Candidates were in florida yesterday with an emphasis on the latino vote in battleground states across the eastern will, minnesota, wisconsin, iowa. Eventful to say the least, but the number one story is the inability to capture a bid. We will have plenty of extra data checks. Lets get to first word news ritika. K cap nancy pelosi and Steven Mnuchin and are playing the blame game, minutia and accused policy of holding of the stimulus bill by refusing compromises, pelosi says the white house is not responding on a number of sticking points. Joe biden has appealed to hispanic voters, telling a rally that if florida goes blue, its over, indicating that biden and President Trump are virtually tied. Europeanrkel says the union should have acted sooner to control the pandemic. Saying that political realities a stop stems from imposing restrictions earlier. And shares of apple are lower today. Company reporting missed wall street estimates. Apple gave no forecast for the holiday quarter, but tim cook says the new iphone 12 has been well received. 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. Bank i am our bank ritika gupta. Looking here, equity markets dont perform. The vix is backup at 40 levels on the bics on the vix. I look at the yield move. This is backup to. 8 on the 10 year yield. This correlation really bears watching. Better andyields do maybe francine will get to that in a moment. With the Dollar Strength, euro 116. 2. The turkish lira is day on day with Dollar Strength the euro is at 0. 62 percent. The turkish lira is day on a day off. Francine it was a big markets week, today even bigger because of tech stocks. I wanted to show you what european techs were doing. Theres more concern about the outlook of technology giants. European shares with opening lows and we did have glencore for example reducing its production targets for the third time this year, that brings us back to virus restrictions which could post the euro into another recession. Im looking at the french and spanish economies which is really being derailed by the pandemic and new restrictions. Plenty on the markets. Do you want to go back to technology . This was a surprise. I think i counted five giants reporting yesterday. Take a surveillance nap in new york city and then i get speak with archie content officer and we bruise the tech earnings. The amount of trillions of dollars of revenue involved is enormous. Whats key is they delivered. In general,panies, delivered on Revenue Growth with a little bit of challenges. Overall, first blush was actually pretty good. Then it wasnt. Excepting google, there was some really distressing features about the outlook forward. Uncertainty it about the outlook forward, rather than gloom. I think the narrative is that. Technology stops Technology Stocks actually beat the sales but it was Forward Guidance that had us worried. With us is christian miller, he is the managing director of portfolio, strategy, and asset allocation. Thank you for coming on bloomberg. When you look at what markets gdpdoing, are they tracking . Central banks . Stimulus . Its interesting what you have set on tech just now because its been the big leader. Its very much been Central Banks and lower rates that have boosted the tech sector. The big problem is that the stocks, by virtue of the decline in yield, these have gotten much more expensive. By virtue of that, they have a much longer duration. They have more cash flow in the future. If you have small disappointments, that can have a huge impact on share prices. As a result stocks get more volatile. It is similar to the tech bubble. The tech bubble in the late 90s, very different companies, to be clear. There was profitability and the balance sheet. But there was a lot of duration in the market. Equities were very expensive. For two years you had a very volatile equity market. Think you are facing that now while the tech earnings were possibly good as was said earlier and not as bad. Matter,sappointments but also the real yields over the past few days have actually gone up. Thats the double whammy, which is negative for these tech stocks. Francine i know tom wants to talk to you about real yield in a second, but if we have a disappointment for Technology Stocks, when we have a lot of governments going back into lockdown, presumably that means we are going to use a lot more facebook and amazon. What to the rest of the Asset Classes have question why do they stand a chance with the extra restrictions and the number of infected cases going up . Ritika thats the debt christian thats a difficult situation. Tech has been a key winner in this crisis. The more cyclical assets have really suffered. Since the summer, we have seen the market trying to embrace the picture. Going into the end of the year there were two major catalysts, the u. S. Election and the uncertainty as well as potential development on the vaccine. There was the hope that this the market. As you have discussed, we are now dealing with a second wave. As a result of that, the cyclical pockets are also facing headwinds. I think it will be difficult for the cyclical rotation to game unlessest again steam you see stabilization with the covid situation. You could have some uncertainty relief from the elections. You could have a bit more policy support. But i think we are in a phase where the market is incredibly sensitive to any covid news. It has really shifted. A lot of investors have said we can look through some of the covid data because the mortality rates being lower in the vaccine is around the corner but the market has changed. Marker, at to set a the end of october, over the fears out there, as you mentioned with the covid and the pandemic epidemic. I want to look at some realities of headlines. U. S. Gdp yesterday, a better statistic. The German Economy this morning, a better statistic. Italian economy this morning, a better statistic. On and on. Ofthe november, or the march 2021 shot . Did we sustain better through the pandemic and we got to a better point after the pandemic . Ritika thats youstian christian mentioned earlier, we priced the data already before, this idea that the first covid we would end and we would get a strong recovery. That has really sustained the market rally. But now we are dealing with the second wave. I would agree that we learned a lot about what the lockdown with regards to shortened and permanent damage. We could have some very strong recoveries and as one would expect, we have a similar type covid wave with cases in lockdowns, especially with the policies, it should not have the same impact on markets as it did last time. Theres always incremental uncertainties. We do have the elections, would probably keep people from reengaging with markets, despite the selloff. And we do have uncertainties with your guards to the vaccine, in the summer there was still optimism that we would get the vaccine by the end of the year. Possible,hink thats i think markets have certainly lost bit of faith. Tom can you buy the european banks . In terms of asset allocations and i dont want you to comment on competitive or Strategic Issues but is there any shocking valuations in the e. U. Banks . Christian i think so. I can tell you, we have not been particularly bullish on this space for a long time. And i think generally our view has been growth value. We are shifting a bit down the value of a spectrum currently, and the banks are part of that. We have seen a significant widening of the value. For value tolot, do better than growth. And we do have the view that growth does pick up significantly next year. It might be pushed out a bit with the second covid wave. But we think the vaccine will eventually stabilize these concerns and there are a lot of gaps in Services Sectors and the bond market is still incredibly depressed. , you are notelloff getting bond yields further down. That gives you a sense of symmetry, so things get better, bond yields are likely to go up. But if they get worse they dont go down. Are very levered into bonds and rates and that gives you a positive symmetry. While tech is well above the levels they were before this crisis, the banks are pretty much at the in terms of their share prices. We feel like its good symmetry, and it does trade not feel like its getting easier with a second covid wave. But we do feel good about it. Tom we will continue this discussion with christian. Isures are down and the vix 33. Almost 2. 39 stay with us, this is bloomberg. Incoming information signals that the euro area economy recovery is losing momentum more expected. An activity in the Services Sector has been slowing. Consumers are cautious in the light of the pandemic. The impact of the second wave on thes is going to depend on banks. But let me tell you something, the European Central bank, and the whole euro system will be extremely attentive. We cannot just and still. We are going to use all of the information the instruments that we have, with the entire flexibility that we have. We have little doubt, given whats expected as a result of the risks that we are take of the risks that we are seeing, that circumstances will warrant the recalibration and implementation of these packages. Francine that was Christine Lagarde opening the door for further stimulus, using the word recalibrating into december and asking the governments to spend more to weather the crisis and the pandemic. Christian, howh much can Central Banks actually do . Are we at the end of what they can do and its all about stimulus . Its all about supporting the people who cannot get to work, Companies Like travel and leisure which are at a standstill . What does that mean for deck creation . Christian we have seen support from the central bank and i materialexpect incremental stimulus is probably too much. The most important driver for the markets will be the picture including fiscal stimulus. You will have Central Banks and willet purchases still be focused on providing liquidity and Financial Market stability. But i think in terms of the current starting point, to get markets to break out of this volatile range, we really need growth. Of whats the significance a lower oil cry oil price. On this,urrie has been and the shock. What is the significance . ,hristian in the near term its part of the reason why markets have traded so weekly weak. Are an unstable equilibrium because theres a lot of inventory. At the margin, if you have a second wave, the real concern will be the oil prices like what you had earlier and why that matters is for inflation expectation. One of the most important drivers of market are the real yields. If you see inflation essentially decline this will decline and pushing up real rates. Perspective, oil prices are moving lower. Thats a clear negative. You can argue its a positive for consumption. A positive for the consumer. But that doesnt matter in a covid wave. Right now its a clear negative that you have weak oil prices. It reflects the concern that the market cannot embrace a positive world outlook. Christian, we are four days when the u. S. Election. Some of the polls in certain swing states are narrowing, do you need more of a hedge in your portfolios . Onistian the uncertainties the elections does contribute to the volatility that we have had. In conversations we are having with clients, there is certainly a desire to take advantage of the current volatility in the sense that people want to buy. But theres a lot of questions where people say maybe i just wait until after the elections and especially International Investors theres a lot of uncertainties because we have seen surprises around political events. My sense is the elections, if they have a clear outcome, should provide relief. At the margin, it should support risk appetite. If you get the blue wave, a democratic sweep, i think our strategists think it could shift cyclically in the markets because it supports expectations of fiscal stimulus. Thats the trading template. Its a clear outcome, uncertainty relief, if its a unified government, and if the democratic sweep you could have a slightly more cyclical shift. And you could also see value do a little better versus growth because you have a lot of these profitable Growth Companies possibly suffering from taxes and regulation. Christian, thank you. Hes with goldman sachs. Futures at 40. Stay with us, coming up, mark mobius will join us. This is bloomberg. Good morning. Ritika this is bloomberg surveillance, i have the business flash. Amazon is projecting a big jump in sales in the current quarter, beating analyst estimates. Ist indicates the largest expecting a surgeon online buying for the holidays. Shipping expenses are still growing faster than revenue. Facebook is indicating that a major advertiser boycott had a limited impact. The social network says they rose better than expected at 22 in the Third Quarter. And the number of monthly active users beat estimates. There was an unusual decline in users in the u. S. And canada. That recordsetting is generating investor interest. Total debt tohai . 8 trillion yesterday. That exceeds a supply by more than 870 times. Thats your latest Bloomberg Business flash. Tom thank you. We are looking at markets, another down day, this is off of tech disappointment and further pandemic news. 38. Es dow futures 3. 11. And we continue to see resiliency this week of the dollar. Westech at 36. 40. Interestingnd gentleman who served president obama and President Trump. This is bloomberg. Good morning. Tom good morning, everyone. Bloomberg surveillance on a friday from london and new york. We are continuing to monitor the tragedy in nice. Information,much but we will watch that today, articulate the actions of mr. Micron from france. That movesk at how forward in the coming days and weeks. Lukens diplomacy, lewis is with us. He is a rare breed. Public service to the nation with president obama, Vice President biden, and also President Trump. We are thrilled he can join us this morning. There will be a massive partition of a trump win and biden win as well. Let me first go to president biden, which will be a radically different state department than what we saw with mr. Trump. Is it obama redux, or will there be a different biting tone at state . Lewis i think it is a different tone. The world has changed. A lot of the instincts joe biden had as his career through senator and Vice President , his friends and allies around the world will still be there, but the way Foreign Policy is framed and the objectives will be different with more of a focus on bringing jobs back to america and trying to rebuild the American Economy after the devastation it has seen. Tom in diplomacy, you served the nation in africa, the united kingdom. The question is obvious, this comes from economics, which is longterm unemployment and the impact upon society. ,f we have a second term trump do we risk a diplomatic history says . We do. The state department has been devastated during the trump presidency. The president does not trust the state department, does not believe in diplomacy, does not understand the importance of alliances and relationships, has made an effort to weed out Senior State Department people he sees as untrustworthy, the famous deep state, which does not exist. Another four years of that would really devastate the ranks of the foreign service. It would take a long time to rebuild the state department after eight years of President Trump. Francine many people voted early. Who voted early . Is it people who did not vote last time around or people who were afraid of queuing up because of covid . Lewis i think it is a combination of both. There is not a lot of great data on who is voting early because most of those people have voted by mailin ballot. The numbers are staggering. Americans who of are going to vote this year have already voted. I think we are seeing from surged the country a in young voters. That bodes well for biden. It is a combination of people who have not voted before who are energized to vote this year for various reasons, but also people who are worried about election day because of the coronavirus and want to make sure their vote is in early. Is there the trump shy voter . Biden has off saying a narrow lead, but what if it is much narrower than the polls tell us . Lewis i never bought into this notion that there is a huge cohort of trump shy voters. To the extent there is, that is more than offset by the huge numbers of young voters who are coming out to vote who do not get picked up in the polling. The polling has been fairly accurate. There are a number of things that are different. The number of undecided voters is much smaller. Four years ago, over 10 of americans had not made up their mind yet. That number is down to less than 5 this year. There is no viable thirdparty candidates. It is a binary choice. People have made up their minds generally. Trumpare maybe some shy voters, but not enough to sway the election. Tom thank you so much. We look forward to speaking to you after the election, whether that is decided november 3 or march 3. Mr. Lukens worked with the state department for president obama. The dow futures 317. There is a persistent downdraft. Dollar flatness right now. 1677 is maybe the lead item. Yield ine negative europe after mice gdp surprises from selected countries. With first word news, here is ritika gupta. Ritika they were not able to agree on a coronavirus package before the election. Now nancy pelosi and Steven Mnuchin are battling over terms for a postelection deal. The treasury secretary accuses the House Speaker of refusing to compromise. s says she is waiting for mnuchins response. Record quarterly growth. 33 . Quarter gdp surged to Economic Activity after widespread loc