Through for the United States at 57. 8. The previous number, 56. 9. The survey, 56. 2. We have a easily beaten expectations on this number, but the details are important. Lets dig into the details with bloombergs mike mckee. Michael important to realize this is a diffusion index that basically asks companies, what are things like this month compared to last month. There is a bit of an improvement. The level of improvement has slowed some. But that is a reasonably good number because we see business activity, which is sort of the same of production in the manufacturing index, up to 63 from 62. 4, and new orders up. Again, this compares with the last month. We were at very low levels, so the fact that things are expanding doesnt mean we are back to where we were. It just means that things are gradually Getting Better. The one thing everyone has been watching his employment. This report comes out too late to influence everybodys view on what the payroll report was like for august for september, rather. The new employment figures crosses into positive territory for the first time in about six months. That is up from 47. 9. All in all, we are seeing strengthen the numbers here. The supplier delivery number, the one that dropped, that is good news because that is an inverse number that shows that people are getting some of the products that they wanted and , thed, so all in all biggest part of the u. S. Economy expanding at a slightly faster rate this month. Alix we also have fed chair jay powell speaking again tomorrow. What are the key things you are watching . Michael obviously we want to see their view of how the economy is progressing because there was a general feeling that it slowed in august into september. We saw a week jobs report, and we see the strings in the ism services number, so how did they put it all together, and what does that mean for the economy Going Forward . We want to get their assessment of where we are at and how badly we need stimulus in washington. Alix mike, thanks a lot. He will also be joining Charlie Evans later on in the program for an interview as well. Turning now to our top story out of washington, white house chief of staff mark meadows says donald trump continued to improve overnight and is ready to return to a normal schedule. Doctors will evaluate the president this morning. This will impact the election is greg valliere, Ironsides Partners greg valliere, Agf Investments chief u. S. Policy strategist. Go homethink you will tomorrow. He wants to show that he is macho and tough, and most important, he knows that he is trailing in the election. Guy what is your assessment of the polls . Greg i would say it is at least eight or nine points. The Washington Post over weekend had 14. That seemed a little bit too high. But if it stays at that level, none was guest trump lose, but i think the senate goes back to the democrats. Alix lets talk about that. Betting odds are now showing that blue sweep scenario. When is it too late to reverse that . But we are getting close, i would point out it is hard to believe. For years ago, the notorious access hollywood take that nearly ruined trumps candidacy came on october 11, so there is still time to come back. This time seems a little bit tougher. I think the American Public has concluded that he has not done a good job on the virus. Guy do you think the market should be pricing out the risk of a contested election at this point . Greg i think yes. If things stay about where they are, there wont be a contested election because biden will win comfortably, so that fear may diminish. Alix can you give us perspective of the undecideds . How much will President Trumps way the undecideds after the last 72 hours after contracting the virus . It seems that might play into a more some pathetic a more sympathetic vote. He said over the weekend that he really gets it now. Greg we dont know. We may see a couple of white wildcards. Ple of one is a stimulus. Way he is the callously treated the secret Service Agents that drove him yesterday, exposing them to the virus. Guy were you surprised at how strong the reaction was to the debates, and the concern among those polls about the way the president handled himself . Was i must admit, i surprised. That is trump. He is belligerent. He interrupts. But i think a lot of voters who dont see him a lot were taken aback by his demeanor. It really hurt him badly. Make it up by his interaction with the public right now . Greg lets see if he can get a big stimulus bill. I think nancy pelosi may call the shots on this. She wants to . 2 trillion. If mnuchin says how about one to . 2 she wants trillion. 1. 8uchin says how about trillion, we will see. Anything can happen. Guy can you handicap for me what the likelihood of a stimulus bill is now . Is it greater than before the president went into hospital . Greg absolutely because i think he realizes now just how serious this is. We are still fighting a terrible pandemic. I think this would add a sense of urgency for getting a bill done, and he needs a win. Win how does he get a win the senate isnt actually there until october 19 . What is the functioning of the government when we have seen senators come down with covid, and the senate actually isnt there . Greg they can come back. The hearings can be virtual, but they have to come back for actual votes. I would say if anymore senators come down with covid19, it does complicate the entire scenario for the next couple of months. Guy do you think tony barrett is up do you think Coney Barrett is on the bench by the time we get to the election . Guy i would say it is greg i would say it is probably 60 or 70 . I think she will get confirmed before the election. How do they address the , the protocol from the white house, and how does that lead to the conversation within congress and the public . Greg that is a good point. It might require mike pence to be in town. For him to go on the road the most of this week, i know hes got a debate, Financial Markets have to really start factoring in a blue wave. That is not a good story on taxes and not a good story for a lot of sectors. Financial services, defense. A lot of sectors might not do well with a blue sweep. Guy a number of publications today coming from the likes of Goldman Sachs, j. P. Morgan, talking about it being good for value and ironically good for europe in terms of the stock market performance. We will have to leave it there. We really appreciate your analysis. Thank you for being with us today. We will carry on talking about the Market Impact this election is having. Volatility obviously has been a big story. Ironsidesp, economics, is going to be joining us. This is bloomberg. London, im guy johnson. Alix steel over new york. This is bloomberg markets. The president ial debate and President Trump diagnosed with covid have been testing tensions in the market. Bloombergs scarlet fu is digging into all of the details when it comes to volatility. A messy its been president ial campaign so far, but investors are starting to see a little more clarity here in the outcome. The polls clearly showing joe biden taking the lead and widening his lead. Strategists see the odds of a contested election slipping. Theres also a chance that the president s illness leading to fiscal stimulus. Spark avictory could lasting transition to valleys. This is a rotation that has been long in the waiting for everyone. According to jp morgan, they styles a broad range of and performance. This is not unique to jp morgan. Making similar calls. President trump says he is feeling better, but unless he starts to feel suddenly worse, Barclays Says its baseline is a risk supportive macro out to get thats not to say there wont be any volatility along the way. Stocks may be recovering from fridays decline, but the vix has been steadily climbing, now higher for a sixth straight day, his longest streak since january. We have talked a lot about the vix futures curve. That is not done down either. If the democrats do win the presidency and the senate, that would set us up for potentially even more stimulus. Since the president ial debate on tuesday, we have seen the yield , now neardily stephen a four year high. The 10 year yield regional was 75 basis points today, the highest since late august, while the front end is anchored by the feds lower for longer mantra. Cameron crise says this reflects more stimulus, and more borrowing is coming, and it is only early october. Alix thank you very much. Joining us now is barry knapp, ironsides economics managing partner. You have the back end of the bidencurve, is this a win, we get stimulus trade right now . Barry i think it is. I would refer to it almost as the mmt trade. I suppose that is a little bit of hyperbole. You commodities rallying. The curve is steepening. That is being driven by the inflation component of vons. Breakevens, the dollar is weaker. Things like stimulus, but not just stimulus, but infrastructure related stimulus. Those stocks are rallying sharply. Waveis very much a blue massive stimulus type of trade this morning. I would note or suggest you should be a little bit cautious about it not from an intermediate respect. This theme could carry on through the end of the year. If we get into 2021 and that is the scenario, you will have very stimulus, buted that is not necessarily a in general. We are in that case giving the government a much bigger role in the state of the economy. Canwer Corporate Tax rate spur a big jump in Capital Spending like you had in 2018. The multiplier is much bigger because it productivity and real wage growth. A big fiscal stimulus package with shovel ready projects, i think that trade will wear off very quickly early in 2021. I am bullish cyclicals for now, but if there is a blue wave scenario, i think our first big trade in 2021 is going to be down, not up. Guy a lot of people are suggesting that if we do get a blue wave, you want to buy europe. It doesnt seem at first blush to be a logical thing to think about, but when you start digging into the details, maybe it makes sense. Do you step outside the United States if biden wins . Barry i really struggle to see a europe outperforming u. S. Scenario. My answer would be probably not. Really negative on the mercantilist generally because i think this restructuring of the goebel supply chain is going to persist. The Global Supply chain is going to persist. It is going to hurt germany, going to her china, going to hurt japan. Massiveknow how that rebalancing in arab goes very smoothly. I also think that Banking System is a huge drag, having worked in a u. K. Bank for a number of years. You need significant regulatory loosening for europe to start spurring credit creation and banks to be profitable enough to build capital. So i am still pretty negative europe. Alix fundamentals are great, but lets talk about positioning. Net short speculative positions and long bond futures saw the biggest weekly climb since 2007. How much of what we are seeing is repositioning versus some fundamental shift . Think, whether we blueue wave, meskill wave, massive fiscal stimulus, we still have a massive amount of debt, and we are going to have financial repression. 2021,k as you get into the inflation outlook is changed dramatically. We have gone from a 30 year disinflationary period and reached the trough in that, and the bond market will not be an effective diversifier, and he 39 year bond bull market is over. It a end slowly, but i think that on bull market is over. Youve got positioning, but you also have fundamentals going the other way. I think covid is an inflationary shock, not a deflationary shock. Guy most peoples portfolios have a lot of bonds in them. 60 40,are in a classic listening to what you are saying right now, youve got to worry about your portfolio. Am i going to lose money . Barry i think so, yes. I have been suggesting having a much lower allocation in bonds. If you need to derisk, raising cash. Or having inflation related hedges as well. 60 40 era is ending. Alix where else can you go for risk . You can get some incremental returns through spread product. Credit spreads are wider and the like. But you are going to get forced into the equity market if you are not already there. If you think about what happens if inflation picks up, initially what it means for equities is faster Earnings Growth. Probably wont do much for the multiples, but it will mean Earnings Growth outside of a recession typically averages 12 or so during the middle of the business cycle. Last cycle was only nine because nominal growth was so slow. In the early stages of the cycle, that should make your return a little but higher, at least initially. I just dont think the bond market will do much for you except lose money. It is the same as having cash. Guy you talk about this being an inflationary shock. How inflationary is it going to be . I am wondering where the best pickup is going to be. Is it going to be in real assets that i get my best inflation return . Is it in the Metals Market . Is going to be in tips . Where do i go if i think inflation is coming . Barry you want to be in commodities, commodity related assets. If you think about what ask caused all of this for the last three decades, it all comes through global goods prices. There was this methods labor supply shock. That 1 goodsk prices weve had in the u. S. For three decades and make that zero, all of a sudden, inflation point 5 . 1. 5 to two i think it will start slowly, but it will build over time. I am not quite in the stand ryan miller camp where i thing we are going to 4 , 5 in the next two years, but we are going to start working our way higher. Probably the best way to think about it is what happened in the 1950s, where it started increasing very slowly, and then started to really accelerate. Theuild slowly, but direction is higher. Guy and then we get mr. Voelker. Barry, thank you indeed. Really appreciate it. This is bloomberg. Guy 25 minutes past the hour. Welcome back. Facebook reportedly saying a u. S. Government effort to break up its business is a complete nonstarter. Now, it definitely would say that. But over the next day or so, we will get some pretty big hearings coming up in washington. They are basically around the section 230 of the Communications Decency act, which talks about whether or not facebook and all of the other social Media Companies are platforms or publishers. A breakup may not be the option. If you were to rescind that rule, that would be a huge blow to these businesses. I guess the point you would make is that the Regulatory Risk surrounding these companies is definitely growing. Alix not only that, but do they then stymie how much more they can grow . Can they not expand and grow . Also, the real information behind does this actually hurt Innovative Companies to compete in the offset for that, we will break that down right after this. 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Ask about saving up to 1,500 on your installation. Virtual appointments now available. York, im from new alix steel, with guy johnson in new york. This is bloomberg markets. The head of the antitrust panel is poised to propose legislative changes to rein in the Technology Giants. Joining us for more is alan patricof, greycroft cofounder and chairman emeritus. He helped to build and Grow Companies like apple. We are going to get into the nittygritty in a second. I just went to get your perspective as an investor. Do the likes of google, facebook, amazon, apple, do they hurt innovation . Do they hurt Smaller Companies from becoming the next apple or google . Alan it is inevitable that they hurt. When you have a company like amazon that has 70 of the online marketplace, and google has 90 of the search business, that to me is the definition of monopoly. It is no different than your electric Utility Companies or the telephone company. You have no choice. Inevitably, it has got to affect Smaller Companies. Meetings thanore i can remember when one of the first ceo would open with is google changed the algorithm last week and we lost 20 for percent of arch 20 of our traffic. When you are that vulnerable to a company, you know there is a Competitive Edge and makes it difficult. In spite of that, certainly there are lots of Small Companies that emerge in technology. But to go into these areas where these giants are, and the giants are only getting to be bigger every day they are in business, theres got to be a concern of everybody. Whether or not they think that these companies have done a lot to help the consumer and help business, in the process they are also causing great problems for anyone who is a potential competitor. When you have amazon acting as a platform and a marketplace, and the same for google, and the same for apple, you cant have two masters like that and not have some conflict. Guy the story of the day is that we are heading towards,