Index climbing sharply higher. In the month of august, the cyclicals are leading the way on the year. It is all about tax. It is all about tech. Interesting to see how the month of august plays out. Right now a sleepy summer day. Taylor it does not look like it will be sleepily for much longer. August goes quickly. It is a volatile month. We are in an election year. Abigail it is interesting because there are lots of reasons to think we could have a volatility spike, including the fact we are in the seasonally higher volatility time, august, september, october. The vix curve speaks to a big spike in october. The panic index is at levels close to where it was prior to the selloff in february and the selloff in 2018. The fundamental backdrop for this is despite the fact we have a better initial jobless claim today, which is excellent, but it is still extraordinarily high. It is not even put the financial crisis you cannot see the numbers around the financial crisis relative to where we are right now. It comes down to stimulus. The fed is doing their job and puts tons of liquidity in the system. We need a deal out of d. C. To , itjust help the economy seems to be propping the stock market, the hope it will come through, but americans. Our team in washington are saying it could be september or october. That could create a world of hurt. There are reasons to think we could have volatility. Kevin lets continue to talk about the potential volatility from washington, d. C. Wall street may still be counting on an eventual stimulus deal, but in washington things are looking more like a stalemate. The white house and Congressional Democrats are still 1 trillion apart on the next relief package as a number of americans applying for Employment Benefits fell below one million for the First Time Since the pandemic began in march. For more insight i want to bring executive t, the ass, director of american compass. Abigail laid it out. Than oneate just fewer Million People filing for unemployment is a remarkable sign of the times. That has to put pressure on lawmakers in washington to get a deal. I do not think it is going to. It does not seem to be. Levels are so high. As this has gone on so long, we have lost the threat of the idea we would have a temporary blip that would recover quickly. People have lost their jobs six months ago even are rightly realizing there might not be a job to go back to. Some sort of action is incredibly necessary, and obviously the parties are nowhere near agreeing on anything. Oflor are you thinking some the improvement in the data we are seeing in the American Economy is taking the pressure and urgency off of congress for a compromise . Oren that seems to be the case right of center, where i think republicans, and this includes the white house, have tried to take the position the root properly the recovery is underway, and a Mission Accomplished moments, which does not make a lot of sense. The data is not as bad as in the moment of lockdown, but it is still terrible Economic Data and we are less than three months from an election. It is hard to understand that view. It is also hard to understand sayingocrats redline of we need to be paying this additional 600 a week of unemployment indefinitely, when that is more than most people would be earning in the job market. Yesterday Speaker Pelosi and secretary mnuchin trading intense political jabs with each other as it relates to criticism each had each side has with each other. For Speaker Pelosi, if you look at the 1 trillion spread, that is a hefty chunk of change even in washington, d. C. , and it is coming off of the 2 trillion that happened in the stimulus. What are the areas of compromise you see behind the scenes when you dig into the policy week that you see Speaker Pelosi say all right, here is where i am doing to give heres where i am willing to give to get a deal. My uninformed outsider view would be there should be plenty of room for compromise on the Unemployment Insurance. It is not like everybody thought 600 a week was a sensible idea when it initially passed. That was something republicans were always opposed to an a lot of neutral observers would have paused and said how did we get to that high an amount when those now paying unemployment above what most jobs pay. To beis a lot of room committed to substantial support for people outside of the job market and recognizing some of that is necessitated by our Public Health situation without sticking to a number that is hard to square with the countrys economic reality. Kevin when i speak with sources of the white house as well as sources on the president s reelection campaign, they say the president is prepared to take additional steps with executive orders if capitol hill cannot get to a deal. Do you think the executive orders the president passed will be effective or will they lead to more business and regulatory uncertainty. Ordersher executive could the president take if washington lawmakers connected to a deal . Oren i do not think executive orders make sense. As a legal matter i do not think it is appropriate for the white house to try to do these things unilaterally. That is something republicans understood when obama was taking these kinds of actions. Some republican said it was not right then and it is not right now. Game ends up being a. Ompromise in congress there is uncertain be a lot means,as done, what it there seems to be a lot of uncertain to be a what trump has done, what it means, and there is a lot of uncertainty with payroll taxes. No one knows what that means. I am an employer at american compass. Am i not supposed to withhold payroll taxes now . Or i give them back now but i might have to collect them later . It is no way to run an economy or a government, and it is certainly not the right path towards providing stability in the face of the incredible challenges we have. The role ofe is Corporate Responsibility at this moment . I was thinking of the law 85 in california which ruled uber and lyft need to convert employees to being freelancers to being fulltime workers and putting the burden on the employer. Where you see the role of Corporate Responsibility versus government at this moment . Oren at this moment there is a tremendous amount that only government can do. When youre talking about the size of a joint dollars apart on a deal. That gives you the sense of the scale resources in the pandemic. Uber is a great example. We are finally having a discussion about what we expect from corporations. For a long time the view has been does the job of the corporation to make a lot of money, and as long as they are trying to do that that will generate rate benefits for everybody else as well. The reality is that is not necessarily how it works. We want competition and free we generate outcomes will have to put restraints on corporations and make them behave responsibly. They will not just do it out of the goodness of their heart. Kevin capitalism with a conscious. It sounds like that is what youre talking about. Let me followup. It is now the time to worry about deficits . Oren i do not think this moment is a time to worry about deficits. As we do what needs to be done at this moment, we accept and acknowledge this will only heighten the need to figure something out down the road. This should not be seen as setting a precedent we be more careless next year. Kevin we will have to leave it there. ,ur thanks to oren cass executive director of american compass. Coming up, how are conservatives planning to run against the biden harris ticket. We will speak with the former chief of staff to senator mike lee, next. Ons is balance of power Bloomberg Television and radio. Kevin this is balance of power on Bloomberg Television and radio. I am Kevin Cirilli in washington. Taylor i am taylor riggs in new york. We want to go to Mark Crumpton for an update on bloomberg first word news. Mark israel and the uae have agreed to establish full diplomatic ties as part of a deal to a halt the annexation of occupied lands sought by the palestinian their future state. President trump announced the deal from the oval office earlier. President trump this is a truly historic moment. Not since the israeljordan peace treaty was signed or than 25 years ago has so much progress been made towards peace in the middle east. Uae theis makes the first arab state and the third arab nation to have diplomatic ties with israel. The fbi is stepping in to help investigate last weeks explosion in beirut. The lebanese government resigned after the blast killed more than 170 people, injured at least 6000, and caused widespread damage. It is still unclear what caused the fire responsible for igniting 3000 tons of ammonium. Itrate stored for years documents have showed the countrys leaders knew about the stockpile. On capitol hill, very little sign of compromise on the next round of pandemic relief. The two sides were at least 1 trillion apart on another relief package to help the economy recover. Nancy pelosi says she will not resume talks unless the white house budget is on its call for a 1 trillion cap on the measure. President trump continues to push for a payroll tax cut. The philippines will join a final phase of critical trials for russias coronavirus vaccine. The Prime Minister is willing to be inoculated. After the vaccines likely approval from his countrys regulators. U. S. Health officials are skeptical of his claims. It was registered before phase 3 of trials. Those tracks usually last for months and involve thousands of people. Johnson johnson will be surviving the European Union with 200 million doses of its treatment. That story broke in the last few minutes. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. This is bloomberg. Taylor . Kevin . Kevin thank you. Lets come back to d. C. One of our top stories is Presumptive Democratic president ial nominee joe biden finally has his running break his running mate, Kamala Harris of california. For how this affects President Trump strategy, lets bring in boyd matheson, former chief of strategy for a republican from utah. Thanks for joining us. I want to talk to the policy. I have led so much analysis. Is senator harris a progressive, she moderate, or do we not know . Still out on ais lot of that. There are people who are saying she is a policy person, some people are debating it she a politician or an activist . The jury is still out. She does like the policy components. There is some substance. In terms of how that will impact the ticket and impact what happens on the first tuesday of november, i do not see that being a mover. Taylor what are some of the policies, criminal justice reform, that she brings to the table, that the republicans do need to respond to . Boyd youre right. A lot of her work on the judiciary committee. On worked with senator lee caps on skilled workers. That will be interesting to see how she navigates that now is the Vice President ial running mate with joe biden. I think that will be her challenge. Looking at some of the things she has done, in particular when she was attorney general in the state of california, where she was a bit of a picker and chooser in terms of what she enforced. Some of the laws put into place, some of the referendums passed by the voters of california she chose to ignore. I think a lot of those things will require more attention. Kevin on the issue of policy, especially energy policy, one of the issues the Trump Administration wants to draw a contrast for is fracking. Toeady when i talked sources, they are quick to point out senator harris as a supporter of the Green New Deal framework initiative. How do you think that will play in battleground states in spring, pennsylvania, joe bidens hometown . Pennsylvania,ike a lot of those areas will be challenging. There is a bigger issue in terms of who is going to go after this new group, we are calling them the movable middle. These are centerleft and centerright, they are democrats or republicans, but they have disconnected because they are exhausted by all of this. Heres the interesting thing. The only way to reengage this group is by talking about community, compassion, personal responsibility, and opportunity. Kamala harris is not talking about those things. If she ends up being the attack dog for joe biden, which the Vice President ial role often is, i think that is a losing strategy for the democrats. Everybody knows what they are against. I watch this morning on every was makinge subhead the case against reelection. The American People know what you are against. They want to know what you are for and the movable middle, who will decide the election in places like pennsylvania. They want to know what you are for, are you for community, personal responsibility, and upward mobility . That is the real test. Kevin to that specific point on policy, especially as it relates to Foreign Policy, there are questions surrounding senator harriss Foreign Policy record. We know she is a supporter of the iran Nuclear Disarmament deal, something democrats are in favor of. On a date with so much news coming out of the middle east, how she would handle the middle east, how she would handle china. She has that legislation that would make it easier for the u. S. To go after chinese officials who steal intellectual property from america. Taylor lets pose that Foreign Policy perspective to boyd. It is interesting on a day like today where President Trump is helping to broker a deal between israel and the uae to help normalize relations, this is an area where perhaps the president has been more week. More weak. Critics would argue joe biden has Foreign Policy experience. How do you see the Foreign Policy an issue in this election coming into play. Out of these candidates stack up . How do these candidates stack up . Boyd a big debate coming down the home stretch was did he want a Vice President like susan rice who had more of the International Skill set . Obviously it senator harris does not have that. On a day like today where youre looking at it. Most administrations go in thinking they will focus solely on domestic policy. It is not the way the world turns. It is not the place america can hide and worry internally. It does matter. Ford experience does matter and it is something foreign experience does matter and it is something she does not bring a lot to the table on. In an unstable world, that will be a question. Kevin as you look at the broader spring to election day, we talked about this before about the dynamics of how the pandemic has placed constraints on their ability to campaign. You look at the on bursal of fortune for a democrat winning the 2020 election, it has skyrocketed from during the pandemic. This inability for President Trump, for Vice President pence, for joe biden and senator harris to get out on the campaign trail as we have to the virtual convention, it is quite Unprecedented Campaign trail territory. Boyd no question about that. I think that is playing to joe bidens advantage. This is interesting. It seems the democrats feel like the margin is good. They are in a good place, and they say lets see if we can run out the clock. We know from sports we are missing tremendously during the pandemic. Lose, youlay not to rarely win. That is a big threat and a big risk. I think everybody in the media has to start calling for joe biden to be sitting down for real interviews, not just standing in front of a teleprompter, not doing it from the basement. He has to engage. If the only one who engages in senator harris, i think that will not play well and it could hurt them into the fall. Kevin we will have to leave it there. Fascinating dynamics. Oftenou play to win, you we will find out what happens. Thanks to boyd matheson, former chief of staff to mike lee. Bloomberg tv and radio will have continuing coverage of all of the convention. That starts next week. This is bloomberg. Taylor time for the stock of the hour. Cisco systems heading to its worst day in nine years after saying pandemic weakness is not over yet. Scarlet fu has more. Decline wipess out the last three months of gains. It also has a familiar pattern, which is a post decline for cisco. The outlook was what is appointed investors. Cisco is not like the other Tech Companies in it is a close economic slow down and away peers are not. Sales may fall as much as 11 . Because falls short small and Mediumsized Companies are not spending on idea of women and services. Demand in the americas has not improved in the last 90 days. You have sales in asia and europe down 6 as well. What is interesting to meet is the big tech has all of this attention because we are seeing growth and defensive, but cisco presents as more about cyclical defense company. A large chunk of the revenue comes from governing agencies, small and mediumsized enterprises, and providers of internet and video services. Taylor wonderful. Thank you always to scarlet fu. Go to the ipowill market with fidel securities. This is bloomberg. Taylor this is balance of power on Bloomberg Television and radio. Im taylor riggs. Kevin im Kevin Cirilli. Bloomberg first word news,