address certain issues as it relates to this. That is almost a day or two leadership i dare to leadership in congress to say he can go longer because he can utilize exec at of orders utilize executive orders. Tom what i really want to talk about here is they solve the easy things, right . Now theyve got to figure out who gets the dog. What is that thing that is going to really slow this down . What is the dog in this debate . Jonathan kevin is lost for words. [laughter] tom thinks theres a dog involved this time around. I hate to break it to you, but in this occasion, theres no dog involved. Kevin based upon my reporting, what i can tell you is that funding for state and local governments is what is really going to be the issue here. But i think beyond that, i also from that tax credits small and mediumsized businesses is also going to be an issue that comes to the forefront, as well as something that democrats want to sell to their constituents. A democrat from california and asked him pointblank about that. Ifdrew this parallel of funding for state and local governments is not increased, and there is funding for firefighters, for individuals who work in the sanitation divisions, all of that really could cripple cities right now, which are desperately in dire need and already hurting. That i think is something that schumer, as well as speaker pelosi, are really fighting for. Of course, coupled with the Liability Protections of leader mcconnell, i think those three issues are really what is at stake here. Jonathan whatever happens in november, i believe this administration will be a case study for decades to come on executive powers. When you hear the president say things like he can do this himself, when it comes to tiktok, and he says we are going to take a slice for that, for a reporter in washington, how do you take that message . Do you just take the message and repeat it, or think about whether he can actually do those things . Kevin it is a trained in the executive branch that dates back to the obama administration. Candidate trump was very critical of former president obama for his use of executive orders, and republicans have been incredibly critical during the obama years. It was during one of former president obamas state of the Union Addresses when he noted that he would have the power of around in order to go the republican congress. That is where i think it is interesting to see the tables so significantly turned. President is saying just as much. What i find fascinating is the same criticism as it relates from a Foreign Policy yearsctive, in the obama it was uses of drones, but the president has adopted a much more economic approach in terms of using that as a preference. But the contrast is striking. The strategy and the use of executive orders is the same. Lisa jon was talking about using more executive power, perhaps building on what president obama did, but can President Trump unilaterally reinstate 600 enhanced Unemployment Benefits and preventive actions in the shortterm . Kevin he says yes. He says, who is going to stop . He makes the case that he ran as an outside candidate, and that the system in washington is broken, and he needed to do this in order to address this because democrats, he will argue, stood in his way of negotiations. Democrats on the hill will say he is wanting to be cheap, for lack of a better word, and not wanting fund in the long run some of the cities. But it is an interesting dynamic. When i talk to sources on the president s reelection campaign, they really want to have the president talking about the economy and talking about solutions. They still feel that is where he is positioned to do the strongest. Tom in the zeitgeist, theres always these little moments. I saw a snippet of a video of the senator from south carolina, mr. Graham, in columbia, talking about the c. A. R. E. S. Act and about the 600 check, and he looked nervous. What are these guys hearing when they go home . Then they are looking at university of chicago study, which has said that individuals on are earning more money unemployed and benefits, but democrats are looking at a gill study at a yale study. In terms of south carolina, would you can look at in terms of a battleground for trade with china onst automobiles, but for europe, but he is someone who is really in the mix of Foreign Policy conservatives. Hes really in a fight that he is expect it to alternately when, but he is also running for reelection. Jonathan always great to catch up. Our conversations with kevin now by saying run. [laughter] tom, i am with you. The Republican Party started to track a little bit. Started to crack a little bit. Thats the reality they face going into the weekend. Jonathan you could see it in tom you could see it in senator grahams face. Thishe Washington Post morning, brilliant on all of those academic studies. Jonathan more to come with Frances Donald of manulife. From new york city this morning, good morning. This is bloomberg surveillance , live on bloomberg tv and radio. What happens when a wireless carrier puts its customers in charge . Well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with xfinity mobile. Call, click or visit a store today. Where you can find games, news and highlights. All in one place, right on your tv. The xfinity sports zone. Use your voice to search every stat and score. Follow the teams you love. And, even get notifications with breaking news alerts and more. With the xfinity sports zone everybody wins. Now thats simple, easy, awesome. Say xfinity sports zone into your voice remote today. Jonathan from new york city, this is bloomberg surveillance. Live on bloomberg tv and radio, alongside tom keene and lisa abramowicz, im jonathan ferro. Your price action shaping up as follows. Equity futures down 10 on the s p, 0. 3 . Really strange market in g10 today. The euro up by not even 0. 1 . In the bond market, the curve steeper yesterday, flat this morning, 0. 54 . Tom this cross asset dynamic is very subtle. It is what surveillance was built on. I totally take your point on the linkage of ethics dynamics into dynamicsamics of fx into yield dynamics. The 10 year nominal rate is really trying to make a thrust lower. Jonathan in and around 50 basis points, but we have been grinding lower over the last several weeks. I think theres an interesting narrative, the european outperformance story. Tom do you see it . Jonathan we havent seen it yet in the data in a big way. Ive seen it in the market. We seen it in the euro. We havent se