R justately ben laidle calls it a q4 melt up to come. Jonathan pointing out that the u. S. Election volatility could fade. The data might continue to improve. The market might grind higher. But the numbers we are seeing from some of the big employers around the world are not pretty. Tom terrible. I am so glad you bring this up. Horrific, but once again, you separate stock market activity from the social cost we are seeing right now. Jonathan 90 minutes away from claims data, lisa. Lisa we will be finding out a backward look at the latest claims. I say backward look even though is a weekly initial claims that i because we will also be getting a backward look at the income people received in the month of august. One thing i will be watching is the copious amount of additional fed speak. I want to know how much stress they are seeing within the banking sector. And then the theater in washington, d. C. Continues. Steve mnuchin and nancy pelosi continue to talk. Is this just theater, or is this real . Jonathan it is fiscal headline relet in Financial Markets as we try to get you. For the opening bell. Equity futures are firmer on the s p 500. We drift higher by almost zero 9 , almost 29 points almost 0. 9 , almost winning nine points. On the 10had a move year treasury yesterday as we continue to get this talking d. C. Is it just happy talk, posturing ahead of the election . Where are these guys looking to close the gap . On the bond market speaking the 30 year bond. Look at the, you bond move, and i am still looking at they really yield, 0. 94 . It is a very dynamic, and i am going to suggest this jobs report tomorrow sets us up for a reaffirmation of that i if they are of that dynamic if they are benign reports. Jonathan still in the middle of that range between 50 to 90 points at their points right there. Joining us now is Philip Camporeale of jp morgan investment management. Help navigate d. C. Right now. It is headline around headline of fiscal talks. How do you process those headlines, phil . Fromp the gloominess september, the really bad seasonals were all changed on a dime because of the realization that we believe fiscal talks, a fiscal plan may get delayed, but this is happening, along with some pretty incredible data. Chicago pmis, adp payroll report better than expected, setting us up for a really nice payroll report coming on friday. Theres no sign we are in a new cycle, and that is the signal. It is not the noise coming from washington. Tom how do you make the separation . Phil it is a really nice spot to be a multiit a multiasset investor right now. Theres two sides, the 60 and the 40. On the equity side, we are diversifying our overweights. This is not just a u. S. Exceptional us to story. We believe this is a new global cycle. In 2021. Will emerge however, you cant be blind to the noise we are seeing from the election and from fiscal. On the 40 side, it is a credit story. 10 year treasury notes are not moving. 10 year treasury notes are not really going to protect the equity allocation. We believe credit is a great place to be in the investment great side, the securitized side , and highyield. Those three things make up 75 of our fixed income. If you think about what the aggregate is, that is 85 Government Bonds, so we are making a big bet on credit because Government Bonds arent moving. Lisa this is the consensus, that we are entering a new bull market. How consistent is the build up corporate and Government Debt with the buildup of a bull market . Phil the thing we keep a close on is and close eye how much is building up. If debt affordability specifically, whether you are a homeowner or a corporation, stays at these levels, than the grandmaster Jerome Powell is doing his job. The transmission mechanism is working. And we dont believe that is bad debt if it is affordable debt. I think that is a really important key going forward. The 10 year treasury note is a big driver of our portfolio construction, whether it be value stocks, credit, or bond durations. That is how we are incorporating your question into is it a good signal or a been or a bad signal. Jonathan grand master powell, and your words, doing his job. The job hasnt been done down in d. C. Now we face more layoffs. You see the headline every day, every 24 hours. Storycial stigma, the pr is not the same. These Companies Feel like they need to change how big they are, and the answer is smaller and smaller if you are not a muslim. How do you not amazon. How do you process that at the moment . Phil it is certainly emotional, to say the least. I will say that no one knows what a recovery from a forced recession weve never seen this. Our colleagues have never seen this. 30 plus contraction in the second quarter, followed by a 30 plus increase in the Third Quarter in gdp. No one has ever seen this. While those are todays headlines, it is impossible for us to judge. I made that joke about grand master powell. Even he got that wrong. He missed the gdp forecast for 2020 by 3 . So it is impossible to just incorporate these headlines into what we are going to see going forward. Tom where is your allocation of new assets right now . Ben laidler has been shockingly prescient about when markets move. You know all of the gloom that is out there. Where is your marginal allocation right now . The the answer phil into right now is credit. It is not quite equities because of the noise in the election. October is the secondbest month seasonally of the year, dating back to 1995. We are heading into a very returne cyclical s p 500 seasonal story. But to answer your question directly, the marginal dollar has to be in credit. That allows the staying power, to stay in the market without having to be in those rates in cash and Government Bond rates. Lisa how risky are you willing to go in credit . Phil this is a story that we have about 10 deep about 10 dedicated to highyield. People think that is risky. However, if you pick your credit right, if you go up in quality to answer your question, we dont be torpedoed we dont want to be torpedoed. We are looking for highyield for the carry, and that is what we are able to get. Jump into energy stocks. Were just trying to get some carry from highyield, which we think, like it did in september, can go down vest on the equity market if we see some volatility coming ahead. Jonathan i just hear double i justjust here hear bbs. Is that the sweet spot . Credit thatg the can be upgraded to investment grade, that is something we think we can do, and that is what fundamental investors should be invested in as we push forward to the beginning of 2021, when this cycle that we believe has staying power, irrespective of when the fiscal headlines resolve themselves, that could be a pretty impressive return for us within fixed income. Jonathan great to catch up. Send our best to the team. Phil can verrilli Phil Camporeale there. This is very different to the conversations we are having with market participants. Hasnt that been the truth for the last six months . Tom i am glad you bring up the timeline. We are going into Fourth Quarter right now, and the starkness here on october 1 is stunning. Laidlers like 10 ben out there looking at the vix under a 26, going, where are we going to be in 90 days . Theres that knowledge to it just gets better. Jonathan im still in march, dazed and confused, with people telling me things will reopen in may, then june. Where did this year ago . Tom thats true. The year has been truly traumatic. Ian bremmer on with us with some great reporting. They did a great report on the mental exhaustion from a global pandemic. I know you see it in england as we see it here in america. Maybe we witnessed it in that debate. We are staggering into q4, and yet i would suggest the market is separate from the economics and from some of the social discussions out there. Jonathan i would suggest maybe you shouldnt write a year ahead outlook piece for 2021 yet. They are usually written october, published late in november into december. I dont think this is the year to do that. Tom you see that in the budgets, too. How does a corporation plane for q3, q4 next year . Jonathan coming up, new Jersey Governor Phil Murphy will be joining us in the next hour. A conversation you dont want to miss, right here on bloomberg. Ritika with the first word news, im ritika gupta. President trump signed stopgap legislation that will keep the government operating at current spending levels through december 11. The Spending Authority expired at midnight. Neither democrats nor republicans wanted a shut down weeks before the election. House Speaker Nancy Pelosi and treasury secretary Steven Mnuchin say they made progress on a compromise stimulus bill. They claim to continue negotiations. Managing says he sees mnuchin sees an agreement costing as much as 2. 2 trillion. The Federal Reserve has extended its unprecedented limits on wall street banking. Buy caps wont be lifted until the end of the year. Plus, it says the banks need to preserve capital. Jp morgan had already indicated it wanted to resume share buybacks. The president of the tokyo Stock Exchangeel it i apologized after the worst outage in its history. The Stock Exchange was down for the entire day after a hardware breakdown. I am very sorry our notification system failed. Prioritize our time to find out what issues led to this. We are very sorry for that. Ritika the Tokyo Exchange says it will resume trading on friday. The European Union has started legal action against the u. K. Over brexit. The eu will send a letter accusing the u. K. Of breaching the terms of agreement and breaking international law. It is the first step in a process that could end up in a lawsuit at the European Court of justice. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Most likely, the winner will be contested for weeks, if not for months. So a 10 correction because of a veryf you have contested situation. Jonathan in my you stern school schoolness nyu stern of business professor there, also known as dr. Doom, or professor doom. Mr. Boom versus mr. Doom. On the one side, Prime Minister boris johnson. On the others, the chief who had aat the ecb speech out yesterday titled avoiding economic anxiety. Heres just a part of it. Averting an economic anxiety newsk requires encouraging need not be drowned out by fears of the future. I think i know what hes saying. I am not saying this is what hes saying, but i think there is a suggestion that even if you are anxious about the future as a policymaker, you should focus on the good things happening now , and perhaps that will instill a little bit more confidence in society. I dont know if that is the best approach, but he made the case in the last 24 hours. Tom you worry about the present tense, and over the past 10, 15 years, just the general phrase Forward Guidance has been invoke. Do you think we have has been in vogue. Do you think we have worn out the crystal ball at the Federal Reserve . Jonathan i think Central Banks are wrapped up in the future five years down the road, trying to tell this market and people that they wont be hiking rates, they will tolerate higher inflation, when people are focused on the here and now. They want to know what they will do if things get worse and how they will support the economy over the next few months, not the next five years. Tom kevin cirillis timeline, as you know, is the here and now of thursday afternoon. Nancy speaks to david westin at 12 00 known today. Pelosi speaks to david westin at 12 00 noon today. Our chief washington correspondent back in washington. Senators andblican republican members of the house and the republican Broader Community saying to the president on this thursday . Kevin senator tim scott from South Carolina said yesterday he think the president needs to clarify his remarks with regards to race that were made during the first president ial debate. Ofhink the races in terms the battleground states, if you look at iowa, you look at kentucky, South Carolina, where Lindsey Graham is in a tough battle, i actually think those republicans are in a better position more so than the president , should the president not be on the ballot. What is interesting here, and this is what strategists dont know, is how President Trump at the top of the ticket and joe biden at the top of the ticket will impact the down ballot races, and whether or not youve got democrats in some of these states who are just going to check off all of the democrats on whatever side of the ballot they are on. Tom does President Trump have the resources to campaign . Forget about november. Does the have the best does he have the resources to campaign until october 15 . Tom he has a lot of money kevin he has a lot of money at his disposal, but they have shifted money around in battleground states in terms of their strategy. The Debate Commission is now reevaluating the procedures for the next president ial debate in about a week and a half in miami. It is a town hall format. It will be fascinating to see whether or not there is a change in the sense of the next debate. We should note that tv viewership for the first debate was significantly lower than previous cycles. Lisa do we know what those changes are . Is it going to be muting mics . Kevin thats what they are talking about, but i dont know how it would impact the flow. I think, just given that it is a town hall, because people will be asking the questions as opposed to a moderator voters is the better word choice voters will be asking the questions, it lends to a more contained question and answer moment. So hopefully that would move things along. Jonathan did anyone come out of that debate that it benefited them to act that way . And if they did come out of that rate thinking it didnt benefit them, why dont they change their approach in the next debate anyway . Kevin i spoke with sources on both campaigns yesterday. I think the democrats felt that after thatemboldened debate, and the source i spoke with on the president s Reelection Campaign said to me that they did not think that strategy help them at all. Tom im sorry, i was muted. That is ferro muting me in london. Jonathan ive actually gotten on my phone now. [laughter] tom thank you, jon, for letting me speak. Thats very kind. Im sorry, kevin. How is biden doing . Hes on the train yesterday, raising money. How is the Vice President doing . The perception is it was a success. Does he feel that . Kevin i think there is an uneasiness. Just as everyone experienced in 2016, i think when i talked to republicans and democrats, there is uneasiness and this expectation that the election is on november 3, but there is going to be political events after that, whether it is you know, even in the local press reports in cleveland, the local municipalities in ohio are talking about whether Mark Zuckerberg should be funding poll workers at a polling station, and the entire dynamic about whether to accept money from facebook. Microcosms ofe polling stations and whatnot, all of that is contributing. The pandemic is contributing to this sense of uneasiness about Election Night in america, and should we start calling and election months in america. Jonathan or election months, which is something people on wall street are worried about. Before you go, my characterization of things, the standoff that appears to be taking place between the airlines and secretary mnuchin right now. What is the stand right now . Kevin theres consensus that they need additional funds, but theres not a vehicle for them to do it. They continue to say they are having ongoing negotiations, but at this point, those businesses are now forced to make tough decisions as a result of inaction in this town where i am. Jonathan kevin, great to catch up. One hour, five minutes away from initial jobless claims. Dobbs has got to be the focus as we go into the weekend. Question about that. I really think jobs report has been undersold. A great story yesterday on the percent of unemployed. I am totally confused, and please dont mute me. Arsenal playing liverpool, but it is not premier league . How is that possible . Jonathan there are cup games as well, not just the league matches. Tom when the red sox play the yankees jonathan i dont think the 20 seconds weve got here is sufficient enough, and i love this little volume button ive got on you. Just beautiful. From new york and london, this is bloomberg surveillance, live with tom nicely muted, how we want to keep them for the next hour. Jonathan from new york and london, this is bloomberg surveillance. Radio, oomberg pvm live on bloomberg tv and radio, alongside tom keene and lisa abramowicz, im jonathan ferro. Eyes going to payrolls friday. We advanced 0. 9 . Hello q4. Q3, we advanced 8. 3 . September was not great, the. Firmer euro in the mix, and there we are at 0. 7 on the u. S. 10 year. We have a move, though i should emphasize that it is 70 basis points, still slap bang in the middle of the range. The low end at 50 basis points the high end at 90. That is the midpoint. Tom the conversation today, david westin with Speaker Pelosi in the 12 00 our, you really wonder if they can get closer to stimulus. Jon, i look at the markets here and i love the idea of gina martin adams, that youve got to participate to play. You have to participate to win. You mentioned this earlier. Where were we all in february and march to get on board equities looking out six months or a year . Jonathan worried about the future. It is just human nature. You worry about threats around you. Thats what you do. Secret of the last 10, 15 years has been to try to