Options. The 30 year seemed to not go as well as planned. Your getting a huge lift up in yields. The last week, we are up 15 basis points. You are starting to see a repricing underway. Romaine we did have another ipo today. We had qe holdings which is a Chinese Company that did debut, up 87 on the day. There is risk appetite, people are picking and choosing bets as anthony was alluding to. Lets bring him back into the conversation. Global strategist at a mayor price. Se. N you look ameripri when you look at the bond market and the positioning of yields here in the idea that a lot of the runup we have seen to risk assets is at least in part due to the record low yields, do you worry if we see a Material Movement up in yields, the selloff in the treasuries continuing, that would have any tangible effect on equities . Anthony it could. Not something that keeps me up at night. The main drivers are trends in the economy, in the environ in the virus, and if we will get a vaccine by the end of this year. Those are the big drivers of stock prices. They will dictate the trajectory of earnings and the amount of Economic Activity. I believe with yields so low, it is the tina trade. There is no other alternative for investors seeking drugs growth and yield. For the value and cyclical names and financials and industrials, some of those have good yields. I think it is pushing investors out the risk curve to look at these equities with dividend yields, as opposed to looking at highquality bonds and 10 year treasury. One of the things we have been watching is the default rates rising. Default rates at the end of july were around to explain what percent for highyield beer that is above the 2. 4 we saw a year ago. Even though we have this massive stimulus that is helping support some of these lower rated companies, you are starting to see defaults rise a little bit. Asm a concern perspective, investors have been pushed out, you are seeing the metrics that maybe kind of go against that. You have to take a very balanced , highquality approach. Whether that is in equities or fixed income, to maybe mitigate the volatility or pressure we may see if you dont see the trends in the virus improve materially. We dont get a virus in the back half of the year, or you dont see Economic Activity and unemployment drop to the levels investors have priced into equities. That is a risk you have to be cognizant of. It is a risk you have to motivate mitigate through diversification and highquality assets. Many have been looking at the quality by passing through earnings in particular. We see that out of the chip sector, i have been bullied around by the u. S. And china today, chip equipment maker, it supplies samsung, they seem to be beating. Fourth quarter net sales beating estimates. They are seeing fourthquarter net sales to be 4. 4 billion. The market was looking for 4. 4 billion overall. They are setting sites for for guidance higher. The thirdquarter numbers at a beach. The . 95beat versus estimate. This is a beat versus the . 95 estimate. It has helped still a mark steer the market. Anthony i think the final numbers are not in. 500 Companies Beat earnings expectations in q2, and the analyst took down those expectations to the floor. Looking out into q3 and looking at 24, you can see analyst estimates creeping up. The lower hurdle is starting to come up. There is still room for companies to over earned what analysts are estimating if we see the recovery. From an earnings perspective, there is opportunity for companies to surpass those estimates. See believe you need to in employment start to improve. You need to see spending continue, get the retail sales number, mobility trends, need activity in the economy to drive those earnings. 2021,k looking out to that is the biggest risk because based on 2021 earnings, the market is saying we will be back to prepandemic levels. That is still a difficult pill to swallow, if we see a slow and choppy recovery. The markets trading in 2021, and those estimates are still high. Caroline always great to get your voice. Global market strategist. That doesnt for the closing bell does it for the closing bell. We will look at earnings from baidu. This is bloomberg. Is is bloomberg. Caroline bloomberg world headquarters. I am caroline hyde. , i market thatss fizzled once again. The s p 500 moving away from the record alltime high we managed to pierce yesterday. It was google on the higher side but cisco leading a slower with microsoft. The u. S. Jobless claims falling below one million from the first time of the pandemic. But it is still Many Americans collecting unemployment benefits. No stimulus agreement insight. Commodities, silver has been on the rise. The precious metal jumping at one point the most since december poi 2014. All of that and more coming up. Take it through the jobs breakdown for us. Taylor some good news, but still a long ways to go. Initial jobless claims falling below one million. That is going back down to below one million for the First Time Since march. Continuing claims, 15. 5 million, the lowest since april. The good news is decline was broadbased across the states. I will bring in constance hunter. Some goodike we had milestones today, but there is still a long way to go. Amazing what we are saying under one million initial jobless claims is good news, but we always look at the second derivative, what is the change . The change from the prior week is a part a positive change. The change from a month ago is positive. We are moving in the right direction even if it is not as swiftly as everybody would like. We have been looking at a lot of highfrequency data. One of the things we are seeing in thert of plateau data. We are not seeing it fall back down. For nowld suggest that we are not going to go back to the severe job losses that we saw earlier in the pandemic. Romaine so we dont go back to those job losses. The trajectory has been encouraging on the top line numbers. Question is, when or if when do we get back to a level that would be commensurate with priore saw in employment to the crisis . Constance we are years away from that. I think so. Lets look at the opentable data. In the best case, we have restaurants that are 25 below previous years capacity. That is a handful of cities. If you are running a restaurant, you cant run below 97 capacity day after day. The margins are not there. There is not sufficient assistance to help those bridge to the other side, what we will , and there closures most effective businesses. What we do see perverts of the for certain parts of the industry is to work more safely than we had first anticipated, so those that can operate in this environment in a modified way and continue, that is a better outcome than anticipated. What we will see as the higher wall firewall we tried to build is beginning to break down. We will see this lead into other sectors. That have not yet an impacted, like in a normal recession. You see employment as a lagging indicator. Caroline it is a false sense of security. We will have to brace ourselves for the august numbers and onward . Constance our initial read, and we are using we are trained leading with triangulating with data is we will see improvement in august. September and october, what will happen with School Opening . For a lot of people, that have to go to work, that cant work from home, if their child, their children are not in education all day, it poses a lot of challenges. We saw that in the quit rate, the jolts numbers. We will see at once we get into september timeframe if we dont have full school reopening. Which it doesnt look like we will have. Taylor what is the sense of urgency in congress after this jobs report to act, to come to an agreement . Who blinks first . Constance i would not be surprised if we are going to need a response from the markets like we had after the first part p vote, where they said no way, is that going to be your final decision . I would not be surprised if we will need some sort of feedback loop to jolt congress into taking action that they seem to , and thent to take willingness to compromise in the public statements has broken down significantly. What i hear from people is behind the scenes there is more progress and cooperation than one would believe from the public statements but not enough to get a deal across. Romaine with regards to the job recovery here, can you talk about it quickly on a geographic basis and whether the job gains are going to reflect some of the shifts we have seen in people moving to suburban areas or out of the urban centers . Constance that is an excellent question. We are seeing suburban areas that are adjacent to urban areas, really flourish. ,f your adjacent to a large densely populated urban area, we are seeing significant bump in real estate in suburban areas and obviously in employment, in a variety of Different Services , whichist in these areas is to be expected. We are seeing this shift in activity. The question is what will happen going forward. If you look at online store sales, they have been positive. You have seen a big increase in Home Improvement door sales. There are parts of retail that are holding their own. If you look at job losses in the pandemic compared to the level natural crisis, we have lost retail jobs, but not as many as we lost during the Global Financial crisis. Romaine it will be interesting to see how it all plays out. That is constance hunter, the chief economist at kpmg. This is bloomberg. Riding a lot of hopes on a coronavirus vaccine. The ceo of novartis says we might wait until 2021 to get the vaccine. We heard earlier from the ceo of that company. Our efforts are focused on treatments. We have Clinical Trials and multiple experts efforts for studies. We have a broad, internal Research Effort to look at novel medicines. But we are not looking at this as a driver. We are doing it for a humanitarian standpoint. We committed to provide 15 medicines at no profit to 79 countries the w. H. O. Recommends for the treatment of coronavirus patients that includes one of the medicines that is shown to have a mortality benefit. I believe many of the companies in our industry with respect to vaccines have committed to doing this more on a humanitarian basis. I think we are all in this together as a Global Community novartis is try to do its part. Vaccineve had plenty of news or updates on progress on Companies Like moderna and astrazeneca. Wayful yet cautious is the a number of commentators have described how they feel about the story. Would that be a Fair Assessment . What about timescales . Been a decade has working in vaccines. When i look at the data, i would say hopeful but important we remain data driven and sciencebased and cautious. Many instances where we see strong immune responses in phase one Clinical Trials that dont translate into real World African the in phase three. Clinical trials in phase three. Lets move on to the business headlines are you. We are looking at the parent of mercedesbenz. They have reached an agreement to settle the emissions cases. Cars andrs 250,000 vans. They also reached one for the consumer action suit. Industrial equipment maker expanding further into the digital world. They have agreed to buy one company. Capital. Ed by thing baincapital. That is your business flash update. Romaine another big story, this is involving apple and epic games. Ofc games is accusing apple anticompetitive conduct. They raised information about the dominance of apple and google. It is a duopoly. They control 100 of the smartphone market, or Something Like 99. 9 . Apple has the majority of revenue in a lot of territories. Other countries, google as the majority. It is impossible to look at a territory and say in this space, apple or google is not a monopoly. They have business actresses that only a monopoly to get away with. More, we wantwith to bring in a bloomberg victim opinion columnist who has been covering apple and the Tech Industry and the issues surrounding it. Thank you for being with us. I want to get your thoughts on some of the scrutiny apple has been under, with regards to the app store practices and the in App Purchases and the pushback developers and app makers seem to be trying to nudge apple on. Now you have epic games, a heavyweight company, saying this is an antitrust issue. Yes. In june, the e. U. Filed two probes into apple, one on apple day and also this instance of the 30 cut they take of Digital Services sold on the platform. A lot of developers including epic games believe 30 is too high. The main thing apple does with transactionis 30 fee and it is 10 times more other alternative systems. They are arguing too much, we should be allowed to point to other ways to buy Digital Content strategists services on platforms so consumers dont have to be affected as much. And you were looking into some of apples practices in the e. U. Apple is facing more and more scrutiny. How does this play out . This is a marketing thing. He knew that putting this cheaper plan inside the fortnite app, they would remove it. They posted the legal papers they are filing, anticompetitive trust lawsuit against them. This is almost like a stunt where they knew the press would be all over this and coming to regulators, saying you guys need to move on this. The Apple App Store was the focus of the hearing by the house subcommittee a week or two ago. It. E. U. Is looking at they say you guys need to look at this business practice, it is too aggressive. We need help. I dont think they will win the lawsuit in courts, but they are bringing this issue to the forefront for the e. U. And the u. S. Congress to change the laws , to put more policies out there that are against the anticompetitive practices. Taylor apple seems to shrug all. F this off this comes on a day when they are bundling their services, of which you have been writing about, partly the apple arcade gaming service, bundling it into one subscription service. Is this a play on gaming . How do you see the competition . It is like wait a minute, how come apple gets 30 of revenue, and in a lot of ways they are competing with us, with apple arcade, netflix, tv, all of these things that rely on the app store for distribution and payment, one do we have to pay apple a big chunk when they are competing against us . That is the main issue, is apple too dominant . They have half of the market share in terms of smartphones. Are they competing with everyone else that has relied on their platform to get distributed . Romaine it almost seems structured for a different time and place. Something like fortnite and epic games is built around the ideas of in App Purchases, meaning within the fortnite app. A lot of other developers, whether for gaming or productivity, similar sort of things they are working into their model. Why have we not seen a little bit more willingness by apple to work with what seems to be a changing environment for how App Developers make money . Apple will argue they are not a monopoly and the 30 thing is fair because everybody else does charge that. Microsoft,ndo and further gaming consoles business, charges 30 . But everyone will say smartphone business is a different level. Billions, over one billion devices on iphones and ipads. It is a dominant market. 10 years ago, it was a different ballgame. Now it is apple and google. Romaine appreciate you being on. We will be back in a moment. Despite the best efforts of black lives matter movements and others devoted to drawing attention to a sense of the winner take all urban income system, experts say the virus and economic slump will likely increase inequality in cities across the country. What needs to be done to ensure an equal recovery . Joining us is the coexecutive director of you have helped anthe past really be advisor. If you are in that role now, setting policy priorities, whoever takes charge, come november, what is a key way we could see a recovery with less inequality than we currently have . That is a great question. I am delighted to join you all. The way to think about this is to appreciate that systemic racism, even sexism and other challenges that have been driving social economic inequality for generations are built into system after system, structure after structure. The right answer will be quite multifaceted and comprehensive. Is thing we are seeing virtually every economic inequity that existed before the pandemic and recession is made worse by the crises. My Hope Congress will get back to the negotiating table and really think hard about what they can enact that would be substantial, sustained and structural. We know we cant go back to the way things were if we want to address inequity in this country. This doesnt look Like Congress will get back at anytime soon. And if they do this year, it will be short term. With regards to the structural issues you say we need to address, is there a way some of that can be accomplished without being pulled in to the beholden to the politics of our government . That is a great question. There are some things that states can do and local governments can do. What you think about our social protections system, a lot of it is run through the states in one way or another. Lets take the Unemployment Insurance system which is front and center with 25 million participants in unemployment programs now. The fact is that if you look across the state, and you look at which states have the most meager systems of benefits, they are the ones with the highest black population shares. States are driving a lot of the iniquity we are seeing in access to adequate unemployment benefits. Important now with the expiration of the 600 federal pandemic Unemployment Compensation increase, which was people,ne to so many but especially black and brown workers. Taylor i am curious how you are thinking about Corporate Responsibility in this moment. This is as an example, uber and lyft were under pressure because they were not bringing people on as fulltime employees with benefits and health insurance, whatever it be. What i