And tom keene on Bloomberg Television, Bloomberg Radio across this nation, one day to the election, and to all of you worldwide, good morning. An incredibly busy newsweek. After the election, weve got the fed, weve got jobless claims, and a jobs report on friday. We are really focused on the election. How do you from london see it. Jonathan elevated volatility going into it, and a breakdown in correlations. For markets, i think it is really tricky right now. Typically you would expect some inverse correlation between stocks and bonds. At are not getting at the moment. Difficult is really to assess what the politics actually mean, and to put together a portfolio around it. Tom we are going to talk to an esteemed guest about that. I got to ask you about the lockdown. We heard earlier this morning the exceptionally difficult weekend Prime Minister johnson had. It is government threatened . Jonathan his government is failing on this front, and plan has failed as well. His party, that is where the rebellion will be. The support will actually come from the opposition, who will vote with him to emblem at this lockdown across england. The lockdown is likely to go through. The opposition within his own enough. Unlikely to be the hope is that you would have an efficient tracking tricks track and trace system until he vaccine. We are back to square one again. President simple, the ,oing after his Health Expert with dr. Fauci andy pandemic. That does affect this dr. Fauci and the pandemic. That does affect the election. Out over fauci coming the weekend, seeming to support joe bidens health approach. How do you construct a portfolio to shield yourself against the risk . You can see on the margins people taking risk down and trying to get some cash or dry powder, something they can spend after they have a sense of which way things are going. There was the second biggest ever weekly withdrawal from the biggest u. S. Highyield bond etfs. Nearly 3. 7 billion was withdrawn last week. Is this because people think theres going to be a rash of defaults . . Is it because they think the fed is going to step away . More likely, it is the analog to battening down the hatches and putting up some boards in manhattan. Downtown tom we welcome all of you on Bloomberg Radio and television. Part of the charm of diana amoa of jp morgan is her early work on trading desk, and as a manager of fixed income portfolio, shes a bit aware that if yield goes up price goes down. We are thrilled she could do enough this morning. I see since early august the price has declined 3 . That is a lot of coupon. How far are we from real price decline in the bond market . Diana it really depends on what we get from these elections, and then how things play out following that in terms of u. S. Policy. We had a range of 0. 5 to 1 on the u. S. Tenyear twoyear rent, looking at various scenarios 10 year to year end, looking at various scenarios. That would be a blue wave outcome. Initially we could get up to 1 , we areen the headwinds facing with covid, cases rising globally, what we are discussing with europe shutting down, i think it would be really tough. Jonathan when volatility is elevated cross asset, how much forced derisking takes place . Diana in the heart of the moment, i think it depends on what kind of portfolios people have constructed. In past political shots, you certainly did see a significant amount of derisking, either because bulls are pointing to a different outcome than what materialized. I am seeing in this particular instance quite the opposite, where the polls seem to be more consistently pointing to a specific outcome, but markets are reluctant because of the of 2016. Es i expect the amount of derisking would be significant less than what we have seen in the past. Out of kkr last week, they iid i dont remember when have seen volatility like today. There seems to believe that because rates are so low, there is no haven, and people are all the one to go to the same exit there is some sort of event that transpired. Is that a sense that you have, the basically the only head right now is having extra cash to be able to respond to something . Sh is extra ca definitely something market already seem to hold. When you look at the function of the bloomberg, a lot of cash went into money market funds. That went from about 3. 6 trillion to 4. 3 trillion dollars, but there is a significant amount of cash already sitting in the sidelines. I would say the frustration for investors who look at traditional 60 40 portfolios is that treasuries havent actually been acting as a hedge in this latest bout of weakness. If you try and understand the logic behind it, it makes sense. We would need repricing is the treasury comes to fund that in the markets, but a failure of that to materialize would impact equities. What investors need to think of is what else could act as a balance to portfolios. I am fortunate that i started my so i can markets, think of several things on e. M. That can work as potential hedges, looking at the options space in em currencies could make sense. That has actually been working really well in certain pairs. It is not that it is impossible to construct portfolios. It is just that investors need to think beyond traditional hedges. Jonathan we needed that Downside Protection last week. And ella merkel speaking in berlin, saying the following. Facing a difficult winter with the virus. Tripling in hospitalizations in intensive care. This has been the case, overwhelming the Health Care System with the concern back in spring, and unfortunately in europe, it is the concern all over again. Tom outside my walkup in manhattan, to see the tents go up as they did in february, march and april, just outside mount sinai, to me it is about hospitalization. I cited south dakota today, sioux falls with some significant issues. What is it like for in hs in the United Kingdom for nhs in the United Kingdom . Diana difficult. It jonathan difficult. It was very localized. They were hoping to have a multitiered system to deal with different regions. Now the Prime Ministers suggesting that could be summing the doesnt just overwhelm a single region, but overwhelms the country. This is about making sure that by christmas, this is not a lot worse. He was recommended by his advisors back in september to have a two week circuit breaker, a two week lockdown to prevent us from getting to where we are now. He chose not to, and here we are. The problem that many in this country have is if we are going to do another lockdown, what is the objective . Is it to get back to where we were before and actually try the track and trace system again and open up more effectively . Or are we just doing this in the hope that we have a vaccine announcement next 30 to 45 days. Tom i am going to point out the fact that these headlines in germany coming from a quantum chemist, and it seems to be a little bit of a difference in the tone from the quantum chemist versus the gentleman wharton, and Prime Minister johnson is a journalist. There is a different tone to a merkel virus headline. Jonathan very much so, but merkel and Prime Minister johnson going in the same direction at the moment. Of jp morgan investment management, thank you. Mosthas been the story of of the United Kingdom going into lockdown. I think now it is fair to say a double dipse is for the european economy. Lisa that is what a lot of economists are expecting, which is a reversal from a couple of weeks ago. The data is moving so quickly, the virus is moving so quickly, how do you game out how big of an eye had, kit these lockdowns. Ill be it is just so hard to game out, and the economist have gotten it wrong. They are following the information, not leading it. Jonathan the language of leadership, the adjustment image. You go from a situation where when asked if you would lockdown the country again, they will say no. They will say it is the last option. Then it is in front of you happening again. That is the experience of this country right now. Living experience of frankly, within mount sinai, is it is all about hospitalization. Is thereicians, that catalyst for reaction, literally bed count. Jonathan that is the pressure point. Chancellor merkel saying november can be a turning point in the virus battle. I think we all hope that is the case. Alongside tom keene and lisa abramowicz, im Jonathan Ferro. Londonup, brian klaas, university professor. We are up seven on the s p 500, we advance a little more than 1 . His is bloomberg ritika withritika the first word news, im ritika gupta. The president ial campaign is now in its final full day. Polls show Democrat Joe Biden leading President Trump nationally and in battleground states. Still, some of those estates were made extra blue close. Both candidates some of those states remain extremely close. With candidates will Campaign Today in pennsylvania. President trump suggesting he may fire dr. Anthony fauci after the election. Over the weekend, found she said over the weekend, fauci said the u. S. Is in for a world of hurt with the virus this winter. Economists said the Federal Reserve wont increase the page of asset purchases the pace of asset purchases this year or next. Most economists say it would not meaningfully boost the u. S. Economy. Fed policymakers meet wednesday and thursday. Briggs and negotiators are moving closer to breaking that impasse over one of the biggest obstacles in the trade deal. A compromise is emerging on the issue of what access boats from the eu will have two british fishing waters. The potential solution would allow britain to claim it has won back control of its seas. Theres one more sign of high demand for that recordsetting ant group ipo this week. Investors are buying shares on the Hong Kong Market at a 50 premium to the listing price. 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. Pres. Trump we should know the result of the election on november 3, the evening of november 3. Thats the way its been, and thats the way it should be. Whats going on in this country . Pres. Trump every day is a mr. Biden every day is a new reminder of how high the stakes are, how far the other side will go to suppress the turnout, especially here in philadelphia. President trump is terrified of what will happen in pennsylvania. Jonathan President Trump and former Vice President joe biden rallying over the weekend, with just one day left as we wrap up the u. S. Election. From london and new york this morning, good morning. Alongside tom keene and lisa abramowicz, im Jonathan Ferro. Monday morning price action looks a Little Something like this. Equities with a lift, still advancing a little more than 1 on the s p 500. In foreignexchange, eurodollar unchanged. Theres that positive correlation, equities, bonds once again. Equities up, bonds up. The other way around on friday, and that spooked a lot of people. The week ahead is absolutely remarkable. The election wrapping up tomorrow. Thursday, i delayed federal decision. Friday is payrolls friday. Tom i am not sure what the fed will do. I will worried about that wednesday at 5 00 p. M. Our team today and tomorrow will try to give you as sophisticated a coverage as we can. Brian klaas is out of minnesota. He has a Cottage Industry going in the United Kingdom looking at the decline of democracy. We are thrilled he could join us this morning. You have been hugely visible and hugely articulate on the decline of democracy. Lets begin with the u. S. Can we stoxx that and resurrect democracy tomorrow . Stanch that and resurrect democracy tomorrow . Brian i think so. This has been from one side predominately. You have rhetoric coming out of the president attacking the press, trying to scapegoat minority communities, and most recently around the election, saying things like we cant trust the votes, even though there is evidence that we can, encouraging supporters to vote twice, etc. So it is a longterm rebuild we are going to need. Tom you are one of the great experts on this. You are a fabric of the northern part of our midwest. Whether we go back to William Jennings bryan, he would long, name the other names, and of course President Trump, this is populism at hand. Do you see populism extending its reach across america, or as you say, with clear and direct messaging, can it be stanched like it was with hugh we long of ey long of with hugh louisiana . Brian whats happened recently is the coronavirus has been reality. The economy has been reality for President Trump. So i think there is a turn towards people who actually understand things, how economies operate and how dependent can be best served. Lisa there are boards over the windows across cities in the United States. This is unusual the day before the election. Theres a feeling of eeriness before the storm. May 11yearold son said to me last night, are we going to be ok . Is it going to be violent . If the sense of violence overstated, or do you get the sense that the unrest in general has that ability of potentially percolating . Brian i am very worried, more than i have been about any election in my lifetime. I think the reason for that is that there is not really an exit ramp for either side here. The stakes are so high that when we wake up wednesday, or potentially much further along if we dont know the results quickly, around half the country is going to find this to be an existential threat because the hypo polarization has taken such route in the United States. I think this is a longerterm project. It is not going to get fixed, no matter the result on tuesday. I am very worried about the prospect of a contested election, especially for widespread unrest. Jonathan we talk about what has happened. Tell me whether attacking the process actually damages the process, given the record turnout we have seen so far in early voting. Been ai think there has really good response here to Voter Suppression in the sense that, in texas, they are more people voting now and have already voted and in the entirety of 2016. With that being said, theres also some really worrying signs. We had a foiled plot to kidnap the governor of michigan. We had murders at protests. We had supporters of the president trying to push a campaign bus for the Biden Campaign off the road. With trump telegraphing that he might declare victory before all the votes are counted, the risks are high. In economic terms, we talk about tail risk. There is a very large tail risk where it is still improbable that there will be widespread unrest and violence, but it is such a damaging prospect that we have to take it very seriously and do whatever we can to stop it. Jonathan i ask this in a really delicate way. It is not a loaded question. Why do you think those stores are boarded up . Who do you think is going to attack them, election morning, come wednesday . Brian i think there is going to be the potential for violence, no matter what the result is, to be honest. I think there is a series of communities that feel extremely invested in this result. I think when you have a situation in which those fans have been flamed by people in power for a very long time, the polarization is at a boiling point. So i think regardless of what happens, it is not just about who wins and who loses. It is also the rhetoric that is extremely damaging for President Trump, that we shouldnt trust the results. Months of saying the election is rigged, despite evidence to the contrary. Regardless of what the result is, there is a significant risk of unrest in american cities. Jonathan brian klaas, appreciate your time this morning. Tom keene, questioning the legitimacy of the outcome before , bothn get the outcome sides potentially could question the legitimacy of that outcome. Tom it is a process, and i must admit it is highly unusual, and may be original this time around. I would say that there is ample history in the United States of these tensions. What is different this time around is the 14 cable tv stations ive got over here on the big wall just past the camera, and also social media. It is different this time around immediacy ofe facebook and instagram that youre glued to all day. Jonathan me on instagram, not so much, 24 hours out from the election. Full coverage beginning on tiktok. I believe that is lisa, not me, doing the moves again. I will take a pass on that. [laughter] coming up tomorrow night, 7 00 p. M. New york on Bloomberg Television and Bloomberg Radio, you will find our coverage of the election still to come. You will not find me on tiktok or active on instagram. Lisa shocker. Jonathan equity futures are up this morning. Futures doing nicely. They advance this monday morning. Good morning to you all. Up 39 points on the s p 500. 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. Good morning to you all. On bloomberg surveillance. You can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save hundreds on your wireless bill. Plus, get 300 off when you buy the Samsung Galaxy note20 ultra 5g. Learn more at your local xfinity store today. Jonathan from new york and london, good morning to all. Alongside tom keene and lisa abramowicz, im Jonathan Ferro live on bloomberg tv and radio. Here is the price action. An equity market with a left 35. The s p 500 we advance things are looking