Plus, so that is a little bit of a lift that is maybe not identified within the euronext. Go, Kevin Cirilli could not sleep this weekend. This is exciting. Ranting cap it is exciting. I have been excited for the last two weeks before this because it is the polls, it is the final stretch. How much campaigning are joe biden and donald trump doing in the next two weeks . Tom it is going to be huge. These guys are in the final stretch. Money is an issue. We will talk a lot about that. Martin schenker joining us in the next hour. What is exciting about this is it gets back to basics. President trump is out there in nevada this weekend. He is in arizona today. Francine there are very few undecided voters from what i understand, and several people have already gotten out the vote. 52 of those are women. Lets get to first word news with ritika gupta. Ritika good morning. In china, economic recovery from the pandemic continued in the third quarter. Ago,ose 4. 9 from a year less than expected but higher than the Second Quarter number. China retail sales grew 3. 3 in september. Industrial production was up almost 7 . House Speaker Nancy Pelosi has set a deadline if President Trump once a preelection stimulus plan. She says there has to be more progress with the white house on a deal by tomorrow. The president has said he is willing to go higher than the 1. 8 trillion is team has been trying to offer pelosi. Senate republicans may not go along with some things that large. Global federal bankers are under no illusion that that through the fallout debt grew throughout the fallout of coronavirus. Warnings were issued about new government restrictions, struggling recoveries, and the threats to job. Two jobs. Bloomberg learned that british officials are prepared to water down Boris Johnsons controversial lawbreaking brexit legislation, a move that could revise failing talks with the european union. Johnsons internal market rewrites the deal he struck with e. U. Last year. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im ritikauntries, gupta. This is bloomberg. Francine thanks so much tom thanks so much. Equities, bonds, currencies, commodities we have a lift to equities. It is all stimulus. The vix flat. 27. 50. The nasdaq, as we get used to this number, near 11,000,. Ear 12,000 rounded up. Stocks, i will0 let you try to figure out. No figure out, who is the three stocks in the nasdaq 100. Renminbi also stronger today come out to new strengths earlier this morning. Francine jeopardy, i like that, tom. Chinese stocks sweeping after the countrys gdp was good but still missed expectations, although the move was muted as retail sales and Industrial Production moved. I will look at pound. This is because of chaz it because of exit trade talks are like because of exit trade talks next week. Euronext trading has been halted, in all products, because of a technical issue. It doesnt mean that all stock markets are closed, but this glitch affected european marketing builder, fridge, the netherlands, portugal, and irelands. Talking about the movement in the market, arent guest joins us. James, thank you so much for coming on. I want to ask you about china and about pound. The one thing im looking at is the u. S. Election, 15 days away. How is the market playing it right now . James the market appears to be discounting a biden victory. The issue is not just the presidency but who will take control of the senate. As to biden will unveil his degrom mr. Biden will unveil his program of change, and he needs the senate on his side, and that is certainly not in the bag. I would not be at all surprised if we got a biden presidency but republicans retaining control of the senate. I suspect that business might welcome that, slowing the pace it would allow business to do what it has to do which is to. Evelop real longterm growth francine if you look at if there is a blue sweep, and so we have emma kratz taking the senate and democratic president , what does that do to stocks . Are certain industry growths going to be adversely affected . James undoubtedly. Three things would happen. First of all, mr. Biden would spend a lot of money, but not necessarily a vastly larger amount as trump would spend anyway. And portly, he would put up taxes, and i would suggest we would be talking about 10 of Corporate Tax pain, the s p 500 index level, expecting 155 of corporate earnings for 2021. That would get shaved back to 145. That means a real focus on dollar growth, high quality companies, and decent free cash flow. That is what i have position currently, so it is a good handful of the top tech companies. Together with some of the medical diagnostics companies. We are also buying at the moment, u. S. Utilities and infrastructure plays on the basis that they are likely to be under mr. The biden certainly, and not losers under mr. Tom what is so important here is your ability to stay in the market. What sectors for people afraid, what sectors of the soket now provide comfort that they can participate in the market . James i would say there are three sorts of stock to encourage people to consider owning. There would be the solid longterm growth opportunities, and they dont cheap at the moment. In terms of their ongoing free cash flow, in terms of their theyh characteristics, would be names like amazon and alphabet. There are companies which are exposed to secular Growth Trends but are not as expensive, makinges like strycova, parts. The third area people should be considering our stocks that relate to the resurgence of infrastructure spending. We know that the u. S. Market has been on fire. I have considered some of those opportunities to be strong. I think the goodquality certainlycompanies just for consideration, because of change to clean energy, and upswing that i think the Biden Administration would bring. Tom thats a date to see the parallel to president obama if we get a president widen. If we get a president biden. Does that just assume the health care outperform . James i think that health care is wellplaced to perform under a biden presidency, and it is not a loser under a trump presidency. I am looking to find beneficiaries of a shift in policy but not to lose if mr. Trump is reelected. Francine what do you do with Technology Stocks . There i would say that are three sorts of Technology Stocks. There are those that are disruptive and making money for their investors, which obviously i will put alphabet and amazon at the top. I would say that there are than a series of opportunities which are, from my point of view, still unable to demonstrate that they can make sustained value. I would put Companies Like uber into that arena. They are very structured, but i have yet to be convinced that they can make money. The third grouping are the up and comers, the companies that are engaged in delivering new solutions, and many Old Companies that are prospering very directly from the covid19 crisis. That peoplehe one use to associated only with windows. It has risen to the fore in audio and business lines along with its media platforms. Francine figuring out what they do if there is a downturn in the economy, meant to put extra oil barrels on the market early next year, plus coming back online in certain parts. What do we understand about the stand on the Bidens Energy in the u. S. . James we certainly know that biden wishes to keep the u. S. Within the Paris Agreement on Climate Change, and he would be driving a shift away from coal and away from the heavy end of the hydrocarbon continuum. Look atink that i the incremental return on capital oil and the oil majors, and it is six distantly poor. I Want Companies to generate excellent longterm value, but that value is reflected in the share process. I would bet on that next year, and i know his recent thoughts on covid . Tom james bevan, i want to talk portfolio construction and also active versus passive index funds as well. Coming up, two ideas here. We will be covering the election a lot, but also a conversation with the former chair of the Federal Reserve systems. Janet yellen with exquisite thinking recently on Climate Change and how it links into our economy, and also we must speak to her about hans nichols report over the weekend. Could it be secretary of the Treasury Janet Yellen . Look for that in the 8 00 hour. Futures up 31. Close. Francine, go home. This is bloomberg. Good morning. The recoveryinue is anticipated, which will benefit the global recovery. The risk that we see right now macro leverage ratio is increasing. The risks remain very heavily skewed toward the downside. The what you could take and may you are not going to take in october. The Financial System becomes unstable, the economy could fall into if you were to grasp this after the decline we saw in march and april, the recovery looks Something Like this. Tom central bankers waxing fiscal, and we will talk to innet yellen about that the 8 00 hour. Look for that coming up this morning. Away from economics, what to do with your money. Tims bevan us. What is the active advantage right now . A faird talk about round of active management out there. I am hearing that active is doing better. I would say quite simply the evidence that active management works is overwhelming , unless you are too big to who onnt with people paper to identify companies that are cheap relative price and overall run, subject to being able to buy enough product. The problems that these markets have is that they simply dont have enough liquidity available to implement in the scale. So i would say that active is now primarily the reserve for the small player, and a large player who prospers has to rely on momentum where they are able to keep share prices that they already hold. Tom one of the great advantages to alpha gaining on active is that they are less diversified to own fewer things. Is that true . James i would say there is a textbook expectation if you can get away with 30 names, that constitutes an adequately diversified portfolio. I dont think 30 name portfolios have too much idiosyncratic risk simply because there are things we cannot know and do not see. It in a global context is much more likely. Beyond that, i think it begins to dissipate the value of really understanding what you will buy and getting exposure with the secular Growth Trends that will drive things longterm. Francine if the rest of the world is becoming more like japan, what kind of stocks, what kind of assets do well in a japanlike world . James it is certainly secular growth. Theou were to look at passage of what happened in japan, the Government Bond market to distort neural well, but th japan bought virtually every bond issued. People who have bonds at low levels continue to make money on the the ultimate buyer of course being the bank of japan. But good quality export stories, they were able to deliver product out of japan into the rest of the world, and investors did are seemly well. There are Specialist Companies that people recognize, market leaders, and that is cane real stock market accrue. Francine how much do you think about the possibility that we are putting the seeds for the next financial crisis because of depressed yields, people in the search for youll go into risky markets and risky assets in the next downturn, and this will all end up in a Financial System crisis . James i worry all the time about these challenges. Drawnk that the cut that i on the current environment is that we mapped out Central Banks and governments working together. And working in a manner that is consistent with an expectation that they care about the Financial Systems. Ofnking about prior periods material meltdowns such as in the 1930s, that is when governments and Central Banks were set on the gold price. Now they are much more set on the prices of assets, and the bond levelsdex at are what the government used to compile policy. Tom james bevan, thank you so much. What he said there about diversification is really important. He is with ccla. Futures up 32. Euro has shut down with a technical glitch. Watson, headrilyn of fundamental fixed income. Fixed income, i say, strategy. Stay with us on a monday. This is bloomberg. Ritika this is bloomberg surveillance. We are one step closer to what could be the Worlds Largest ipo. Jack mas group has won approval from chinese relators. They say it can list shares in hong kong and also planned to list shares in shanghai at the same time. The company could raise 35 billion dollars from the dual listing. One of the Worlds Largest alternative Asset Managers is watching a new partnership with American Equity Investment life holding. Brookdales Asset Management will require a 19. 9 stake in the insurer. A proposed 3 billion takeover was just rejected from massmutual. Thirdquarter profit based estimates. A Dutch Company sees high demand for medical gear in the coming years. The reason, the lingering impact of coronavirus and changes in the way health care is delivered. That is the latest Bloomberg Business flash. Futures up 32 with a lift in the last hour. Where are we . We are above the center tendency back six weeks. Toures up 32, dow futures up. 26. We are above the center tendency of the last six weeks. Are we going to break out . Dont ask me. What i can tell you is that we start the week constructively. Renminbi stronger off gdp reports. Francine euronext trading has been halted on all products because of a technical issue. Tom it is just a great song. Uanou say you i say renminbi francine yuan is interesting, if you want to say that, because of that better than expected story. Although gdp tom oh, come on. Francine im a harsh critic, tom. U. K. Is ready to rewrite this lawbreaking brexit bill, and talks could be restarting and so we see a bit of movement on pound as well. Coming up on balance of power, Kenneth Benson at 12 clock p. M. In new york, 5 00 p. M. In london. Dont forget, 15 days until the u. S. Election. This is bloomberg. Francine this is bloomberg surveillance. I know we have to talk about brexit, but i was distracted by this cat on twitter. That is a whole other story. Government officials are preparing to water down Prime MinisterBoris Johnsons legislation that could revive trade talks with the eu. The bill begins its process through the lords today. A reallybeen lasting long time through twists and turns. We understand now they are not talking about the u. K. And the eu, but talks could continue later. That is correct. Bulger left the door open to negotiations to restart friday. And areegotiator going to have a conversation this afternoon. The talks will resume. Intensifyu has to talks. Suggest it iss to prepared to compromise. That again is something Angela Merkel suggested the block due friday. Two of three conditions have some way to be met. Tasks besides the legal legal text you could see a path to talks resume and but the problem is the deadline is fast approaching. At transition period ends the end of the year. That puts the perspective deadline at the end of october. There is not much time to restart talks. The risk here is that we get to that deadline at the end of this month without talks restarting. Francine australia, canada, all the are these semantics . Are Companies Moving out of london and the u. K. Because they cant deal with uncertainty . They are facing a lot of uncertainty. The key thing here to remember is that even if there is a deal, he a lot of things are going to change her business. Specifically for people exporting into the eu. Britain is going to be outside whatever happens outside the eus Single Market union which means goods going across the border are subject to customs checks. This is something businesses have not had to deal with for three decades. Add to the fact they have been dealing with covid at the same time and youve got a lot of unhappiness amongst businesses. Week isrnment this starting its advertising out. Gn, time is running unexpectedcan be the like today with west ham and the last one against the spurs of tottenham. What is the unexpected here for Boris Johnson . What is the westham for Boris Johnson . Im going to stay clear of soccer metaphors. Is that theed here two sides could be closer than it appears. The twoook at it, issues are fishing and state aid. Like they are pretty close on state aid. Fishing was always going to be the difficult last one to crack in part because of french sensitivities on that subject. Itmay be this is just could be that this is the final explosion. As a dummyrkel on this im like ok, great. Is the one because of fishing policy, is merkel caught in the middle . Is it somebody else . Merkel is the one who does look as though she is edging toward compromise. Of everything friday, her comments were the most interesting. She was suggesting there is a recognition on the eus parts that britain is going to go a separate way. That is going to require a different way of enforcing any agreement. That is a big give from the eu and a sign that may for the first time merkel is prepared to help the british in these negotiations. One recurring theme is that britain hopes germany will ride to the rescue and doesnt. It looks like this time that if not, they are not riding to rescue, there is suggestion they might be prepared to compromise. Francine