Implications for Monetary Policy but the implications for fiscal policy. Moree longer we wait, the institutional damage. Michael collins joining us. I think that was the first question everyone asked when this job support dropped, what do these numbers mean for the talks in d. C. . Michael i dont think these numbers have any impact. They are backward looking to a large extent. The survey period ended weeks ago. The is important is trajectory of job growth over the next couple quarters. Personally, it will be really sluggish. We have had a big rebound, a and part of that rebound is over, and it will be really tough. You have the expiration of some of these programs like ppp, unemployment benefits, and that is going to weigh on income and spending. Until theyy not act have a gun to their head. Are doing well, ostensibly, the markets are improving, they are dragging their feet. Negativewill take more data for them to act in unison. Jonathan in this market, it is not pushing anyone around. Question is whether you think they have already made a policy mistake by allowing things to expire last week. Its a i dont think policy mistake, at this point. I watched your interview with larry kudlow this morning. As a policy practice, you never want to incentivize people to sit on the couch. That is a bad idea. They are trying to come up with the right blend of policies. Do you think the u. S. Can generate a recovery that will lead to higher rates . Yields aregher probably not in the cards for a while. The funds rate will be at zero four years. When they do raise the funds rate, the driver of longerterm rates, i dont think they get much above 1 probably for the next decade. Can a go from 50 basis points to 1 over the next few years . Absolutely. At those levels, it brings back buyers again. We are not that worried about the Downside Risk in the bond market. The appetite for risk assets is where real yield is now, and where rate volatility is. We can getat something to turn that around anytime soon, i dont know. To work out whether this market can break down, i think we have to work out whether the things that support it can turn around. Do you anticipate higher real yield, rate vol . Michael i love the name of your show, real yield. Over the years, we have been saying, real yields are going negative and probably will stay negative. Central banks are not necessarily overly influencing the level of rates, as much as conventional wisdom. If there were no Central Banks in the world, deposit rates would be at zero. You should have to pay to store your cash in a world where people are getting older, there is excess savings. Negative real yields are here to stay. Toathan i remember talking you and saying in 10 years time, how would we look back and think about how this market is trading . You said to me, in 10 years, you will have wished you bought a 30year treasury with a three handle. Here we are threatening to break one. Are you looking out to some yield enhancing strategy . Alphabet,edit from which would give the north of 2 . Maker,an airplane parts 3. 75year maturity with a yield of close to 9 . Pick your poison. What is it . Areael i think you supposed to do a little bit of everything but you are supposed to be in credit. You are locking in these negative real yields affectively. It is not an environment to be sitting in cash. Maybe tactically you want some dry powder. I think there will be more volatility over the next couple of quarters as the data comes in maybe a little weaker or chop year. I am personally worried about the election, not who wins, but the electoral process. I think it will be pretty ugly. Over the longterm, 5, 10 years, you do not want to own government debt, be in cash, you want to own credit. Spreads will climb tighter. Even on highquality bonds you can get almost triple the yield as a 10 year treasury. When people start doing that matt, the reach or yield accelerates. That is our primary longterm. Jonathan i can understand taking treasuries and taking something that gives you income. What people are struggling with is getting that in first correlation to risk assets. If you replace treasuries with credit, do you achieve that . What is the adequate replacement to give you that inverse correlation and move away from what bridgewater said, that asymmetric payoffs that treasuries are offering you . Michael it is tough. In a real risk off flight to quality, treasuries will behave like they have in the past. To 30year at 1. 20 will go 50. Some expectation for treasuries to provide that balanced credit. 10yearave a five or hat and dont worry about these , where or weekly moves affectively, if you look at the first half of the year, not a lot of volatility on a semiannual basis. We always think very longterm. Credit will give you a higher return on average. You have to be careful and pick your spots, but a combination of ,igh quality, medium quality put them together, and youll get a much better return than treasuries. Risk off, maybe they go down a few percent, but over the long term, they still provide diversification. Jonathan right now it is hard not to look forward to september before 10 years. We have to get to 1. 32. Here is the final week ahead. Joe biden expected to announce a running mate with just 88 days until the u. S. Election. We have a load of fed speak throughout the week. Ppi, cpi from the u. S. And china. Another round of jobless claims. And then closing up to meet with u. S. Retail sales and industrial production. Lets get to the rapidfire round and rep rings up. Wrap things up. Capitol hill, and deal or executive order . Michael deal. U. S. 10year, around 50 basis points, what do we see first, zero or 1 . Michael 1 . The questionsked to bob michele on high yields. What are we going to see first, 600 or 400 . Michael 400. Jonathan great to catch up with you, you are looking well. From new york city, that does it for us. See you next friday. This was bloomberg real yield. This is bloomberg tv. Vonnie welcome to bloomberg. Im vonnie quinn. Today we are speaking with don slater, ceo of Republic Services, Betsey Stevenson, and Eugene Scalia. As well as Vivek Ranadive. We will have a conversation about the nba. We have turned around since the posturing got a little bit more negative. The s p 500 down a third of a percent. The nasdaq down 1. 3 . 5. 5 . Down a lot of news about them, position,the dan loeb perhaps the idea that Chinese Companies will be looked at more severely by the u. S. We also got the Baker Hughes Rig count, down once more. That is weighing on oil. Down 1. 1 . Time for stock of the hour. Tencents wechat is facing political sanctions as President Trump bands u. S. Companies from doing business with these companies. Scarlet fu is looking at this. Tencent lower at the open right after President Trump signed an executive order banning not just wechat but tiktok from the u. S. In 45 days. The stated concern is data privacy and national security. We know that our tiktok, this amounts to a deadline for microsoft to buy them in a deal. For a wechat, it is not clear how this will be put into affect. s massiveat wechat inside china and around the world, and for anyone doing business in china. Users, moreillion than instagram, almost as many as facebook messenger. It is hugely influential. Is ints primary listing hong kong, and it has the biggest waiting in the hang seng index at 12 . Thenow that tech drives nasdaq higher in the u. S. , but apple is waiting is only 6 of 500, half of the weighting of tencent in hong kong. Iny also have a presence etfs and indexes. This morning, the treasury on 11 topsanctions hong kong officials, including carrie lam. Track Chinese Companies all taking a dive. Vonnie some analysts questioning the wisdom of cutting off business with china. What do the numbers tell us . The russell 2000 is outperforming bigger Multinational Companies as are presented by the s p 500, but companies with exposure to china outperform the overall market for the past five months. The earnings that we heard really bear that out. All of the reports indicate china and the asiapacific region did better than the United States and europe. If they were not gaining, they were declining less than north america. However, having said that, this is more than that. President trump has talked about reciprocity, and ian bremmer has backed that up, saying he has a good point. China does not allow google or facebook or other companies to should in china, so why the u. S. Allow others to do the same . Certainly a good point. China is a communist system, it has always been. U. S. Companies who enter china are fully aware of that. On the contrary, the u. S. Is a capitalist system. The Chinese Companies who enter here play by capitalist rules. Scarlet unless they change, and it depends on who is in power, it is not known what they do with that information. You,e not arguing with just pointing out some of the dialogue that is out there. Thank you. Still ahead, one mans trash is another investors treasure. We will speak to Republic Services ceo don slater about the companys earnings upside. This is bloomberg. Vonnie this is Bloomberg Markets. Im vonnie quinn. Industry is seeing high demand off of the pandemic, and Republic Services gave their earnings this week. Don slater is here slager is here. Last time we spoke with you, residential volumes were up and commercial volumes were down. How has that progressed through the pandemic . Don on the residential side, we have seen volumes moderate. Volumes are still up 8 in the residential space, and we will address that through ongoing contract negotiations with customers if they stay elevated. The good news is on the Small Business side, we have seen sequential improvement in volume. Month by month, we are seeing more and more waste in the containers, which means people are finding ways to go back to work. That speaks positively to consumer demand, consumption. Waste generation is a great bellwether of what is happening in the economy. We were pleased with the continued increase. Vonnie how did you manage contracts . Have you changed contracts with cities and municipalities, corporations, and will then the two change is the economy continues to reopen . We have had good success negotiating with large customers, municipalities, to do with things like inequity in recycling, unfair arrangements due to cbi no longer being a great place holder. Cpi no longer being a great place holder. We have been moving those contracts to a more favorable position. We have high confidence there. The Company Posted a great corner. We reinstituted our cash flow guidance. Which was in the range of our original guidance. 5 board approved a dividend, our 16 year in a row where we have raised the dividend. Strength and resiliency of the business and business model. We are on track to continue to serve customers. People are showing up every day, doing a great job. There is a lot of good news here in the corner. I think there is resiliency in american business. Vonnie you operate and 41 states, puerto rico, basically nationwide. Malle u. S. Plays like a with the coronavirus, how have you had to adapt in states that are closing down, reopening . Used to people are grinding it out every day. Dayservice we provide is a in, day out essential business. They are conditioned to show up every day, they continued to do it in the pandemic. We put safety ahead of everything else. While things may be shooting up in one state, they may be cooling down in another. Heating up in a large city but the rural areas are less affected. The power of our portfolio, the business mix we have, tends to carry the day for us. Local economies dont really concern us because the power of the portfolio pays dividends, so to speak. We saw that through the pandemic, we will see that through the year. Vonnie obviously, things like personal protective equipment would be important in your work, already expert on things like disinfectant. How have costs increased, what have workers been looking for . We spent about 31 million in the quarter on direct covid costs, things like extra cleaning of trucks, facilities, masks, but also taking care of our people. We did a Gift Card Program where we put an additional 50 a week in peoples pockets for a couple of months, we fed them, encouraged them to spend those gift cards with local customers, so we did our own version of helping the local economy. Costs willse continue, we will have escalated costs with cleaning facilities, trucks. Our people are used to working in a regulated environment, used a working in and around compliant situation with ppe and safety. They have adapted great. Most of our drivers and frontline people work alone, so keeping them six feet apart has not been a problem for us. You employ upwards of 35,000 people, you can bring on people at short notice when you need to. How has her labor force changed because of covid . Do you imagine any layoffs, an effort to consolidate costs, anything like that going forward, as most corporations are doing . Don we have had about 28,000 of those 30,000 employees that are frontline. Those are drivers, technicians, people that cannot work from home. They have to go out and get it done every day. The people that work in support capacity in our business, we have done a great job working from home. Customer service centers, accounting people all working from home today, we just have a Skeleton Group at headquarters. We are talking about how we can bring those people back. We are going to play it by year. Says there is no prize for being first. We are going to learn from everyone else. The good news is, closing the books, we are collecting receivables, we are paying the vendors, we are doing all the things we need to do, and we are doing it remotely and virtually, and we are learning about how we can do business better. Those efficiencies will carry through into the future. Who is accepting our trash these days . China is not as amenable as before. Recycling is what you are referring to, i believe. We handle over 100 tons of trash annually. Close to 10 of that is divergent from landfills. A large percentage of that is recycling. Most of that is paper fiber. Less than 1 of our recycling to china, ritually none. Frankly, the majority of our recyclables stay domestic. Withd done a great job chinas change in contamination levels and so forth, with keeping that material moving, getting it collected efficiently, recycling ethically. We have found great outlets. China opens door to more recycling, if they want to continue to pay more for material, we will look at that. Right now, prices for recycling are escalated because of all the demand for paper products. Sanitizing wipes, paper towels. Thank you so much. An interesting business to be in these days, always really. Don slager, or public services. Betsey stevenson will be talking us through the nonfarm payrolls report. This is bloomberg. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. But what if you could stdo better than that . K. Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Mark im Mark Crumpton with bloomberg first word news. In beirut, rescue teams are continuing the grim task of recovering bodies. Sentsive explosion tuesday a wave of destruction through the capital. Nearly 150 people were killed, more than 5000 wounded. The blast was apparently caused by the ignition of more than 2700 tons of Ammonium Nitrate that was improperly stored. The onlycity will be major u. S. School system to hold in person classes this fall, after Governor Cuomo said classrooms statewide can remain open with tight precautions. The teachers unions have been lobbying heavily against in person schooling, citing health risks for staff and students, and budget constraints. Parents of new york city students can opt out, starting the year with remote learning. Spacex successfully launched dozens of starlike internet satellites and two earth imaging satellites into orbit today. A falcon nine rocket lifted off from florida. This is their tent starling commissioned since 2019 and the companies 12th Overall Mission this year. Thousands in britain are seeking refuge from the heat, mobbing parks and beaches despite social distancing orders in place. With the pandemic urban residents ability to travel abroad, local getaways have become popular. O, is seeing the mercury rise with high temperatures topping 105. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Amanda live from toronto, i am amanda lang. Vonnie im vonnie quinn in new york. We are joined by our bloomberg and Bnn Bloomberg audiences. Here are the top stories we are following from around the world. Signs of life may be in the labor market, the u. S. Market in july. 76 jobs the Unemployment Rate down to 10. 2 . We will discuss the state of the economy with Betsey Stevenson with the university of michigan. While the job report is better than expected, the gains may be fleeting without a new stimulus deal. We will speak to labor secretary Eugene Scalia. To Vivek Ranadive about his new bank check company. From bow capital and of the sacramento kings. The markets may be most preoccupied with the stimulus talks happening in washington. Steve mnuchin