When you get Companies Like jp morgan, wells fargo up 2 , 3 . I pose this question back to liz ann sonders. Talk to me about the health of the consumer. I know that they dont like the extra low rates. , auto loans,s credit card rates at zero, to the banks then get some hope that they could lend to what is a healthy consumer . Liz ann they can still land. The question is the sustainability of the health of the consumer. There were great fears that we inld see a big rolling over consumption. The is probably because of savings cushion. That was maybe not quite accurate given what happened with the complete shutdown in the economy. 19 or so per that has been nearterm. I think that is on the assumption we get a phase four fiscal plan. The concern, during the period receivingloyed were the spending was significantly more in relative terms than the spending of the employed cohort. The move down in savings i dont think lasts in patootie, especially if we dont see improvement on the job games front. Next several months will be key, especially if we dont get a more formal addition to the enhanced unemployment. Is this why we are starting to see a little bit of uptick in volatility. Of theirguess some biggest moves we have seen in quite a few weeks. A growing there is realization that in week over week or month over month terms, we are seeing a vshaped recovery. That it matters more than level with economic bad, and more than good or when it comes to the stock market. The level of compression in the data was so severe that we had a lot of percentage increase that we had to see. I think what is perhaps unsettling as well as that unemployment rates have not continued the descent. Andink the labor market kind of the choppy pattern here is one of the factors driving up volatility. Caroline we want to thank you, liz ann sonders, chief investment strategist at charles schwab. Workforce, a 50 billion company, it is currently announcing it will have a coceo joining the ranks of its current founder. The share dropped from 11 after earnings beat expectations. More on markets coverage coming up. Close. Rg markets the this is bloomberg. Caroline Bloomberg Markets the close. The markets have closed. A record high for the s p 500 once again. Estate,inancials, real helped by of course those yields increasing. For once, technology not in charge. One of the biggest decliners, the cosmetics and Skincare Company down 8 . Earnings out of ulta. Dismal, down were yearoveryear. That was better than expected. The company did post a pretty decent profit. . 13 pere estimates of share. The company did find a way to control some of those costs. No Firm Guidance for the year. The company said they will be challenged. Taylor i love our nicknames for each other. We are like one big family. Weaking of one big family, i like the bond market. Investment grade and highyield spreads are compressing. A lot of this has to do with the fed trying to ease up some of that credit market. We have been stuck in this range. Yesterday, i asked a guest, he said no way are we going down to 400, dont fight the fed. , we talk about the leverage loan default rate. Inmbing to about 4. 3 august. Molly, how are you thinking about these credit markets after jay powells announcement . It seems like green light ahead for credit. This is what everyone was waiting for. We have had a remarkable summer in terms of debt issuance, how they have encouraged this remarkable investing environment. It looks like that will probably continue now as long as the fed is backstopping credit. Companies will take advantage of what has been an incredibly attractive funding environment. Caroline this time of year, it is quiet on the bond market. Usually, someone like you has a chance to get some rest. I am sure you are at your desk once again waiting for new issuance. Is it still likely to be the and people take some quiet time before we resurrect ourselves later september . Has been more active. I think we are getting a bit quieter now. Shockingly, dealers are still expecting next week. Even if this week you thought was unheard of, this next week is truly meant to be absolutely nothing for labor day. It looks like september will be pretty robust as well. It is usually a busy month and that looks to be even more so the case now. You dont know what else will be ahead with the election. If there is a vaccine or second wave. Romaine is there any sense that to market will be willing sort of close the door particularly on some of the lower rated companies now that we have gotten some more clarity and you are starting to see some of those yields start to rise . Is, ashighyield space far as measure of credit risk goes, we look at the measure of the cost to protect that against defaults. That eased the most versus high yields today. Basically, what we are saying is investors are less worried about high yields now. At that level since before the pandemic. Helpems that is really highyield companies the most. The lowest rated junk bonds are no longer in distressed territory. They are back under that threshold. Highyield is still doing relatively well all things considered. Finally, in my introduction, we were talking about the leveraged loan market. The default rate up to about 4. 3 . Does not sound like much, but it is the highest in more than a decade. It looks like it will still inpretty slow for loans september. Loans have notably lagged when we have been talking about all of this issuance. It has really been coming out of corporate bonds. But there are a couple of meetings set right now for after labor day. It has definitely been a lot quieter. More consistently, we have seen outflows out of funds. Biteems like it will be a more of the same on the loan front. Romaine will have to leave it there. Lets get over to mark crumpton. Mark President Trump says he will visit the gulf coast this weekend to tour damage from one of the fiercest hurricanes to ever hit the united states. President trump said he would visit texas and louisiana on saturday or sunday to survey the destruction caused by laura. Laura slammed gulf coast earlier today. At least four people were killed the World Health Organizations says theean official outbreak is not going away anytime soon. He spoke to reporters in copenhagen today it is a tornado with a long tail and it is a multi organ disease. The virus is attacking lungs but also part and other organs. People,tage, younger particularly with the winter coming, will be in more close contact with the elder population. States and territories in europe have recorded a 14 day increase of over 10 . He called that definitely an uptick. German chancellor Angela Merkel is urging germans to refrain from traveling to areas with severe outbreaks of the coronavirus. The list consists of 100 countries including the united states, most of spain, and france. The chancellor says people iting an area without could miss income. She met with european officials to discuss a recent spike in infections. Special envoyions for syria said talks are picking up today. Discussions have been tabled after several of the participants tested positive for coronavirus. The talks are aimed at possibly drafting a new constitution for syria and brain an end to that countrys nineyearold civil war. 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. Im a mark crumpton. His bloomberg. This is bloomberg. In terms of china, a lot has been accomplished. On the enforcement side, we really have been enforcing quite vigorously. Youre familiar with the actions we have taken on huawei, on z te, two Major Telecom companies. Most recently, we have been working very hard on the Semi Conductor part of things. We still have the best Software Design and the best fabrication equipment for Semi Conductors. So we are trying to avoid them taking unfair advantage of our technology. Technology is really important because while protecting things like steel and aluminum, help take care of todays world, technology is tomorrows world. Very recently, we put on the Companies Since 2017. Awful lot of those are chinese companies. That is because they are the ones that seem to be doing the most to violate sanctions, to violate human rights, and most recently also to create problems in hong kong. That has been a big, big series. Then of course, you have the tariffs. Tariffs imposed on china. Is cumulative effect enormously greater than the longterm cumulative effect of everything done pretrump. Speaking of china and tiktokogy, we have the issue, and i am told microsoft, walmart, and oracle are all interested. Which of these if any make sense view . He u. S. s point of the fundamental idea is that we dont want detailed, personal information on all of our teenage children who are the main users we do not want that to become of a to become part to use tose database infiltrate our country. That is the principal objective. Whether it should be microsoft, oracle, or something else, that is really more for the private sector to decide. The tiktok people are essentially operating in the u. S. And couple of other nonchinese countries. Tiktok as i understand it does not really operate in china. So there will be no particular impact on chinese apps as a result of whatever we do with it. My own personal preference would be to have it acquired by one of these american companies. I think that would have the fringe benefit not only of helping from a National Security point of view, but creating more areas ofin the facebook and social media. That is a healthy thing. Competition is a very good thing. Kind of what makes american industry thrive. Romaine wilbur ross speaking a little bit earlier on bloomberg. Cap earnings are out. The owner saying that revenue slipped 18 in the most recent quarter. That was an improvement yearoveryear from the fiscal first quarter. Brand, which are very own dave wilson pointed out was the bright spot. If these afterhours gains hold, cap would erase it within a year. Caroline lets fit, because we want to talk about some of the impacts of the Coronavirus Health crisis. It is not just physical, it is also mental. It is causing an increase in Mental Health crisis. Young adults are getting more depressed, more anxious as the pandemic uproots their life. Joining us is dr. Lucy mcbride, who has been seeing the increase in patients. The statistics are phenomenal. Something like 24 is now how many in the u. S. , the National Rate of depression, anxiety similar. One in four, that number shocks me. Glad you are shining a light on this important issue. I am seeing patients every day in my office. I have always believed that considering Mental Health is part of considering our whole health. Right now, we are seeing a until health crisis. The coronavirus is a crisis of physical health. But, whether or not you have the coronavirus, you are no doubt experiencing vulnerability, fear, uncertainty, and loss. It is only natural that people would be feeling some level of anxiety. Romaine im curious about the lockdown, the shelterinplace orders. We have seen a lot of anecdotal evidence of a particularly from those folks that are maybe single or shelterinplace alone. They seem to be suffering in some cases the worst for me Mental Health perspective. Certainly. It is a great point. We are wired for survival and also for connection. We stay healthy as mammals is to connect with others. Alonenly, people who are are more at risk for symptoms of depression and anxiety, absolutely. Taylor i think what is most frustrating about this is officials, when they are shutting down the city, no one thought of the effects of those suffering from alcoholism, who thrive in periods of isolation. How do we fix that to ensure that those who are most vulnerable can really get the help that they need . I love that question. The pandemic provides us a moment to rethink what it means to be healthy. It is not enough to once a year get your blood work checked and take the boxes. Health is allencompassing, our mental and physical health. Healthil we put mental and the doctors office, we are really not delivering Meaningful Health care. I hope that as we move forward them as we learn how Vulnerable People are, that we will take these lessons and Reimagine Health care so that we can cure people from the ground up. Caroline it was interesting to me from a cultural perspective, coming from the u. K. , perhaps they dont talk about Mental Health enough. Certainly there is more of culture awareness perhaps of having someone to talk to in the united states. That is something that is a luxury. However we seeing that being able to be inclusive, being not too expensive . One thing that is nice, if you will, reimbursements for Mental Health services with some Insurance Companies have been relaxed. Telemedicine has played a big role. For many of my patients, telemedicine has been a lifeline. I am not talking to people simply about blood plan their blood pressure. I am also talking to them about grief. My patient this morning, was grieving the loss of her husband before the pandemic. Andhas very real trauma resulting Health Consequences that, had i not had access to her, we would have not been able to address. Taylor thank you, as always. It is a conversation honestly that i wish we could have weekly. I think we have all been thinking about the economics of this shutdown and so often, the mental parts spine this are ignored. Romaine not only covid, but of course the economic fallout and social and political issues. A lot of folks are certainly at a position where maybe they can use a little bit of help. The ashes of this crisis, new businesses. Maybe potentially a white Consumer Base but a black Consumer Base as well. This is something we hope to see a shift in. Taylor here is the good news. Joe weisenthals 14th wedding anniversary, he is celebrated by joining you next. This is bloomberg. Hike 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. Expect anything different . The big events are back and xfinity is your home for the return of live sports. Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Caroline from bloombergs will headquarters in new york, i am caroline hyde. Romaine lets look at where markets ended today. Stocks higher, yield higher, dollar higher. Joe the question is, whatd you miss . Caroline lets acknowledge the feds new framework. Sure, it was expected, but it was dovish. Jay powell unveiling the new newoach, codifying a relaxed start to inflation with the hopes that employment can run higher may the question day is today is what you missed in the reading of the economy. How it aims to focus on inclusion as the world fights its way back from the pandemic. Joe it is really subtle, the shift. To start with, the fed has had that inflation target for a while now it will target an average 2 . The fed has it consistently below the 2 level. There is a view that that 2 has not been a target, but a ceiling. And perhaps if the third stance is to get an average, that inflation could run hotter. Romaine this announcement comes on a day when we got that weekly job claims report. A lot of questions as to whether that did not necessarily take into account a broader employment picture it seemed today that they will be an adjusted view of the Employment Situation which will allow not only inflation to run hotter but potentially let the labor market run a little bit hotter. Joe we are joined by bloombergs matt bosler. Point in is there a recent history that you can point to that if the fed had this framework as opposed to the old one, maybe policy would have gone in a different direction . Matt i think so. I think you can go back to 2015 when they started raising Interest Rates. They had not sustainably achieved the 2 inflation target yet. Some of the work people have done on average inflation targeting over the past couple of years as this idea has become more popular kind of indicates that if the fed had been following this type of framework for, they probably would not have started raising interest 2018 if at all. It would have probably changed the course of policy over the past decade at least by a couple of years. Caroline it is noticeable how much fed chair powell has spoken to the issue of inequality or making sure that employment encircles even more, that the level of employment can never be too high. How much do you think is dictated by the social movement that we see . How much do you think targeting 2 will get us to a more picture . Employment matt there has been a lot of criticism that they were cutting things off too early. Obviously, we have been focused more on Racial Disparities over the last several years thanks to a lot of the work that has been done here. Minorities remained very high. Peak part ofis a this conversation to answer your second question, whether the fed can move the needle there or not , i think that is a question. Fed policy, using Interest Rates to try to incentivize the private sector to jumpstart economic activity. Of management that does not have a big role for fiscal policy makers to go in and try to spend money directly to narrow some of those gaps. Extentot clear to what this will change the picture for minorities Going Forward if we are going to be solely relying framework . Or its new romaine for powell to make this announcement without setting any clear yardstick for wh