00:00MATT: SHINY NEW APPLE, THE TECH GIANT UNVEILS ITS LATEST RANGE OF IPHONES. WITH 5G, WALL STREET EXPECTS GROWTH FOR THE COMPANY. CALL FOR A CIRCUIT BREAKER, BORIS JOHNSON -- STRICT -- GOLDMAN SACHS AND BANK OF AMERICA AND WELLS FARGO REPORT LATER TODAY. JP MORGAN AND CITI SHARES FALL. THE MORNING AND WELCOME TO "BLOOMBERG SURVEILLANCE." I'M FRANCINE LACQUA IN LONDON. A LOT A FOCUS IS ON THE BANK RESULTS YESTERDAY. MANY MORE BANKS REPORTING TODAY WITH TECHNOLOGY STOCKS AND APPLE NEWS. WE EXPECT A LOT OF EARNINGS, AND POUND WEAKENING, SOMETHING TO KEEP AN EYE ON. IF YOU LOOK AT EUROPEAN STOCKS, TRAVEL SHARES DECLINING ON CONCERN OF MORE LOCKDOWNS, BUT FINANCIAL SHARES ARE CLIMBING. THEY'D ARE TODAY, OUR ACTIVE ETF, NEW SURVEYS SAY ACTIVE EQUITY FUNDS UNDERPERFORMED IN THE FIRST HALF OF THE YEAR. LET'S GET STRAIGHT TO THE BLOOMBERG FIRST WORD NEWS. > > GOOD MORNING. HERE IN THE U.K., PRIME MINISTER BORIS JOHNSON IS FACING GROWING PRESSURE TO ORDER A NATIONAL CIRCUIT BREAKER LOCKDOWN. THE OPPOSITION LABOUR PARTY IS CALLING FOR INCREASED NATIONWIDE RESTRICTIONS FOR UP TO THREE WEEKS, AFTER DOCUMENTS REVEALED THE SCIENTIFIC ADVISORS CALLED FOR THAT ACTION THREE WEEKS AGO. THE SPRINT TO FIND A MEDICAL BREAKTHROUGH TO CONTAIN CORONAVIRUS STUMBLED THIS WEEK. ELI LILLY IS THE LATEST COMPANY TO PAUSE A TRIAL AS A SAFETY CONCERN. IT IS DEVELOPING AN ANTIBODY THERAPY FOR THOSE WITH SEVERE CASES OF COVID-19. THIS FOLLOWS A SIMILAR MOVE BY JOHNSON & JOHNSON AFTER A TRIAL VOLUNTEER FELL ILL. HOUSE SPEAKER NANCY PELOSI IS CALLING ON THE WHITE HOUSE TO REVAMP ITS LATEST OFFER. MITCH MCCONNELL IS PUSHING FOR A SMALLER SCALE STRATEGY THAT PELOSI QUICKLY REJECTED. MCCONNELL'S PROPOSAL APPEARED TO BE OPPOSED BY DONALD TRUMP, WHO TWEETED, "GO BIG OR GO HOME." BLACKROCK'S LARRY FINK SAID THE WORLD COULD BE GREENER IF OFFICE BUILDINGS NEVER REACH FULL CAPACITY AGAIN. SPEAKING AT AN IMF EVENT HOSTED BY BLOOMBERG, HE SAID IF HALF OF THE WORKERS RETURNED TO OFFICE, TRAFFIC COULD BE INDUCED IN QUALITY OF LIFE IMPROVED. GLOBAL NEWS, 24 HOURS A DAY, ON AIR AND AT BLOOMBERG QUICKTAKE, POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN MORE THAN 120 COUNTRIES. THIS IS BLOOMBERG. MATT: -- FRANCINE: APPLE UNVEILED THE NEWEST IPHONES PROMISING THEY WILL BE LIGHTER WITH 5G TECHNOLOGY. IT HOPES THE LAUNCH OF THE IPHONE 12 WILL LAUNCH NEW GROWTH. > > EACH GENERATION OF CELLULAR TECHNOLOGY HAS BREAKTHROUGH INNOVATIONS AND NEW OPPORTUNITIES FOR DEVELOPERS AND USERS. 5G IS THE MOST EXCITING STEP YET . FOR SO MANY PEOPLE, THIS BECOMES REAL WITH 5G COMING TO IPHONE. FRANCINE: JOINING US NOW IS ALEX WEBB, OUR BLOOMBERG TECH COLUMNIST. WHAT ARE THE UPGRADES THAT A CONSUMER MIGHT FIND ATTRACTIVE? ALEX: FOUR NEW PHONES HERE. THE IPHONE 12, THE STANDARD VERSION WILL COME IN TWO SIZES, AND THE PRO VERSIONS HAVE 5G AND BETTER RANGE PROTECTION AND PHOTOGRAPHY. IT ALLOWS FOR AUGMENTED REALITY IN THE PHONE FIELDS OF VISION. THOSE OF THE HEADLINE INNOVATIONS. A FEW OTHER THINGS AROUND THE EDGES, A WALLET CHARGER ON THE BACK WHICH HAS A MAGNET IN IT TO ATTACH THINGS TO THE PHONES. WE HAVE RESET OUR EXPECTATIONS OF WHAT WE THINK OF AS GAME CHANGING INNOVATION. THE BIGGEST IS 5G. AT THE MOMENT THERE ARE NOT MANY APPLICATIONS FOR THE TECHNOLOGY. IT WILL HAVE SLIGHTLY BETTER DOWNLOAD SPEEDS, BUT THAT WILL NOT NECESSARILY BE SOMETHING THAT WILL CHANGE PEOPLE'S EXPERIENCE. FRANCINE: HOW BIG OF A SELLING POINT IS THE FASTER 5G IPHONE? ALEX: AT THE MOMENT THERE ARE NOT MANY NETWORKS. IT DOES NOT MAKE A BIG DIFFERENCE. THEY WILL COME IN THE NEXT 5-10 YEARS. 5G IS NOT THERE YET, IT IS A WAY TO GET PEOPLE TO SPEND MORE MONEY ON THEIR PHONES. CHINA HAS SIGNIFICANT 5G NETWORKS ALREADY, THERE ARE ALREADY OVER 400,000 ANTENNA FOR 5G ACROSS THE COUNTRY. THE U.S. IS IN SINGLE-DIGIT THOUSANDS. IN CHINA YOU HAVE HUAWEI WITH 5G PHONES ON THE MARKET. IF YOU ARE A CONSUMER WONDERING WHAT TO GET, WITH OR WITHOUT 5G, YOU MIGHT AS WELL GO WITH. IN CHINA YOU MIGHT WANT TO MAKE THAT ARGUMENT. FRANCINE: THANK YOU SO MUCH, ALEX WEBB, TALKING ALL THINGS TECHNOLOGY. COMING UP, ELI LILLY HALTS ITS ANTIBODY TRIALS BECAUSE OF SAFETY CONCERNS. FRANCINE: ECONOMICS, FINANCE, POLITICS. THIS IS "BLOOMBERG SURVEILLANCE. " > > TENCENT IS PLANNING TO INCREASE ITS UNIVERSAL MUSIC GROUP , AND TELLS BLOOMBERG THE CHINESE TECH GIANT WILL MAKE THE MOVE FOR ITS OPTION EXPIRES IN JANUARY. LAST YEAR THE COMPANY LED A CONSORTIUM THAT GOT MUSIC FROM VIVENDI. THE WORLD'S BIGGEST CINEMA CHAIN IS CONSIDERING BANKRUPTCY. SOURCES TELL BLOOMBERG IT IS PART OF A RANGE OF OPTIONS FOR AMC ENTERTAINMENT AS IT TRIES TO EASE ITS DEBT LOAD, AS THE PANDEMIC IS KEEPING MOVIEGOERS FROM THE BIG SCREEN AND HAMPERING STUDIOS FROM MAKING NEW MOVIES. NO OFFICIAL COMMENT FROM AMC. FIDELITY INVESTMENT PLANS TO HIRE 4000 PEOPLE OVER THE NEXT SIX MONTHS. IT WILL BE IN AREAS INCLUDING FINANCIAL ADVISORS AND CUSTOMER SERVICE. IT WILL MEAN A 15% INCREASE IN ROLES, AND INSISTING EXISTING CLIENTS WILL MAKE MORE MONEY AS ITS PEERS STRUGGLE. FRANCINE: HOPE FOR A QUICK VIRUS CURE TAKES ANOTHER HIT. ELI LILLY IS THE LATEST TO HALT CLINICAL TRIALS OF ITS ANTIBODY THERAPY BECAUSE OF SAFETY CONCERNS. SHARES FELL LIKE JOHNSON & JOHNSON. SEVERAL EUROPEAN COUNTRIES ARE TAKING STEPS TO CONTROL ITS RECORD SURGE IN CASES. CITIZENS ARE BEING CALLED TO MAKE SACRIFICES. BARS AND PUBS ARE CLOSING TODAY AND THE WORST HIT PARTS OF ENGLAND AS BORIS JOHNSON FACES GROWING PRESSURE FOR A STRICTER LOCKDOWN. JOINING US NOW IS MELANIE BAKER, SENIOR ECONOMIST, ROYAL LONDON ASSET MANAGEMENT. WE HEARD THE IMF BANK, WHEN YOU LOOK AT THE ECONOMY, MAYBE IT IS BETTER THAN EXPECTED, OR REVISED UPWARDS. BUT WE HAVE SO MUCH CONCERN ABOUT SOME OF THE DOWNSIDE RISKS. DO YOU SEE THOSE CRYSTALLIZING? MELANIE: THIS WILL ALWAYS BE A DIFFICULT PHASE OF THE RECOVERY. THE INITIAL RECOVERY WAS DRIVEN BY REOPENING WITH HELP FROM POLICY AND PENT-UP DEMAND. THIS WILL BE A SLOWER AND MORE DIFFICULT PHASE OF THE RECOVERY. WE KNEW THERE WOULD BE SETBACKS, AND THAT IS VERY MUCH WHAT WE ARE SEEING. IT IS IN LINE WITH MANY ECONOMISTS FORECASTS, A BUMPY PERIOD BEFORE WE GET A VACCINE. IT COMES BACK TO THE POINT YOU WERE MAKING THAT GETTING TO A VACCINE IS IMPORTANT FOR A NORMALIZED PHASE OF RECOVERY NEXT YEAR. FRANCINE: WHEN YOU LOOK AT SOME OF THE THINGS THAT WORRY THE MARKET, WHERE WILL WE SEE THE MOST SCARRING OF THE ECONOMY? MELANIE: ONE AREA MOST ECONOMISTS ARE WORRIED ABOUT OUR PERMANENT JOB LOSSES. YOU CAN SEE IF YOU LOOK AT THE U.S. NUMBERS FOR EXAMPLE, THEY ARE IMPROVING, JOBS ARE BEING ADDED, BUT YOU CAN SEE UNDER THE SURFACE THAT PERMANENT JOB LOSSES ARISING. THAT IS A CONCERN. ONE OF THE OTHER WORRIES I HAVE IS AROUND BALANCE SHEET DAMAGE, THE AMOUNT OF DEBT COMPANIES HAVE TO TAKE ON TO GET THROUGH THE CRISIS, AND HOW THAT GOES ON TO LIMIT THE RECOVERY IN INVESTMENT AND HIRING AS WE GO FORWARD. FRANCINE: WHEN YOU LOOK AT SOME OF THE THINGS THAT MARKETS LOOK AT, ARE THEY DETACHED TO WHAT ECONOMISTS ARE SEEING LONGER-TERM FOR SOME OF THE PRESSURES WE COULD HAVE IN A SECOND LOCKED DOWN FURTHER RESTRICTIONS? MELANIE: THAT IS AN INTERESTING POINT, I DON'T THINK SO. MARKETS ARE LOOKING QUITE LONG, A LITTLE BIT THROUGH IN SOME SENSE . ECONOMIST ARE DOING A MIXTURE OF THINGS. THEY ARE WORRIED ABOUT THE NEAR TERM BUMPY PICTURE FOR THE ECONOMY, BUT ALSO LOOKING AHEAD AND ASSUMING THE PANDEMIC WILL BE OVER AND WE WILL GO BACK TO A SENSE OF NORMALITY. ECONOMISTS AND MARKETS ARE THINKING ABOUT THESE LONGER-TERM POSSIBLE IMPACTS AS WELL, AND WHETHER THE PANDEMIC ACCELERATES SOME OF THE STRUCTURAL CHANGES THAT WE HAVE BEEN SEEING, MOVING TO ONLINE SHOPPING IN SUCH. FRANCINE: LET'S TALK ABOUT THE U.S. ELECTION AND POLITICS. 20 DAYS UNTIL THE U.S. ELECTION. PRESIDENT TRUMP AND FORMER VICE PRESIDENT BIDEN HIT THE CAMPAIGN TRAIL IN PENNSYLVANIA AND FLORIDA WITH DIFFERENT MESSAGES. > > I ASK YOU TO DO ME A FAVOR, SUBURBAN WOMEN, WILL YOU LIKE ME? I SAVED YOUR DAMN NEIGHBORHOOD. I DON'T HAVE TIME TO BE NICE. THEY WANT ME TO BE POLITICALLY CORRECT. LET'S TALK ABOUT IT FOR THE NEXT 10 YEARS -- NO. WE SAVED SUBURBIA IN THE U.S. > > I'M RUNNING AS A PROUD DEMOCRAT, BUT I WILL GOVERN AS AN AMERICAN PRESIDENT. [CARS HONKING] I WILL WORK FOR THOSE WHO VOTE AGAINST ME, THOSE WHO VOTED FOR ME, THAT IS THE JOB OF THE PRESIDENT, TO HEAL. IT IS A DUTY TO CARE. CARE FOR EVERYONE. FRANCINE: MEANWHILE, U.S. STIMULUS IS DEADLOCKED AS NANCY PELOSI ASKS THE WHITE HOUSE TO REVAMP ITS OFFER. IT SAYS THE $1.8 TRILLION PACKAGE FALLS SHORT. LET'S GET BACK TO MELANIE BAKER, SENIOR ECONOMIST, ROYAL LONDON ASSET MANAGEMENT. IF YOU LOOK AT THE STIMULUS NEEDED FOR THE U.S. ECONOMY, ARE YOU WORRIED IT WILL FALL SHORT, AND WHAT DOES THAT MEAN FOR INFLATION EXPECTATIONS GOING FORWARD? MELANIE: IT HAS ALREADY FALLEN SHORT. THERE WAS EXPECTATION EARLY IN THE YEAR THAT IF BY JULY WE HAD ANOTHER FISCAL PACKAGE TO CARRY ON THE PACKAGE THAT EXPIRED, IT HAS ALREADY FALLEN SHORT IN THAT SENSE. YOU SAW IN THE AUGUST PERSONAL INCOME NUMBERS, PERSONAL DISPOSABLE INCOME WHICH IS ABOUT THE FALLEN UNEMPLOYMENT BENEFITS. THAT DISAPPOINTMENT HAS ALREADY HAPPENED. THERE IS WIDESPREAD EXPECTATION ONCE WE ARE THROUGH THE ELECTION PERIOD, MAYBE WE WAIT UNTIL EIGHT JANUARY BUT THERE WILL BE ANOTHER FISCAL PACKAGE IN THE U.S., THAT IS BUILT INTO MY EXPECTATIONS. IT IS RISKS FOR NOW, AND IT IS LOOKING INCREASINGLY UNLIKELY WE WILL GET ANY BEFORE THE ELECTION. IT IS A NEAR-TERM WARRIOR FOR CONSUMER SPENDING. AS FOR INFLATION EXPECTATIONS, AS LONG AS THERE IS AN EXPECTATION IT WILL COME THROUGH AT SOME POINT NEXT YEAR, I THINK THAT IS OK. IN THE MEANTIME WE HAVE SEEN ACTION FROM THE FED TO TRY TO BOLSTER INFLATION EXPECTATIONS. FRANCINE: IF YOU GO BACK TO THE RECOVERY WE ARE EXPECTING WORLDWIDE, ARE WE TOO PESSIMISTIC OR OPTIMISTIC? MELANIE: IT DEPENDS ON WHO YOU ASK. YOU HAVE A DIFFERENCE IN VIEW, BUT IF I LOOK AT THE FORECAST PUBLISHED BY THE IMF YESTERDAY, THEY ARE NOT FAR OFF THE FORECASTS THAT A LOT OF ECONOMIST ARE EXPECTING, WHICH IS THAT INITIAL V-SHAPED, NOW IT IS GETTING BUMPY. ONCE WE GET A WIDELY AVAILABLE VACCINE AND CAN RETURN TO NORMAL, THIS IS A RECOVERY THAT WILL TAKE MORE QUARTERS THAN MULTIPLE YEARS TO GET BACK TO PRECRISIS LEVELS. FRANCINE: WHEN YOU LOOK AT SOME OF THE ASIAN COUNTRIES, ARE THEY GOING TO -- WE LOOKED AT EXPORT NUMBERS OUT OF CHINA, ARE THEY GOING TO DO BETTER THAN THE U.S. AND EUROPE IN THE NEXT 12 MONTHS? MELANIE: OOF, THAT IS A DIFFICULT ONE. CERTAINLY CHINA HAS BENEFITED FROM FISCAL STIMULUS ELSEWHERE. AND ALSO PRODUCING A LOT OF THINGS THE WORLD HAS BEEN DEMANDING IN TERMS OF MEDICAL EQUIPMENT, PPE. THAT IS NOT NECESSARILY GOING TO LAST THROUGH THE NEXT YEAR, AND THERE ARE ISSUES AROUND TRADE RELATIONS, U.S.-TRADE RELATIONS WHICH WILL GO INTO THE FUTURE YEARS. I DO NOT SEE A REASON WHY -- THE U.S. WILL GET FISCAL STIMULUS NEXT YEAR AND A WIDELY AVAILABLE VACCINE, I DON'T SEE WHY WE WOULDN'T SEE A STRONG RECOVERY ULTIMATELY IN THE U.S. FRANCINE: THE BIGGEST CONCERN OF MARKETS IS THERE IS A RUNAWAY INFLATION BECAUSE OF THE STIMULUS, THAT IT SURPRISES US AND WE WILL HAVE STIMULUS FROM CENTRAL BANKS TAKEN AWAY MORE QUICKLY THAN WE THINK. HOW LIKELY IS THAT? IT IS IT -- IS IT SOMETHING YOU ARE WRITING OFF OR MONITORING FOR A COUPLE OF QUARTERS? MELANIE: RUNAWAY INFLATION RISK, IT IS SOMETHING I AM MONITORING BUT NOT BUILT IN FOR MY CENTRAL CASE FORECAST. PART OF THE REASON IS I'M ASSUMING THIS CURRENT RELATIONSHIP BETWEEN MONETARY AND FISCAL POLICY, WHETHER THERE IS AN ELEMENT OF COORDINATION PUTTING MAXIMUM STIMULUS INTO THE ECONOMY, THAT DOES NOT LAST. WE HAVE STILL GOT INDEPENDENT CENTRAL BANKS THAT WHEN INFLATION GETS A LITTLE OUT OF HAND WILL REVERSE COURSE AND START RAISING RATES. THAT IS NAIVE BUT WHERE I AM COMING FROM AT THE MOMENT. WE HAVE SEEN A HUGE AMOUNT OF STIMULUS IN THE SYSTEM AND CHANGES IN THE APPROACH TO MONETARY POLICY. IT IS SOMETHING THAT MONITORS ARE WATCHING. FRANCINE: THANK YOU SO MUCH, MELANIE: -- THANK YOU SO MUCH MELANIE BAKER, SENIOR ECONOMIST, ROYAL LONDON ASSET MANAGEMENT. FRANCINE: THIS IS "BLOOMBERG SURVEILLANCE." I'M FRANCINE LACQUA IN LONDON. JP MORGAN AND CITIGROUP ARE REPORTING BETTER-THAN-EXPECTED EARNINGS YESTERDAY, BUT SHARES OF THE GROUP WERE ACTUALLY DOWN. JOINING TO DISCUSS ALL OF THE EARNINGS SEASON IS DANI BURGER. WHY WERE INVESTORS IS APPOINTED YESTERDAY? DANI: SENTIMENT RETURNED WHILE EXECUTIVES WERE SPEAKING ON THE EARNINGS CALL. AT FIRST PEOPLE WERE EXCITED THAT THEY COLLECTIVELY REPORTED LOAN LOSSES THAT WERE HALF THE AMOUNT EXPECTED, BUT THEY MADE CLEAR IT WAS NOT A FUNDAMENTAL CHANGE ON THEIR VIEW ON THE ECONOMY. THEY COULD AFFORD NOT TO DO IS MUCH THIS QUARTER. THEY PAINTED A PICTURE OF AN ECONOMY THAT IS A SLOW GRIND TO RECOVERY. JP MORGAN'S CFO EMPHASIZED THIS ON THE CALL AND SAID THEY EXPECT SIGNIFICANT CHARGE OFFS WHEN IT COMES TO 2021, BUT UNTIL THEN IT MIGHT BE A PAUSE. THIS COMMENTARY WILL BE THE FOCUS WE HEAR FROM GOLDMAN SACHS AND BANK OF AMERICA TODAY. FRANCINE: CITI FELL MORE THAN TWO TIMES AS MUCH IS JP MORGAN. DANI: SOME OF THEIR HIGHER COSTS AND RECKITT A TORY -- THEY WILL NOT BE THE NEXT WELLS FARGO IN TERMS OF REGULATORY PRESSURE. ANOTHER ANALYST ASKED WHY NOT PUT THE COMING CEO IN NOW TO SHOW A CLEAR CHANGE. SOME VERY STRONG WORDS ON THE ANALYST CALLS. FRANCINE: THANK YOU VERY MUCH, DANI BURGER. YESTERDAY WE HAD THE ASSET MANAGER A BLACKROCK REPORTING. COMING UP, ARE ACTIVE ETF'S WORTH THE MONEY? 40% OF ACTIVE FUNDS UNDERPERFORMED IN THE FIRST HALF OF THE YEAR. WE WILL DEBATE ACTIVE VERSUS PASSIVE IN OUR WEEKLY SHOW "ETF IQ EUROPE." THE REST OF OUR FOCUS IS ON BANK EARNINGS. WE HAVE MORE BANK EARNINGS TODAY, WELLS FARGO AND BANK OF AMERICA LATER TODAY. EUROPEAN STOCKS ARE MIXED. TRAVEL CONCERNS OVER FURTHER LOCKDOWNS. FRANCINE: SHINY NEW APPLES. THE TECH GIANT UNVEILS ITS LATEST RANGE OF IPHONES, NOW WITH 5G SPEED. WALL STREET EXPECTS THE NEW OFFERINGS WILL KICK OFF A NEW CYCLE OF SALES GROWTH FOR THE COMPANY. CALLS FOR A CIRCUIT BREAKER. PRESSURE RISES ON U.K. PRIME MINISTER BORIS JOHNSON AS DAILY VIRUS CASES SURPASS 17,000. FRESH RESTRICTIONS HIT EUROPEAN COUNTRIES AS INFECTIONS SPIKE. AND WATCHING WALL STREET WHILE GOLDMAN SACHS, BANK OF AMERICA, AND WELLS FARGO REPORT LATER TODAY, THIS AFTER J.P.MORGAN AND CITI SHARES FALL DESPITE SURPRISING ON THE UPSIDE. GOOD MORNING, EVERYONE, AND HAPPY WEDNESDAY. A LOT GOING ON IN THE MARKETS. THIS IS "BLOOMBERG SURVEILLANCE." I'M FRANCINE LACQUA IN LONDON. TOM KEENE READJUSTING HIS TIE IN NEW YORK. TOM: 20 DAYS. FRANCINE: THE FOCUS IS ON U.S. POLITICS AND WE WILL HAVE LESLIE VINJAMURI ON SHORTLY, BUT THE OTHER QUESTION IS WHERE -- WHAT HAS APPLE BECOME? TOM: INSTEAD OF THE MARKETS AND THE NASDAQ WAR THAT WE HAVE SEEN , TIES INTO APPLE, THIS WAS ACTUALLY, FRANCINE, A HUGE DEAL YESTERDAY. ARGUABLY THE BIGGEST MEETING THEY HAVE HAD IN THREE YEARS. WE ARE NOT GOING TO GO APPLE FAN BOY ON IT AND EXPLAIN ALL THE STUPID IS THAT AND THE OTHER THING. BUT I ALSO WANT TO GO IN WITH ALEX WEBB, SORT OF THE RACKET THAT THEY'VE GOT WHERE EVERYBODY HAS TO UPGRADE BECAUSE THIS IS OLD TECHNOLOGY. THIS PHONE IS A FAILURE. I HAVE TO GET RID OF IT. FRANCINE: THE QUESTION I HAVE BEEN ASKED THE MOST IS, DO WE HAVE 5G HERE, AND PEOPLE JUST DON'T KNOW YET. LET'S GET TO THE BLOOMBERG FIRST WORD NEWS WITH LEIGH-ANN GERRANS. LEIGH-ANN: PROSPECT OF ANOTHER STIM LIST PACKAGE BEFORE ELECTION DAY LOOK BLEAK. PRESIDENT DONALD TRUMP AND SENATE REPUBLICANS ARE AT ODDS. THE PRESIDENT IS URGING THEM TO "GO BIG OR GO HOME." SENATE MAJORITY LEADER MITCH MCCONNELL IS ONLY ADMITTING TO A VOTE ON SMALL BUSINESSES. NANCY PELOSI SAYS THE LATEST OFFER IS NOT BIG ENOUGH. THE WORLD'S TOP CENTRAL BANKS ARE URGING GOVERNMENTS TO KEEP SPENDING. THEY SAY THAT CONCERNS ABOUT MOUNTING DEBT SHOULD BE PUT ASIDE UNTIL THE ECONOMIC RECOVERY FROM THE CORONAVIRUS IS COMPLETE. THE IMF IS NORMALLY A CHAMPION OF RESTRAINT, BUT THE FUN DEGREES IT IS TOO EARLY TO END SUPPORT. HERE IN THE U.K., THERE IS GROWING PRESSURE ON PRIME MINISTER BORIS JOHNSON TO ORDER A CIRCUIT BREAKER LOCKDOWN. THE OPPOSITION LABOR PARTY AND GOVERNMENT SAYS IT IS NEEDED TO GET THE CORONAVIRUS UNDER CONTROL. DEATHS HAVE SOARED TO THE HIGHEST LEVEL SINCE JUNE. AND RUSSIA HAS RULED OUT A DEAL WITH THE U.S. ON NUCLEAR WEAPONS BEFORE THE PRESIDENTIAL ELECTION. THE DEPUTY FOREIGN MINISTER WILL HAVE A FREEZE ON THEIR ARSENALS -- CALLED A FREEZE ON THEIR ARSENALS UNACCEPTABLE. GLOBAL NEWS 24 HOURS A DAY, ON AIR AND AT BLOOMBERG QUICKTAKE, POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN MORE THAN 120 COUNTRIES, I'M LEIGH-ANN GERRANS. THIS IS BLOOMBERG. FRANCINE? TOM? TOM: THANK YOU SO MUCH. GET OUT THE CALENDAR, DECEMBER 31, THE E.U. HEATING UP WITH SERIOUS HEADLINES. ONE OF THEM COMING OUT RIGHT NOW -- GREAT WOODEN SIGNALS IT WILL NOT WALK AWAY DEBT GREAT BRITAIN SIGNALS IT WILL NOT WALK OUT FROM -- THERE ARE OTHER HEADLINES WITH THESE IMPORTANT MEETINGS THAT FRANKLY, FRANCINE KNOWS A LITTLE BIT MORE ABOUT THAN ME. STERLING MOVES ON THIS ACTION. 1.2939. SOME ODDITIES IN THE MARKET, BUT THE MAJOR THEME IS NASDAQ UP, THE NASDAQ 100, NOT THE COMPOSITE. SPX UP 16 POINTS. THAT IS A NICE BIG MOVE, .4%. ON THE SCREEN, 12,140. THAT IS A QUOTE WE USUALLY DON'T GIVE. THAT IS THE NASDAQ 100, AND THAT IS WITH THE PROS ARE WATCHING RIGHT NOW, LIT UP BY TECHNOLOGY. YOU WILL HEAR ME TALKING ABOUT THAT A LOT MORE. TURKISH LIRA, ANOTHER UGLY DAY, OUT TO 7.95. WE ARE ON THE EIGHT-LIRE TO THE DOLLAR WATCH. FRANCINE: GOING BACK TO THE BRITISH POUND, WILL IT DID ERASE LOSSES, SAYING THE U.K. HAS SIGNALED IT WILL NOT WALK AWAY FROM E.U. TRADE TALKS IMMEDIATELY. WHY THIS IS IMPORTANT, THERE IS THAT DECEMBER 31 DEADLINE, WHICH SHE RIGHTLY SAID WAS THE BIG ONE, BUT THEN THERE WAS THE SELF-IMPOSED U.K. DEADLINE FOR TOMORROW, OCTOBER 15, WHERE THEY SAID IF THERE WAS NOT OF PROGRESS BY THEN, THEY WOULD WALK AWAY. THIS GOES AGAINST WHAT THEY INITIALLY DECIDED. AND WHAT I'M HEARING FROM INSIDERS IS THAT WE THINK THERE IS A CALL BETWEEN BORIS JOHNSON AND THE COMMISSION PRESIDENT TODAY. BORIS JOHNSON NOW TAKING THIS AND HAND HIMSELF TO TRY AND PUSH AWAY FROM -- TRY TO PUSH A WAY FORWARD. A LOT OF THE EARNINGS WILL MOVE SOME OF THE EUROPEAN STOCKS, WHICH IS WHY MY DATA CHECK ALSO LOOKED AT EUROPEAN STOCKS COMING PUTTING FINANCIAL SHARES UP, LEISURE SHARES DOWN, BECAUSE OF EXTRA POSSIBLE RESTRICTIONS OR LOCKDOWNS IN THE ECONOMY. APPLE HAS UNVEILED ITS NEW IPHONE 12 MODELS, PROMISING THEY WOULD BE THINNER, LIGHTER, AND FASTER, WITH THE LONG-AWAITED 5G TECHNOLOGY. > > EACH GENERATION OF CELLULAR NETWORK TECHNOLOGY ON IPHONE HAS ENABLED BREAKTHROUGH INNOVATIONS AND ENTIRELY NEW OPPORTUNITIES FOR DEVELOPERS AND USERS. AND 5G IS THE MOST EXCITING STEP YET. FOR SO MANY PEOPLE, THIS ALL BECOMES REAL WITH 5G COMING TO IPHONE. FRANCINE: THAT WAS APPLE CHIEF EXECUTIVE TIM COOK AT THE VIRTUAL PRODUCT LAUNCH YESTERDAY. JOINING US, ALEX. IT MIGHT BE AN INTERESTING PHONE AND SOMETHING PEOPLE WANT, BUT IF I DON'T HAVE 5G RIGHT NOW, WHY SHOULD I GET IT? ALEX: THAT IS A VERY BIG ASK. INCREMENTAL IMPROVEMENTS FROM THE PREVIOUS GENERATION, I ACTUALLY THINK THE BEST THING IS THE FACT THAT IT NO LONGER HAS -- IT WILL HAVE THE FLAT EDGES, MEANING THE PHONE IS A LOT LESS LIKELY TO CRACK. THAT IS PROBABLY THE BIGGEST JUMP OUT FEATURE IN MY EYES. WITHOUT 5G IT COMES SHORT OF BEING USEFUL, BUT IT WILL NOT BE A GAME CHANGER ANYTIME SOON. FRANCINE: HOW QUICKLY HIS 5G COMING? IT IS DIFFERENT THAN IF YOU'RE SITTING IN LONDON, IN NEW YORK THAN SOMEWHERE ELSE. DO WE BRING BACK THE 5G CONVERSATION TO THE FOREFRONT? ALEX: U.S. IS FAR LESS PROPORTIONALLY THAN THE U.K., BUT IN CHINA THEY HAVE 400,000 5G MADE STATIONS READY. THEY HAVE ALREADY SOLD 98 MILLION 5G PHONES ON CHINA MOBILE. THIS IS REALLY A PLACE TO GET THE CHINESE MARKET IN ORDER TO COMPETE IN CHINA. APPLE FEELS IT NEEDS TO HAVE -- EVEN THOUGH THERE ARE NOT THAT MANY APPLICATIONS FOR 5G TECHNOLOGY YET. TOM: I WANT TO GET AWAY FROM THE FAN BOY STUFF. THE MIRACLE OF ALL THIS ARE THE CHIPS. I WAS FLABBERGASTED A FEW DAYS AGO WHEN THEY TALKED ABOUT THE NEW A14 CHIP DOUBLING OPERATIONS PERSPECTIVE -- DOUBLING OPERATIONS PER SECOND. HOW DOES APPLE DO THAT? WHY DO THEY DO THAT, AND NO ONE ELSE CAN DO IT BUT APPLE AS THEY MOVE THE LETTER A14 CHIP OUT TO THE PUBLIC? ALEX: IT IS PARTLY A QUESTION OF CAPEX. THEY HAVE DEEPER POCKETS THAN ANYONE ELSE IN THE WORLD WHEN IT COMES TO R & D, AND THEY ARE LOOKING AT THE MOST INTENSIVE PIECE OF THE R & D JIGSAW IN CHECK. THEY HAVE HUGE TEAMS WORKING ON THIS, AT LEAST LEAST IN ISRAEL. THEY HAVE GIVEN -- THEY HAVE DONE SOME CANDY ACQUISITION OF -- THEY HAVE DONE SOME CANNY ACQUISITIONS OF CHIP COMPANIES. TO PLAY THIS R & D, THEY HAVE TO BE CLOSE TO THE METERS IN THIS SPACE. THEY THEY BUILD ON THE ARM ARCHITECTURE. TOM: IS ANYONE EVEN CLOSE TO USING THE AX BIONIC CHIP PASS? IS THERE ANY EQUIVALENCY? IS SAMSUNG EVEN REMOTELY CLOSE TO THE RIGID, EVERY YEAR A LEAP CONDITION IN CHEAP -- IN CHIP ENGINEERING? ALEX: SAMSUNG STAFF IS BROADLY -- SAMSUNG'S STUFF IS BROADLY COMPARABLE. EACH CHIP HAS ITS OWN PROS AND CONS. SAMSUNG MAY DO THIS AT A SCALE WHICH APPLE DOESN'T QUITE YET, AND APPLE USES A LOT SAMSUNG CHIPS. SOME MODELS, THERE IS AN ASSERTION THAT ACTUALLY SAMSUNG MAKES MORE MONEY FROM THE IPHONE THEN IT DOES FROM ITS OWN FUNDS BECAUSE IT HAS COMPONENTS IN THE IPHONE. TOM: WHAT ALEX SAID IS SO PROFOUNDLY IMPORTANT, THAT SAMSUNG DOES BETTER NAKED PARTS FOR THE IPHONE THEN THEY DO PLAYING AROUND WITH THEIR OWN LESS PROFITABLE STUFF. FRANCINE: I REALLY LEARNED SOMETHING. I DON'T KNOW WHAT CHIP IS IN MY PHONE, BUT I WILL CERTAINLY FIND OUT DURING THE BREAK. ALEX WEBB JOINING US ON THE LEGS APPLE PRODUCTS. COMING UP, LESLIE VINJAMURI. TOM: GOOD MORNING, EVERYONE. BLOOMBERG SURVEILLANCE. THRILLED YOU ARE WITH US. FUTURES UP 15, DELL FUTURES 1.01, PUTTING IT 28,686. 35% OF THE NASDAQ 100 IS THREE STOCKS -- APPLE, AMAZON, AND MICROSOFT. 34 POINT PERCENT. YOU CAN FIND THAT ON THE BLOOMBERG TERMINAL. RIGHT NOW YOU CANNOT FIND LESLIE VINJAMURI'S WORLD ON THE BLOOMBERG TERMINAL. YOU CAN IN NEWS. IT IS ABOUT POLITICS AND THE RAW EMOTION OF WHAT IS OUT THERE RIGHT NOW. SHE IS HEAD OF THE U.S. AND AMERICA'S PROGRAM. I WANT TO TRY OUT A QUOTE FROM YOUR NEW STUDY, AND MAYBE WHAT WE WILL SEE NOT AFTER THE FIRST TUESDAY OF NOVEMBER BUT SOMETIME IN THE VICINITY OF FEBRUARY ONE AS WELL. IT WILL NOT BE LOST ON VICE PRESIDENT BIDEN, THEN PRESIDENT BIDEN, IF HE'S ELECTED, THAT THE LAST TWO BRITISH PRIME MINISTERS HAVE GONE OUT OF THEIR WAY TO HUMOR DONALD TRUMP. YES, THEY DID. AS A PROUD IRISH-AMERICAN, BIDEN HAS ALREADY WARNED HE WILL TAKE A DIM VIEW OF ANY U.K. MOVES AROUND THE COMPLETION OF BREXIT AT THE END OF THIS YEAR, THE RISK UNDERMINING THE ACCLAIMED GOOD FRIDAY AGREEMENT OF 1998. LESLIE VINJAMURI, THIS IS NOT ON THE RADAR OF PENNSYLVANIA AND FLORIDA, BUT IT DOES ADDRESS TERM TWO OF TRUMP OR TERM ONE OF BIDEN. WILL THERE BE A STARK DIFFERENCE TO THE UNITED KINGDOM? LESLIE: WELL, I THINK THERE WILL BE ON ANY NUMBER OF THINGS. NOT THAT COMMENT BY SIR PETER ROSS MAKE OFF, THE FORMER U.K. AMBASSADOR TO THE UNITED STATES. YOU SEE THE DEMOCRATS PUSHING VERY HARD ON THIS QUESTION THAT THE IRISH BORDER AND THE IMPLICATIONS FOR THE FUTURE OF THE U.S., U.K. FREE-TRADE DEAL. BUT I THINK MORE GENERALLY, ACTUALLY, IF THERE IS A CHANGE OF ADMINISTRATION, A CHANGE OF LEADERSHIP IN THE UNITED STATES, VICE PRESIDENT BIDEN IS VERY LIKELY TO COME OVER, SPEND A LOT OF TIME IN EUROPE, AND TO EXPECT A LOT OF EUROPE, ESPECIALLY WHEN IT COMES TO THE VERY BIG QUESTION OF CHINA, QUESTIONS OF 5G TECHNOLOGY, NATIONAL SECURITY. PEOPLE ARE GOING TO WANT TO SEE EUROPE COOPERATING WITH THE UNITED STATES IN EXCHANGE FOR A MUCH MORE PRESENT, COMMITTED AMERICA. AS A PARTNER, NOT ONLY WITH NATO, BUT ON ANY NUMBER OF ISSUES. I THINK IT WOULD BE A VERY BIG DIFFERENCE. WE ARE WEEKS AWAY FROM AN ELECTION, AND NONE OF US -- TOM: TO THE ELECTION, AND OF COURSE THE PRESIDENT IN PENNSYLVANIA YESTERDAY, VICE PRESIDENT BIDEN AND FLORIDA, IT IS NOW THAT EXHAUSTING DAY TO DAY GRIND. NORTH CAROLINA CAME UP YESTERDAY. WHICH STATE MATTERS TO DR. BENJAMIN -- TO DR. LESLIE VINJAMURI? LESLIE: WE ARE ALL WATCHING PENNSYLVANIA. I PERSONALLY AM WATCHING FLORIDA BECAUSE WHAT HAPPENS ON ELECTION DAY IS GOING TO COUNT SO MUCH, NOT ONLY ABOUT WHICH WAY THE ELECTIONS GO BUT HOW QUICKLY IT IS DECIDED. I THINK ALL OF US ARE VERY CONCERNED THAT IF THE ELECTION RESULT IS DELAYED FOR SEVERAL WEEKS, THE POTENTIAL FOR INSTABILITY, UNREST, CONTESTATION IS SIGNIFICANT. SO FLORIDA IS THE STATE I AM WATCHING. MOST OF IT IS VERY CLOSE. FRANCINE: DO YOU WORRY ABOUT TURNOUT? IF TURNOUT ISN'T GREAT, DOES IT AUTOMATICALLY GIVE TRUMP A BETTER CHANCE OF WINNING? LESLIE: I RETWEETED THIS MORNING DAVID WESTERMAN OF THE POLITICAL REPORT, ANTICIPATING RECORD TURNOUT, BETWEEN 150 MILLION AND 160 MILLION AMERICANS. IN 2016, THERE WERE ABOUT 137 MILLION AMERICANS, SO PEOPLE ARE MOBILIZED, PEOPLE ARE PASSIONATE ON BOTH SIDES. THEY WANT TO VOTE. THE QUESTION, AS WE KNOW, IS WHAT WILL GO WRONG IN THE PROCESS OF VOTING? IN VIRGINIA, THERE WAS GREAT DYSFUNCTIONALITY. THERE ARE VERY LONG LINES, AND WE HAVE SEEN THIS IN THE LAST DAY OR TWO. THERE ARE ALL SORTS OF BARRIERS TO VOTING, BUT THERE IS NO DOUBT THAT PEOPLE ARE READY TO VOTE, THEY WANT TO VOTE, THEY WANT TO PARTICIPATE. AMERICA IS ABSOLUTELY ENERGIZED BY THIS ELECTION. FRANCINE: WHAT IS THE BRACKET OR TYPE OF VOTER THAT PRESIDENT TRUMP NEEDS TO TRY AND REGAIN RIGHT NOW? LESLIE: WELL, IT HAS BEEN VERY INTERESTING. WHAT WE HAVE SEEN FOR THE LAST FOUR YEARS IS THAT PRESIDENT TRUMP HAS MAINTAINED THAT BASE, BUT HE HAS GRADUALLY LOST A NUMBER OF OTHER GROUPS THAT WERE VERY IMPORTANT FOR HIM WINNING IN 2016. SO RIGHT NOW HE IS PUSHING HARD TO GET SUBURBAN WOMEN BACK. REMEMBER, 53% OF WHITE WOMEN VOTED FOR PRESIDENT TRUMP IN 2016. BUT WHAT WE HAVE SEEN IN THE CURRENT PERIOD IS THE ONLY FEMALE DEMOGRAPHIC THAT IS REALLY STAYING WITH HIM ARE THOSE WOMEN WHO DID NOT GO TO UNIVERSITY, DID NOT GO TO COLLEGE. THE WOMEN WHO HAVE GONE TO COLLEGE HAVE REALLY BEGUN TO PEEL OFF. SO HE IS FIGHTING FOR THE WOMEN IN THE SUBURBS, AND THERE'S ALSO THE QUESTION OF WHO IS GOING TO GET THE OLDER AMERICANS VOTING FOR HIM. NOW IT IS INCREASINGLY CLOSE. A LOT OF OLDER AMERICANS ARE SHOWING THAT THEY ARE SUPPORTING VICE PRESIDENT BIDEN. THAT IS ANOTHER REALLY IMPORTANT BATTLE RIGHT NOW. TOM: I LOOK AT WHERE WE ARE 20 DAYS OUT, AND OF COURSE THE ENERGIZING PLATFORM -- ONE OF THE DISTINCTIONS YESTERDAY IN THE ZEITGEIST WAS A PRESIDENT THAT HAS TO GET BACK ON MESSAGE, AWAY FROM THE ENTERTAINMENT OF IT, THE THEATER OF IT, AND, YES, RECOVERING FROM HIS ILLNESS AND GET BACK TO POLICY. WHAT IS THE POLICY MESSAGE OF THE PRESIDENT OF THE UNITED STATES? LESLIE: I THINK THIS ONE IS REALLY CHALLENGING BECAUSE THERE HAS BEEN SO MUCH DISTRACTION. WE KNOW THE NUMBER ONE ISSUE IN THIS ELECTION IS THE PANDEMIC. THE HEALTH CRISIS, THE ECONOMIC RECESSION. I THINK THAT THIS PRESIDENT, HE IS REALLY TRYING TO SAY TO AMERICANS THAT HE IS THE PRESIDENT. HE CAN DELIVER THE ECONOMY, THAT HE CAN BRING THE ECONOMY BACK. HE IS TRYING TO SUGGEST THAT VICE PRESIDENT BIDEN AND KAMALA HARRIS ARE TOO FAR TO THE LEFT TO DO THIS AND THAT THEY WILL TAX AMERICANS AND DRIVE THE ECONOMY INTO THE GROUND. I REALLY THINK HE IS TRYING TO CAMPAIGN ON THE BASIS OF BEING THE PRESIDENT THAT REALLY RESTORES THE HEALTH OF THE U.S. ECONOMY. FRANCINE: LESLIE, DO YOU BELIEVE IN THE TRUMP VOTER THAT MAY NOT BE SHOWING UP IN THE POLLS? LESLIE: THAT IS A VERY INTERESTING QUESTION. THAT IS UNKNOWABLE, ONE OF THOSE KNOWN UNKNOWNS. I AM SURE THERE ARE SOME PEOPLE WHO ARE RETICENT, WHETHER IT WAS PRESIDENT TRUMP OR ANY OTHER CANDIDATE, TO OPENLY STATE THEIR POLITICAL VIEWS. AMERICA COME AS WE KNOW, IS AS POLARIZED AS IT HAS EVER BEEN. I THINK A FEW YEARS AGO THE SURVEY CAME OUT THAT PEOPLE WERE MORE WORRIED ABOUT THEIR SON OR DAUGHTER MARRYING SOMEBODY FROM THE OTHER POLITICAL PARTY. IT USED TO BE SOMEBODY FROM ANOTHER RELIGION. NOW IT IS, GOD FOR BID IF -- I WOULDN'T BE SURPRISED IF PEOPLE DID NOT ALWAYS WANT TO SAY -- THE QUESTION IS, HOW SIGNIFICANT IS THAT, AND I SUSPECT IT IS SMALLER THAN WE THINK. TOM: SHE IS A WHAT? FRANCINE: THANK YOU SO MUCH, LESLIE VINJAMURI THERE. COMING UP ON BLOOMBERG MARKET, THE IMS AND MANAGING DIRECTOR, LEIGH-ANN: THIS IS "BLOOMBERG SURVEILLANCE." I AM LEIGH-ANN GERRANS WITH THE BLOOMBERG BUSINESS FLASH. LIVER HAS LEARNED THAT -- THE COMPANY HAS A MARKET VALUE OF ABOUT $8.7 BILLION. KENDO TO LOOKING FOR A BIG BET ON SHALE IN THE MIDST OF A HISTORIC DOWNTURN IN THE OIL INDUSTRY. YOU WILL NOT BE SEEING MASSIVE CROWDS ON BLACK AT WALMART. NUMBER OF CUSTOMERS WILL BE LIMITED INSIDE IT STORES TO JUST 20% OF USUAL CAPACITY. OTHER CHANGES INCLUDE SENDER SIZED -- SANITIZED CARTS. BUSINESS CHIEFS ARE CALLING ON THE GOVERNMENT TO RESCUE THE -- A BILLION DOLLAR BAILOUT AFTER THE CORONAVIRUS PANDEMIC LED TO A COLLAPSE AT TRAVEL. THAT IS YOUR BLOOMBERG BUSINESS FLASH. FRANCINE? FRANCINE: THANK YOU SO MUCH, FRANCINE. A LOT OF THE FOCUS IS ON BREXIT NEGOTIATIONS BECAUSE WE HAD THAT SELF-IMPOSED DEADLINE, ON OCTOBER 15, TOMORROW. IT SEEMS FROM BORIS JOHNSON STEP ASIDE, THEY MAY DECIDE TO EXTEND OR AT LEAST NOT LEAVE STRAIGHTAWAY. NO MAKING HARD DECISIONS, IS HOW THEY ARE PUTTING IT. IT WOULD BE GREAT TO SHOW IT TO SEE HOW TOWNS MOVED ON THE BACK OF IT, AND YOU CAN SEE THERE IS QUITE A LOT GOING ON WITH LEISURE STOCKS DOWN BUT FINANCIAL STOCKS IN EUROPE UP. TOM: LOOKING INTO THE EQUITY MARKET, 28,691, DOW FUTURES -- WE ARE WATCHING THE NASDAQ TO THE MOON. AMAZON IN THE MIDDLE OF THEIR PRIME DAY, JOE FELDMAN JUST OUT SEEING DAY ONE OF PRIME WAS EXTRAORDINARY COME UP .3% ON THE NASDAQ 100. > > ADVANCED ECONOMIES ARE DOING BETTER THAN EMERGING AND DEVELOPING ECONOMIES, INCLUDING CHINA. WITHIN COUNTRIES, ARE SEEING WOMEN DOING WORSE IN LABOR MARKETS. WE ARE SEEING RISING INEQUALITY. THIS IS WHAT WE DESCRIBED AS LONG AND EVEN HIGHLY UNCERTAIN PERCENT. TOM: SOMETHING I READ, THE EXECUTIVE SUMMARY EVERY WORD. I TRY TO DIVE INTO ONE OR TWO OF THE APPENDICES, AS THEY SAY, AS WELL. TERRIFIC WORK BY THE IMF. THEY'RE LIKE OPINION OUT OF. THEY GET BEAT UP CONSTANTLY. THE BLUE BOOK, GRADEBOOK, REDBOOK. REQUIRED READING. FRANCINE LACQUA IN A CONVERSATION WITH HER TODAY. RIGHT NOW ISABELLE MATEOS Y LAGO WITH US WITH BLACKROCK. ARE YOU KIDDING ME? GLOBAL HEAD OF OFFICIAL INSTITUTIONS GROUP. THAT MEANS SHE IS A BIG DEAL. THAT IS ALL YOU NEED TO KNOW. ISABELLE, ONE OF THE GREAT JUXTAPOSITIONS IS TECHNOLOGICAL INNOVATIONS. WE ARE IN THE MIDDLE OF PRIME DAY. MASSIVE GLOBAL INEQUALITIES IN A MULTI-2021 -- MOLDY 2021. WHEN WE BREAK THE ELITE OUTPERFORMANCE OF TECHNOLOGY FROM THE OBSERVATION OF A WORLD THAT IS REALLY STRUGGLING? ISABELLE: ACTUALLY -- WELL, GOOD MORNING, TOM. IT IS THE JOB OF THE IMF TO FOCUS ON WHAT IS NOT WORKING, WHERE THERE ARE THE INTO -- TOUGH QUESTION THAT A LOT ARE WORKING WITH. HIGH-YIELD BONDS, YOU FIND IT IN EMERGING MARKETS, AND YOU FIND IT IN CHINA. BUT FOR A LOT OF DONORS, THESE ARE INVESTMENTS THEY WOULD NEVER HAVE CONTEMPLATED HISTORICALLY BECAUSE OF THEIR RISK PARAMETERS. AND LIKEWISE FOR A NUMBER OF THEM NOW, CONTEMPLATE AN INVESTMENT IN LIQUID ASSETS. THEY WOULD HAVE THOUGHT THEY WERE COMPLETELY OFF-LIMITS IN THE PAST AND NOW THEY HAVE TO BE ON THE TABLE. FOCUSING ON DIVIDEND YIELDERS. PORTFOLIO CONSTRUCTION IS BEING COMPLETELY TAKEN BACK TO THE DRAWING BOARD BECAUSE PEOPLE UNDERSTAND WE ARE GOING TO HAVE THESE LOW INTEREST RATES FOR A LONG TIME INTO THE FUTURE. FRANCINE: WHAT IS THE BIGGEST WORRY THAT THERE IS TOO MUCH RISK AND EVEN PARTS OF THE MARKET WHICH IS NOT AS REGULATED AS OTHERS AND THAT COULD BE DANGEROUS FOR SOME KIND OF MELTDOWN OR THAT SOME OF THE RISKS THAT COULD MATERIALIZE SOME OF THE DOWNSIDE RISKS THAT WE'VE BEEN TALKING ABOUT IN THE WORLD ECONOMY MATERIALIZE? ISABELLE: THAT IS CLEARLY THE RISK, RIGHT? RIGHT NOW THE BEST CASE IS WE ARE NOW DEEP INTO THE SECOND WAVE OF THE PANDEMIC OR ENTERING INTO IT BUT WE ARE BEGINNING TO SEE LIGHT AT THE END OF THE TITLE. PROGRESS ON THE VACCINE AND TREATMENTS AND ECONOMIC REOPENING, YES, WE'RE GOING TO SEE MORE RESTRICTIONS BUT HOPEFULLY WE WILL BE ABLE TO AVOID GOING BACK TO FULL LOCKDOWN. SO IT WON'T BE A STRAIGHT LINE. THE RISK IS OBVIOUSLY THERE IS A MAJOR SETBACK IN IT THE SEARCH FOR A VACCINE OR A CURE OR THAT POLICY STIMULUS, WHICH REMAINS SO ESSENTIAL -- AND THE IMF IS VERY CLEAR ABOUT THAT -- IF THERE IS POLICY FATIGUE IN THE PUBLIC SUPPORT PHASE, THEN WE ARE IN A MUCH MORE DIRE SCENARIO. AND THAT IS WHAT THE MARKETS ARE PRICING. THEY ARE PRICING, YES, WE ARE SEEING LIGHT AT THE END OF THE TUNNEL. THAT IS WHAT -- WHERE I WOULD TEND TO SEE THE BIGGEST RISK. TOM: OUTSIDE YOUR PURVIEW, BUT $720 PLUS OF ASSETS YESTERDAY NASA BLACKROCK, WHICH IS AN INDUSTRY AND A GLOBAL FINANCIAL SYSTEM UP TO HIS EYEBALLS LOOKING FOR A WARM SPOT, IS THAT ULTIMATELY WHAT DRIVES ASSETS, WHAT DRIVES INTANGIBLE INVESTMENT IS THE MONEY HAS TO FIND A WARM PLACE? ISABELLE: YOU'RE PUTTING IN A SLIGHTLY DISMISSIVE WAY. THAT IS THE WAY FINANCE WORKS. AND IT IS FOR THE BETTER, FRANKLY, THE FACT THAT ASSET OWNERS ARE TRYING TO GET YIELDS, TO GET RETURNS IN LINE WITH THEIR MANDATE. AND THANKS TO THAT, YOU'RE SEEING CAPITAL FLOW BACK SOMEWHAT TO EMERGING MARKETS WHO DIRELY NEEDED. YOU ARE SEEING MONEY FLOW BACK INTO CORPORATE BOND MARKETS AND CARPETS NEED THE MONEY TO INVEST INTO THE FUTURE. YES, MONEY NEEDS TO FLOW TO WHERE THE OPPORTUNITIES ARE. BUT I WOULD NOT SEE ANYTHING VARIOUS ABOUT THAT. TOM: THANK YOU. LET ME SQUEEZE IN ONE MORE -- I GUESS YOU'RE GOING TO STAY WITH US. I'M SORRY. I'M TRYING TO FIGURE OUT WHAT THE HOUR IS DOING. WE WILL COME BACK WITH ISABELLE MATEOS Y LAGO A BLACKROCK. I WANT TO FOCUS ON THE UNITED KINGDOM AND SOME OF THE CHALLENGES FRANCINE IS NOTING TODAY ON TRADE AND DIALOGUE ACROSS THE CHANNEL AND ACROSS THE NORTH SEA. RIGHT NOW WITHOUT FIRST WORD NEWS IN LONDON, LEIGH-ANN GERRANS. > > PRESIDENT TRUMP IS BATTLING DEMOCRATS AND REPUBLICANS OVER THE PROPOSED STIMULUS PACKAGE. HE IS TELLING SENT REPUBLICANS TO "GO BIG OR GO HOME" WHEN IT COMES TO HER PROPOSAL THAT MAJORITY LEADER MITCH MCCONNELL IS ONLY PROMISING A VOTE ON A PAYCHECK REPLACEMENT PLAN FOR SMALL BUSINESS. MEANWHILE, HOUSE SPEAKER NANCY PELOSI SAYS THE WHITE HOUSE PLAN COMES UP SHORT. SHE IS DEMANDING SIGNIFICANT CHANGES. SUPREME COURT NOMINEE AMY CONEY BARRETT AVOIDED ANY MAJOR SLIP IN A DAY OF QUESTIONING ON CAPITOL HILL. COULDN'T DEMOCRATS CASTER ABOUT ABORTION RIGHTS, HEALTH-CARE, GUNS, ELECTION DISPUTES. THEY MADE LITTLE PROGRESS. -- THEY ASKED HER ABOUT ABORTION RIGHTS, HEALTH CARE, GUNS, ELECTION DISPUTES. THEY MADE LITTLE PROGRESS. PRIME MINISTER BORIS JOHNSON HAS THAT TOMORROW AS A DEADLINE FOR AN AGREEMENT. NEGOTIATIONS ARE EXPECTED TO KEEP TALKING PAST THEM. JOHNSON AND EUROPEAN COMMISSION PRESIDENT DISCUSSED THE IMPASSE TODAY ON A VIDEO CALL. RUSSIAN PRESIDENT VLADIMIR PUTIN AND SAUDI CROWN PRINCE MOHAMMED BIN SALMAN ARE URGENT OPEC AND ITS ALLIES TO STICK TO AGREED PRODUCTION CUTS. THAT PUTS PRESSURE ON MEMBERS WHO HAVE NOT SEEN LIVING UP TO THE PROMISES. OIL PRICES ARE BARELY ABOUT $40 A BARREL. NEW CORONAVIRUS OUTBREAKS ARE HURTING DEMAND. GLOBAL NEWS, 24 HOURS A DAY, ON AIR AND AT QUICKTAKE BY BLOOMBERG, POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN MORE THAN 120 COUNTRIES. I AM LEIGH-ANN GERRANS. THIS IS BLOOMBERG. TOM: THANK YOU. FUTURES UP NICELY. IT IS BANKING SEASON. WE WILL DO THE ROUND AGAIN AT 6:45. THANK NUMBER 42 COMES OUT WITH EARNINGS AND WE WILL LOOK AT THAT. THIS AFTERNOON, A CONVERSATION WITH A CHIEF FINANCIAL OFFICER OF A CHALLENGED WELLS FARGO. JOHN SHREWSBERRY AS WE DO DEFINITIVE WORK HERE ON THE BANKS, THE PROSPECTS FORWARD, > > THERE IS NO LONGER TIME TO GET THIS PRIME MINISTER THE BENEFIT OF THE DOUBT. THE GOVERNMENT'S PLAN SIMPLY IS NOT WORKING. ANOTHER COURSE IS NEEDED. THAT IS WHY I'M CALLING FOR TO BE TO THREE WEEK CIRCUIT BREAK IN ENGLAND IN LINE WITH THE RECOMMENDATION. FRANCINE: THAT WAS U.K. LABOR LEADER CALLING FOR SECOND NATIONAL LOCKDOWN IN THE COULD TO COME BACK RISING CORONAVIRUS CASES. WE ARE BACK WITH ISABELLE MATEOS Y LAGO A BLACKROCK. WE HAVE BREXIT, SELF-IMPOSED DEADLINE TOMORROW WITH NO SOFTENING OF THE STANCE FROM THE U.K. SIDE, WE HAVE THE LOCKDOWN WHICH IS UNCLEAR WHETHER THERE WILL BE A LOCKDOWN FOR VERY BRIEF PERIOD LIKE MANY ARE: TO BREAK THE SHORT-CIRCUIT. WHAT IS YOUR TAKE ON U.K. ASSETS RIGHT NOW? ISABELLE: A DIFFICULT PLACE FOR EXACTLY THE REASONS YOU MENTIONED, PLUS THE IMPACT OF THE PANDEMIC, EVEN WITHOUT GOING INTO FURTHER LOCKDOWN. BUT I THINK IT IS -- IT IS NOT LIKE THE MARKET IS WILDLY OPTIMISTIC ABOUT THE CHANCE OF AVOIDING FOR THE RESTRICTIONS OR MAGICALLY EXPECT A DEAL IS GOING TO COME OUT OF A RABBIT HAT AT THE END OF THIS WEEK. SO U.K. ASSETS, A LOT OF UNCERTAINTY, NO MASSIVE OVER OR UNDER PRICING I WOULD SAY AT THIS JUNCTURE. FRANCINE: DO YOU LOOK AT NEGATIVE RATES AS SOMETHING THAT COULD HAPPEN IN THE U.K., LOOKING AT EXAMPLES AROUND THE WORLD? OR IS IT SOMETHING THAT COULD PUSH INVESTORS TO THE BRINK? ISABELLE: NO, I THINK THE BANK OF ENGLAND HAS ONLY DONE A GOOD JOB OF PROCURING THE -- PREPARING THE INVESTORS MINDS FOR THIS. INITIALLY, I THINK IT REALLY DID COME AS A BIG SURPRISE THAT THE MEASURE WAS EVEN BEING CONTEMPLATIVE BECAUSE IT WAS SUCH A DEPARTURE FROM PAST PRONOUNCEMENTS. BUT, YES, THAT IS SOMETHING I THINK INVESTORS DEFINITELY THINK COULD -- PROBABLY NOT THIS YEAR, BUT IF THE ECONOMIC CONDITIONS WORSEN, I THINK INVESTORS ARE PREPARED FOR IT. THEY ARE NOT HAPPY ABOUT IT, BUT THIS IS DEFINITELY SOMETHING THAT IS PART OF THE TALK. TOM: WHERE IS THE THREE-YEAR OPPORTUNITY HERE? ON A STRATEGIC BASIS LOOKING OUT THREE YEARS WITH THE BACK AND FORTH AND BACK AND FORTH OF THE CONTINENT IN THE UNITED KINGDOM, WHERE IS THE INVESTABLE OPPORTUNITY? ISABELLE: ACTUALLY, WE ARE FEELING QUITE GOOD ABOUT EUROPE RIGHT NOW, WHICH IS STRUGGLING WITH THE SECOND WAVE AT THIS VERY SECOND. BUT IF YOU LOOK FURTHER OUT, EVEN WITHOUT GOING AS FAR AS THREE YEARS, YOU HAVE FOR THE FIRST TIME IN I DON'T KNOW HOW MANY LOANS, FISCAL AND MONETARY POLICY WORKING IN TANDEM, WORKING TO SUPPORT EACH OTHER. AFTER WISHING IT TO HAPPEN FOR SO LONG, IT IS FINALLY HAPPENING IN EUROPE WHEREAS IT ISN'T TO THE SAME EXTENT IN THE UNITED STATES. AND EUROPE HAS PUT IN PLACE IN THE FORM OF THE RECOVERY FUND REALLY THE TOOLS OF BUILDING BETTER AFTER THIS CRISIS. HAVING A STRONGER ECONOMY, HAVING MORE COHESION ACROSS THE DIFFERENT COUNTRIES. WE DON'T KNOW FOR SURE IT IS GOING TO HAPPEN, BUT FRANKLY, THE POLITICAL CALENDAR DOES NOT LOOK TOO BAD, EITHER, WHEN YOU LOOK AT THE SUPPORT FOR POPULIST PARTIES ACROSS DIFFERENT COUNTRIES, IT IS NOT INCREASED SIGNIFICANTLY OR IN SOME COUNTRIES -- DESPITE THE ARE CHIPS CAUSED BY THE PANDEMIC -- DESPITE THE HARDSHIPS CAUSED BY THE PANDEMIC. EUROPE SEEMS TO BE ON A PRETTY GOOD TRAJECTORY. GOING OUT FOR THE TRIP THREE YEARS, -- GOING OUT FURTHER TO THREE YEARS, IT IS ENCOURAGING TO SEE THERE IS SO MUCH EMPHASIS REALLY ON REBUILDING BETTER, ON ACCELERATING THE TARGET, ON FOCUSING MORE ON HUMAN CAPITAL. NOW, SOME COUNTRIES WILL JUST TALK ABOUT IT AND OTHERS WILL ACTUALLY IMPLEMENT IT. I THINK THAT IS WHAT WILL BE IMPORTANT TO LOOK AT. BUT ON THE HORIZON THREE YEARS, THERE'S EVERY REASON TO BE OPTIMISTIC. FRANCINE: THANK YOU SO MUCH, ISABELLE MATEOS Y LAGO. COMING UP A LITTLE BIT LATER TODAY, 11:00 A.M. IN NEW YORK, FOR COPY MONDAY LEIGH-ANN: APPLE OF IPHONES ARE WINNING PRAISE FOR ITS LOWER PRICES AND NEW SIZES. THE COMPANY SHOWED OFF FOUR VERSIONS OF THE IPHONE 12 AT A VIRTUAL EVENT. THE PRICE BEGINS AT $699. THE TOPPER VERSION HAS APPLE'S BIGGEST SCREEN YET, 6.7 INCHES. WALL STREET EXPECTS THE IPHONE 12 TO KICK OFF A NEW CYCLE OF SALES GROWTH FOR APPLE. RAYTHEON HAS STARTED JOB CUTS FOR SALARIED WORKERS AT ITS WOODY JET ENGINE UNIT. THERE PREPARING FOR A LONG SLUMP IN SALES AND REPAIR WORK. THE CUTS ARE PART OF RAYTHEON'S PLAN TO GET RID OF 15,000 JOBS IN ITS COMMERCIAL AEROSPACE BUSINESS, INCLUDING PRATT AND SUPPLIER COLLINS AEROSPACE. BLOOMBERG HAS LEARNED THAT CHINA PLANS TO INCREASE ITS STAKE IN UNIVERSAL MUSIC BY ANOTHER 10%. LAST YEAR IT LET A CONSORTIUM THAT BOUGHT A 10% OF THE WORLD'S LARGEST MUSIC COMPANY FROM FRANCE. THE DEAL INCLUDED AN OPTION TO DOUBLE THE SIZE OF THE STAKE BY NEXT JANUARY. THAT IS YOUR BLOOMBERG BUSINESS FLASH. FRANCINE: THANK YOU. CLIMATE CHANGE, GLOBAL ECONOMIC RECOVERY. THAT IS THE MESSAGE FROM LEADING FIGURES IN THE FINANCIAL WORLD. YESTERDAY WE SPOKE TO THE IMF ENERGY DIRECTOR, BLACKROCK CHAIR, AND CHIEF EXECUTIVE, AND MARK CARNEY. THEY WERE QUITE HOPEFUL A LOT WAS BEING DONE BECAUSE OF THIS TRANSITION TO BUILD A BETTER FUTURE. > > WEEK IN MOLD THE ECONOMY TOWARD LOW CARBON CLIMATE RESILIENCE BY INVESTING IN GREEN AND RESILIENT INFRASTRUCTURE. WE CAN ADVANCE DIGITALIZATION, WHICH IS APPLE -- IS ACTUALLY HAPPENING. WE KNOW A DIGITAL TRANSFORMATION ALLOWS US TO ACCELERATE GOING GREEN. SO THE QUESTION FOR US IS HOW TO FOCUS ON WHAT IS TOP OF MIND OF PEOPLE, JOBS? TOP OF MINE. WELL, WE CAN CREATE GREEN JOBS. AN HOUR RECENT RESEARCH SHOWS IF WE DIRECT -- AND OUR RECENT RESEARCH SHOWS IF WE DIRECT THE STUDENTS TO BE ORIENTED TO GREEN INFRASTRUCTURE, IT WILL BE FANTASTIC FOR JOBS. WE CAN GET 33 MILLION JOBS ON THE BASIS OF MAKING THE STIMULUS GREEN. SECONDLY, PEOPLE ARE WORRIED ABOUT INEQUALITY. IF WE DO NOT DIGITALIZE EVERYWHERE, THAT WOULD HAPPEN. SO IF WE WANT TO GIVE OPPORTUNITIES TO PEOPLE, WE HAVE TO GO DIGITAL EVERYWHERE. AND I WOULD SAY FOR SURE PEOPLE WORRY ABOUT INEQUALITY GROWING. AND THAT IS SOMETHING THAT -- AGAIN, CONNECTING THE DOTS CAN HELP US PREVENT FROM HAPPENING. FRANCINE: MARK CARNEY, D.C. MUCH MORE INTEREST WHEN ADDRESSING CLIMATE CHANGE BECAUSE OF THE CRISIS OR AT A CERTAIN POINT HAS IT TAKEN A BIT OF A BACKSEAT? > > I WOULD ACTUALLY PICK UP WHERE THE IMF MANAGING DIRECTOR BEGAN, WHICH IS THAT I THINK THERE WAS A QUESTION AND INITIALLY WHEN THE CRISIS HIT, BUT VERY QUICKLY IT WAS RECOGNIZED THAT THERE WERE PARALLELS BETWEEN WHAT HAPPENED WITH COVID, THE IMPORTANCE OF RESILIENCE AND PREPARATION AND THAT IS SORT OF ON THE DEFENSIVE OR RISK-MANAGEMENT SIDE, BUT MORE POSITIVELY, THE NEED TO BUILD FORWARD BETTER, AS THE IMF HAS BEEN SAYING, AND THE IMPORTANCE AND REALLY THE OPPORTUNITY THAT COMES FROM MOVING TOWARD A MORE SUSTAINABLE ECONOMY BECAUSE IT IS MORE CAPITAL-INTENSIVE, JOB-HAVE A. A NUMBER OF THE PROGRAMS THAT NEED TO BE PUT IN PLACE. -- JOB-HEAVY, A NUMBER OF THE PROGRAMS THAT NEED TO BE PUT IN PLACE. MANAGE SUPPORT FOR INDIVIDUALS AND COMPANIES IN THE HEIGHT OF THE EMERGENCY AND TRANSITION TO THE SUSTAINABLE GROWTH GOING FORWARD. I WANT TO SAY THE INTEREST IS ABSOLUTELY THERE. IT IS A POLICY IMPERATIVE AND I'M SURE LARRY AND OTHERS -- PARTICULARLY LARRY, CAN SPEAK TO, THE FINANCIAL SECTOR HAS GONE MAINSTREAM. FRANCINE: MINISTER, IF YOU LOOK AT ANGOLA, ONE OF THE COUNTRIES THAT HAS BEEN HIT THE MOST BECAUSE YOU'RE DEALING WITH WHAT EVERYONE ELSE IS DOING WHAT, THE PANDEMIC, LOCKDOWNS, PLUS THE OIL PRICE REALLY COLLAPSING. HOW DO YOU LOOK YOUR PRIORITIES FOR THE NEXT 12 MONTH? > > FIRST OF ALL, WE NEED TO MAKE SURE WE SURVIVE AND THAT WE PRESERVE ALMOST LIFE AS POSSIBLE AND WILL MAKE SURE OUR HEALTH SYSTEMS DO NOT COLLAPSE. IT IS ALSO A PRIORITY TO MAKE SURE OUR DEBT REMAINS SUSTAINABLE. FRANCINE: LARRY FINK AT SOME POINT WAS QUITE FUNNY BECAUSE I KEPT ASKING HIM, ARE WE TOO OPTIMISTIC? HE SAYS, THERE IS A DANGER WE ARE HAVING A POLLYANNA MOMENT. I THINK THE ONE THING'S TIMELINE. IF YOU TRANSITION THE ECONOMIES, THAT'S FINE, BUT DO IT QUICKLY OR YOU'RE JUST OVERCOME BY EVENTS. I DON'T KNOW IF THERE'S A WINDOW OF 12 TO 18 MONTHS WHERE THEY REALLY NEED TO DO THE HARD WORK, POLICYMAKERS STOP COMING UP, WE WILL SPEAK TO THE IMF MANAGING DIRECTOR AGAIN. TOM: MOVING FORWARD ON THE POLLYANNA MOMENTS, DAVID PEARL OF EPIC INVESTMENT PARTNERS. IMPORTANT UPDATE. STAY WITH US. TOM: NASDAQ 100, LESS THAN 2% FROM A RECORD HIGH. APPLE, $2.1 TRILLION COMPANY AND IN NEW YORK CITY, THEY ARE ALL LEAVING. WE TECH. -- BIG TEX. FRANCINE LACQUA WILL SPEAK TODAY TO THE MANAGING DIRECTOR. IN PENNSYLVANIA, THE PRESIDENT MUST GET BACK ON SCRIPT. MR. BIDEN IS A "SERVANT OF THE RADICAL GLOBALIST." BINDS THIS TRUMP IS THE ONLY SENIOR TRUMP CARES ABOUT. THINGS ARE HEATING UP AND. FRANCINE: PUNDITS AND WITH 31ST, NO-DEAL BREXIT -- IT WOULD MEAN ON DECEMBER 31ST, A NO-DEAL BREXIT. THE UNDERSTAND FROM OUR SOURCES, THEY WON'T WALK OUT IMMEDIATELY. WE KNOW IS PICKING UP -- THIS IS THE NEGOTIATIONS ON THE BACK CANDIDACY WHETHER WE CAN TRY AND FIND AN AGREEMENT BEFORE THE DEADLINE. TOM: YOU WILL SPEAK WITH THE MANAGING DIRECTOR OF INTERNATIONAL MONETARY FUND. I WAS SURPRISED YESTERDAY. WHAT IS YOUR MAJOR THING WITH DR. GOREY AVA? FRANCINE: TO SEE IF SOME OF THE DOWNSIDE RISKS WE HAVE SEEN BECAUSE A LOT OF CANS AND RESTRICTIONS ELECTION MATERIALIZE. EVEN IF HE SEES A SLIGHT PICKUP, AND THIS IS MAYBE A REBOUND WAS EARLIER THAN THOUGHT WHEN WE OPENED OUR ECONOMIES, IT IS WHAT BRINGS WINTER WITH A NUMBER OF INFECTION RISING. VACCINE TRIALS. TOM: FUTURES UP 10. NASDAQ UP TO TENS OF A PRESENT. THE FIRST WORD NEWS, QUEEN VICTORIA, LEIGH-ANN GERRANS. LEIGH-ANN: PROSPECTS FOR ANOTHER STIMULUS PACKAGE BEFORE ELECTION DAY LOOK BLEAK. PRESIDENT DONALD TRUMP AND SENATE REPUBLICANS ARE AT ODDS. THE PRESIDENT IS URGING THEM TO GO BIG OR GO HOME. ONLY COMMITTING TO VOTE ON PAYCHECK PROGRAM FOR SMALLER BUSINESSES. HOUSE SPEAKER NANCY PELOSI IS DEMANDING THE WHITE HOUSE REBOUND ITS LATEST OFFER. SHE SAYS IT IS NOT BIG ENOUGH. THE WORLD'S TOP CENTRAL BANKS ARE URGING GOVERNMENTS TO KEEP SPENDING. THEY SAY CONCERNS ABOUT MOUNTING THAT -- DEBT. THE IMF IS NORMALLY A CHAMPION OF BUDGET RESTRAINT BUT THE FUND AGREES IT IS TOO EARLY DIDN'T SUPPORT. BORIS JOHNSON ORDER SO-CALLED CIRCUIT BREAKER. SIGNED IS THAT IT IS NEEDED TO GET THE CORONAVIRUS UNDER CONTROL. CONCERNS ARE MOUNTING THAT JOHNSON'S NEW SYSTEM OF RESTRICTIONS ARE NOT ENOUGH. RUSSIA HAS RULED OUT A DEAL WITH THE U.S. ON YOUR WEAPONS BEFORE THE PRESIDENTIAL ELECTION. THE DEPUTY FOREIGN MINISTER DISMISSED A CALL BY WASHINGTON FOR A FREEZE ON THE ARSENAL AS AN ACCEPTABLE POST OF LIMITING THE NUCLEAR WEAPONS OF THE FORMER COLD WAR OPPONENTS EXPIRES IN FEBRUARY. GLOBAL NEWS, 24 HOURS A DAY, ON AIR AND AT QUICKTAKE BY BLOOMBERG, POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN MORE THAN 120 COUNTRIES. THIS IS BLOOMBERG. TOM: LOOKING AT FUTURES, GREEN LIGHT NOW. FUTURES AT NINE, DOW FUTURES UP 87. NASDAQ 100, BUT SORT OF LIKE THE NASDAQ THREE, MAYBE FOUR. I WOULD NOTE TURKISH LIRA TAKING A DASH OF MISSILE NEWS OUT OF TURKEY AND THE VARIOUS MILITARY AFFAIRS. 7.95 NOW ON EVER WEAKER TURKISH LIRA. FRANCINE: INVESTORS ARE LOOKING TO THE EARNINGS SEASON TO PROVIDE THIS SPARK FOR EQUITY MARKETS. THERE SEEM TO BE THESE DWINDLING PROSPECTS BEFORE NEXT MONTH'S ELECTION. WE SAW NANCY PELOSI DEMANDING THE TRUMP ADMINISTRATION REVAMP ITS LATEST OFFER. EUROPEAN STOCKS ARE BARELY MOVING. THEIR GAINS ARE 1%, BUT NOTHING TO WRITE HOME ABOUT. IF YOU LOOK AT SOME OF THE PEG REPORTS, LIVE WELL FARGO, BANK OF AMERICA I GIVE ANY INDICATION. AND POUND. IT IS QUITE INTERESTING BECAUSE IT IS PARING DECLINES AFTER THE U.K. SIGNALED IT WILL CONTINUE EFFORTS TO REACH AN AGREEMENT WITH THE EU, AND THAT WOULD BE BEYOND THE SELF-IMPOSED DEADLINE OF OCTOBER 15. OCTOBER 15, JAMAAL. THEY WILL NEGOTIATE BEYOND THAT. TOM: AS WELL ON THE CAMPAIGN TRAIL, THE PRESIDENT AND THE VICE PRESIDENT. 20 DAYS UNTIL THE ELECTION. LET'S LISTEN TO THE FESTIVITIES YESTERDAY. PRES. TRUMP: DO ME A FAVOR. SUBURBAN WOMEN, WILL YOU PLEASE LIKE ME? PLEASE. PLEASE. I SAVED YOUR DAMN NEIGHBORHOOD, K? I DON'T HAVE THAT MUCH TIME TO BE NICE. I HAVE TO GO QUICKLY. WE DON'T HAVE TIME. BE POLITICALLY CORRECT. YES, LET'S DISCUSS IT AND TALK ABOUT IT OVER THE NEXT 10 YEARS. NO, NO, NO. WE SAVED SUBURBIA IN THE U.S. MR. BIDEN: I AM WRITING AS A PROUD DEMOCRAT, BUT I WILL GOVERN AS AN AMERICAN PRESIDENT. I WILL WORK FOR DEMOCRATS AND REPUBLICANS. I WILL WORK FOR THOSE WHO VOTE AGAINST ME, THOSE WHO VOTED FOR ME. THAT IS THE JOB OF THE PRESIDENT, TO HEAL. IT IS THE DUTY TO CARE, TO CARE FOR EVERYONE. TOM: SOUNDS LIKE A CAMPAIGN. THANK YOU TO ALL OF OUR TEAM, PARTICULARLY SARAH FOR PUTTING TOGETHER THE EMOTIONS THAT WE SAW YESTERDAY WITH 21 DAYS TO GO STEP KEVIN CIRILLI, I PUT OUT A TWEET. I JUST SAID "WOW." MAYBE THE MOST SHOCKING RESEARCH I'VE SEEN, THE GOOD PEOPLE AT COOK WASSERMAN AND TAYLOR RINGING UP SEVEN DEMOCRATS PLUS IN THE SENATE. HOW DID THEY GET THERE TO SEVEN DEMOCRATIC SENATOR PICKUP IN THE U.S. SENATE? THAT STUNS ME. KEVIN: JESSICA TAYLOR KNOWS IT IN THE SINCE SHE REPORTS ON THE AFFORDABLE CARE ACT AND OBAMACARE. WHAT ONCE WAS A WINNING ISSUE FOR REPUBLICANS, FLASHFORWARD FOUR YEARS LATER WITH THE CONSTITUTIONALITY OF OBAMACARE COURT RULING HANGS WITH THE SUPREME COURT IN EARLY NOVEMBER, THIS HAS BEEN A MISSED OPPORTUNITY BASED ON THE CONVERSATION REPUBLICANS REPLACE HEALTH CARE WITH SOMETHING OF AN ALTERNATIVE. THAT IS ON FULL DISPLAY IN THE ACB AMY CONEY BARRETT HEARINGS. WE WERE TALKING ABOUT THIS BEFORE AIR, A COUPLE OF MONTHS AGO, THIS IS UNIMAGINABLE TO SEE DEMOCRATS ACTUALLY BE ABLE TO TAKE THE SENATE? THE SENATE? UNIMAGINABLE A COUPLE OF MONTHS AGO. THAT IS FASCINATING TO WATCH ALL OF THE OUTSIDE MONEY FLOOD IN TO THE DIRKSEN BUILDING PROJECT AMY CONEY BARRETT AND SAY, KNOW WHAT? MAYBE THIS IS OUR LAST HOPE IS TO GET ANOTHER -- TOM: I WANT TO MAKE CLEAR, THIS IS NOT A SEVEN SEAT MAJORITY. IT IS A PICKUP OF SEVEN SEATS. THE OTHER THING I WANT TO LOOK AT, "THE NEW YORK TIMES" WITH A SPECTACULAR EFFORT OF DEVOTING COME OF HOW THEY OPEN THE ENVELOPES. THE OPEN THEM NOW, THEY OPEN THEM X NUMBER OF DAYS BEFORE THE ELECTION. OPEN THE ENVELOPES ON ELECTION DAY? WHAT WILL HAPPEN IN PENNSYLVANIA AT 11:00 A.M. THE WEDNESDAY AFTER THE ELECTION? KEVIN: IT IS A MESS. NOT JUST PENNSYLVANIA, BUT OTHER STATES WHERE THE STATE LEGISLATORS ARE TRYING TO HAVE DIFFERENT RULES UP UNTIL THE LAST MINUTE. IT IS A COURT BATTLE. I KEEP BRINGING THAT BACK TO JUDGE AMY CONEY BARRETT BECAUSE IT IS A MICROCOSM OF EVERYTHING HAPPENING ON HEALTH CARE AND ON THE RULINGS WITH REGARD TO THE ELECTION. SHE WAS ASKED POINT-BLANK BY DEMOCRATS, WILL YOU RECUSE YOURSELF FROM AN ELECTION CASE SHOULD HE GET TO THE SUPREME COURT? SHE DID NOT TAKE THE OPPORTUNITY TO DO SO. REPUBLICANS WOULD SAY SHE SHOULD NOT DO THAT BECAUSE YOU HAVE TO HAVE A FULL BENCH. YOU RAISE A REALLY GOOD POINT, WHICH IS THE STATE LAWS, A PATCHWORK OF STATE LAWS AND THEY'RE ALL DIFFERENT AND IT IS ON A COLLISION COURSE WITH THE MAIL-IN BALLOTS. FRANCINE: CAN I GO BACK TO SOMETHING YOU SAID TO MAKE SURE I AM INTERNATIONAL VIEWERS UNDERSTAND? YOU SAY THIS BLUE WAVE WE ARE TALKING ABOUT WOULD HAVE BEEN SEEN AS UNIMAGINABLE EVEN FOR FIVE WEEKS AGO. WHAT HAS CHANGED? IS IT ALL COVID AND THE OUTBREAK IN THE WHITE HOUSE? KEVIN: YES. COVID-19. IT IS THE PRESIDENT TRYING TO WIN OVER NOT JUST SUBURBAN WOMEN, BUT ALSO SENIOR CITIZENS. LOOK, I'M NOT IN THE BUSINESS OF MAKING PREDICTIONS BUT I CAN TELL YOU THAT DEMOCRATS REALLY FEEL THEY HAVE AN OPPORTUNITY TO TAKE OVER ALL THREE BRANCHES OF GOVERNMENT, THAT IT IS WITHIN STRIKING DISTANCE. SHOULD REPUBLICANS BE ABLE TO HOLD ONTO THE SENATE, IT IS GOING TO BE APPLIED FIGHT TO DO SO. I THINK IT WILL DEFINITELY COME DOWN TO A TURNOUT ELECTION, BUT THE POLICY IMPLICATIONS OF THERE BEING A BLUE WAVE WOULD BE SIGNIFICANT. IT WOULD HAVE LONG-LASTING IMPLICATIONS IN NEXT CALENDAR YEAR ABOUT WHAT A 2021 RECOVERY WOULD LOOK LIKE. QUITE HONESTLY, IT WOULD BE A LOT DIFFERENT THAN A 2008 RECOVERY SIMPLY BECAUSE OF THE PRECEDENTS THEY FEEL THEY WOULD HAVE. AND THE COMMANDING RULING FROM VOTERS. FRANCINE: IS THERE ANYWAY THE REPUBLICANS CAN TURN THIS AROUND? IF THE NARRATIVE CHANGES -- WHICH IS DIFFICULT LIVING THROUGH COVID -- BUT IF IT FOCUSES ON TAXES, WILL IT TURN? PEOPLE OFFPUTTING FOR THE DEMOCRATS? KEVIN: EXACTLY. THAT IS WHY I'M SO CAUTIOUS ON THE ECONOMIC RECOVERY, IT IS A BLANKET ISSUE. LIKE I SAID, ECONOMIC RECOVERY -- FRACKING JOBS ARE SO INCREDIBLY IMPORTANT IN THE STATE OF PENNSYLVANIA. IF YOU ARE AGAINST FRACKING, OR AGAINST JOBS. I THINK THAT IS AN IMPORTANT POINT FOR PENNSYLVANIA. YOU CAN BE FOR THE ENVIRONMENT AND FOR FRACKING BUT THAT IS A NUANCED MESSAGE IN A STATE LIKE PENNSYLVANIA. YOU DON'T HAVE AN -- DON'T HAVE TO HAVE AN IVY LEAGUE DEGREE TO KNOW THAT. THE STRUGGLE SENIOR CITIZENS. HE WILL DRAW CONTRAST IN TERMS OF WHAT A RECOVERY WOULD LOOK LIKE, ESPECIALLY AS IT RELATES TO SOME OF THE ENVIRONMENTAL ISSUES IN FLORIDA. IN HISPANICS WITH REGARD TO CATHOLIC HUMAN -- CUBAN-AMERICANS. FRANCINE: KEVIN CIRILLI, THANK YOU. COMING UP I BLOOMBERG MARKETS, IMF DIRECTOR ABOUT WHAT WE'RE SEEING IN TERMS OF LOCKDOWN, THE ECONOMY, BUT MAYBE ALSO THE U.S. ELECTION. THAT INTERVIEW AT 10:30 A.M. TOM: GOOD MORNING, "BLOOMBERG SURVEILLANCE." BUSY DAY. DURING THE POLITICS WITH KEVIN CIRILLI. RIGHT NOW WE WILL GET BACK TO WHAT WE DID MONDAY AND TUESDAY, THE EQUITY MARKETS. DAVID PEARL JOINS US, EPOCH INVESTMENT PARTNERS. I WANT TO REDEFINE RIGHT NOW THE GROWTH OF THIS MARKET. WE'RE LOOKING AT THE NASDAQ 100 RIGHT NOW TICKING ON THE SCREEN. UP, UP TO MY DAY AFTER DAY. I GET THE ROTATION DEBATE AND THE SMALL-CAP INTERNATIONAL DEBATE AS WELL. REDEFINE RIGHT NOW WHAT GROWTH MEANS. DAVID: WELL, WHAT INVESTORS HAVE DECIDED IS THAT WE ARE IN A VERY SLOW RECOVERY. WHAT YOU WANT TO OWN IN THE LOW INTEREST RATE, ALMOST ZERO INTEREST RATE ENVIRONMENT ARE GROWTH STOCKS. THE QUESTION IS, WHAT IS A GROWTH STOCK? IN OUR VIEW, COMPANY THAT HAS TO GROW PROFITABLY AS OPPOSED TO JUST GROWING REVENUES. THERE HAS BEEN NO DISTINCTION ABOUT THIS RECENTLY. WHILE WE KNOW ALL ABOUT THE FAANG STOCKS AND A COUPLE OF THEM EARLY. MAKE THAT MUCH MONEY IF AT ALL, IT IS THE BIOTECHS AND THINGS LIKE TESLA THAT ARE EVEN MORE CONCERNING IN THE MARKET. BUT IT IS EASY FOR A RETAIL INVESTOR WHO DOESN'T UNDERSTAND FUNDAMENTALS, PROFITABILITY, OR FINANCE IN GENERAL TO BUY SOMETHING THAT AT LEAST THEY KNOW THE PRODUCT IS AND THEY KNOW IT IS GROWING REVENUE. SO UNFORTUNATELY, FOR US INVESTORS, THIS IS LIKE A DRUNKEN PARTY. IT REMINDS ME VERY MUCH OF THE DOT COM BUBBLE. BEING SOBER AT A DRUNKEN PARTY IS NO FUN. TOM: 6:45, WE START IN THE BANK BALLET AGAIN. SEEMS TO BE WORSE ABOUT LOSSES, CHARGE CARDS, SATURN EXECUTABLE EXCELLENCE AS WELL. WHICH WAY DO YOU TILT? DAVID: WHEN YOU SAW JP MORGAN, IT COULD NOT BE A HECK OF A LOT BETTER GIVEN THE ENVIRONMENT. THEY ACTUALLY HAD TO REDUCE PROVISIONS BECAUSE A LOT ARE GETTING PREPAID, SO CREDIT QUALITY HAS BEEN HOLDING UP, PARTICULARLY FOR MOST OF THE LARGER BANKS. THE ONLY OTHER NEGATIVE HAS BEEN THE FLATTENING OF THE YIELD CURVE, SO NET INTEREST MARGIN HAS FLATTENED BUT IT CAN'T FLATTEN A LOT MORE. THESE COMPANIES ARE PRODUCING HUGE PROFITS, PAYING BIG DIVIDENDS, AND THEY WILL BE BUYING BACK MORE STOCK. JP MORGAN SAID AS MUCH. WE THINK BANK OF AMERICA WILL BE THE SAME. WELLS FARGO MIGHT BE THE SINGULAR EXCEPTION BECAUSE THEY ARE STILL TURNING IT AROUND A BIT. BUT CITI WAS GOOD AS WELL. THE MANY CENTERS WILL GENERALLY DO WELL. THE PROBLEM IS, THE MARKET IS ALWAYS WORRIED ABOUT WHAT YOU SAID, THAT IT WILL DETERIORATE OR PROFITABILITY WILL DETERIORATE AS OPPOSED TO THE FAANG STOCKS. WHEN WE TALK ABOUT APPLE, THERE WAS NOTHING THAT GREAT GOING ON. BUT I HAD BEEN READING THE SPIN ON THIS. IT IS HILARIOUS TO ME. THE MAJOR FILM THAT REPLACES THE IPHONE 11 FROM LAST YEAR IS $100 MORE BUT ANALYSTS HAVE POINTED TO THE SMALLER PHONE THAT THEY PUT IN THE LINEUP THAT IS THE SAME PRICE. AND IS SAYING THAT WAS A GREAT IDEA. WELL, IT IS GREAT FOR APPLE BUT THEY HAVE EFFECTIVELY RAISED PRICE. FRANCINE: DAVID, THE OVERALL, ARE YOU WORRIED ABOUT VALUATIONS IN THE TECH SECTOR BECAUSE THERE IS A RISK OF THEM BEING BROKEN UP OR BEING TAXED MORE? DAVID: THERE IS, BUT THAT PROBABLY ISN'T MY BIGGER ISSUE. IT IS THAT YOU ARE GIVING THEM TOO MUCH OF A BENEFIT FOR DISCOUNTED -- DISCOUNTED CASH FLOW OUT IN A LONG PERIOD OF TIME AT ZERO INTEREST RATES. SO IF WE GET A RECOVERY, IT RATES START TO GO UP AT ALL -- I WOULD SAY EVEN WITH THE DEMOCRATICALLY WAVE COMING YOU AT STIMULUS -- DEMOCRAT BLUE WAVE, U.S. STIMULUS, IT WILL AFFECT GROWTH STOCKS NEGATIVELY. AND CONVERSELY, THE STOCKS THAT HAVE LAGGED, WHICH ARE ECONOMICALLY SENSITIVE LIKE FINANCIALS OR THE REST OF TECHNOLOGY LIKE SEMICONDUCTORS OR CONSUMER DISCRETIONARY, BASICALLY, VALUATIONS WILL GO BACK UP BECAUSE FINANCIALS ARE AT THE LOWEST. FRANCINE: BUT AS LONG AS THEY SELL TO CHINA AND AS LONG AS THEY SELL MORE TO CHINA, MORE PHONES TO CHINA, DOESN'T THAT MAKE UP FOR IT? DAVID: THE QUESTION IS, HOW MUCH WILL THAT CHINESE BY OF AMERICAN PRODUCTS? APPLE HAS VERY HIGH MARKET SHARE OF THE TOP END OF THE MARKET. EVEN THE LOWEST APPLE PHONE IS $600. THE MEDIAN PRICE OF A PHONE IS ABOUT $200 IN ASIA. SO THE MASS MARKET IS NOT SOMETHING APPLE TOUCHES. IT IS A MATTER OF HOW WELL THE CHINESE ECONOMY IS DOING, HOW AFFLUENT THEY ARE POSTED AND REALLY ALMOST THE SAME FOR TESLA. I KIND OF WONDER HOW MANY $50,000 CARS YOU'RE GOING TO BE ABLE TO SELL IN THE NEXT FEW YEARS. TOM: DAVID PEARL, THANK YOU SO MUCH, EPOCH INVESTMENT PARTNERS ALSO FUTURES UP 1. WE PULLED BACK A LITTLE. THE NASDAQ COMING BACK AS WELL, UP A SINGLE FOUR POINTS. I WANT TO MAKE THE 30 YEAR BOND. 1.49%. ANOTHER TWO BASIS POINTS TODAY AS WELL. COMING UP ON BLOOMBERG MARKETS, CHIEF FINANCIAL OFFICER OF WELLS FARGO. THERE IS A LITTLE BIT TO TALK ABOUT WITH MR. SHREWSBERRY AT 4:00 P.M. STAY WITH US. THIS IS "BLOOMBERG." THIS IS "BLOOMBERG." ♪ LEIGH-ANN: THIS IS "BLOOMBERG SURVEILLANCE." YOU WANT TO BE SEEING MASSIVE CROWDS AT WALMART ON BLACK FRIDAY. THE WORLD'S BIGGEST RETAILER WILL LIMIT THE NUMBER OF CUSTOMERS INSIDE THE STORES TO JUST 20% OF THE USUAL CAPACITY. OTHER CHANGES INCLUDE SANITIZED CARDS AND DIRECTIONS DOUBT SHOPPERS AVOID EACH OTHER WHILE BROWSING. APPLE'S NEW IPHONES ARE WINNING PRAISES FOR LOWER PRICES AND NEW SIZES. THE COMPANY SHOWED OFF FOUR VERSIONS OF THE IPHONE 12 AT A VIRTUAL EVENT. THE PRICES BEGAN AS $699 AND THE TOP-OF-THE-LINE DEVICE HAS APPLE'S BIGGEST SCREEN YET, 6.7 INCHES. THERE APPLE'S FIRST 5G PHONES. > > EACH GENERATION OF TECHNOLOGY ON IPHONE HAS ENABLED BREAKTHROUGH INNOVATIONS AN ENTIRELY NEW OPPORTUNITIES FOR DEVELOPERS AND OUR USERS. AND 5G IS THE MOST EXCITING STEP YET. FOR SO MANY PEOPLE, THIS ALL BECOMES REAL WITH 5G COMING TO IPHONE. LEIGH-ANN: WALL STREET EXPECTS THE IPHONE 12 TO KICKOFF A NEW CYCLE OF SALES GROWTH FOR APPLE. THAT IS YOUR BLOOMBERG BUSINESS FLASH. TOM: THANK YOU. LOOK AT THE DATA. WE PULL BACK LIKE A TURN OF THE MARKET, WE WILL GET RED AND GREEN ON THE SCREEN IN A MOMENT. OIL, $40 A BARREL ON AMERICAN OIL. WE BATTLE AT $1900 AN OUNCE ON GOLD. FRANCINE: I'M LOOKING AT EUROPE, LOOKING AT POUND. WE HAVE THIS BLOOMBERG SCOOP SAYING THEY WILL NOT TALK -- WALK AWAY FROM THE TALKS, MOVING STERLING ATTACHED OVERALL. WE'RE WAITING FOR A LOT OF THE EARNINGS TO COME OUT, WHICH IS WHY THE STOCK MARKETS ARE MOVING SIDEWAYS. NEXT, TALK COVID-19, STRUCTURE AND WITH LAUREN SAUER. THIS IS "BLOOMBERG." FRANCINE: THIS IS "BLOOMBERG SURVEILLANCE." AS WE CONTINUE TO TRACK THE VIRUS, BLOOMBERG HAS DEVELOPED A PARTNERSHIP WITH A LEADING AUTHORITY ON COVID-19. JOHNS HOPKINS HAS BEEN AT THE FOREFRONT OF THE INTERNATIONAL RESPONSE. EVERY DAY WE BRING INSIGHTS FROM EXPERTS. JOINING US TODAY IS LAUREN SAUER MY SISTER PROFESSOR OF EMERGENCY MEDICINE AT JOHNS HOPKINS. THANK YOU FOR JOINING US. THERE'S A LOT OF TALK ABOUT SOME OF THE VACCINE TRIALS, SOME OF THE SETBACKS HAVE SEEN BECAUSE CERTAIN PEOPLE HAVE FALLEN ILL. IS THIS A GOOD OR A BAD THING? LAUREN: IT IS A GOOD THING WE ARE SEEING THIS PROCESS PLAY OUT THE WAY WE WANTED TO, THE WAY IT IS WRITTEN ON PAPER THAT IT SHOULD. I DON'T WE WANT TO GET TO THE END OF THE PROCESS AND HAVE A SERIES OF THERAPEUTIC VACCINES THAT SEE NO ADVERSE EVENTS BECAUSE IT MEANS OUR THRESHOLD FOR WHAT THOSE ADVERSE EVENTS ARE IS NOT STRONG ENOUGH. WHAT WE'RE SAYING IS THE PROCESS THAT IS IN PLACE PLAYING OUT THE WAY IT SHOULD TO ENSURE WHEN WE GET TO THE END, WE KNOW WE HAVE A SAFE AND EFFECTIVE PRODUCT THAT WE CAN DISTRIBUTE. FRANCINE: WHAT IS THE COMMUNICATION NEEDED AROUND THAT? YOU'RE TALKING TO ME IN THE BREAK SAYING WE HAVE NEVER REALLY FOLLOWED THESE TRIALS SO CLOSELY. WHO IS THE BEST PERSON TO COMMUNICATE THIS TO THE GENERAL PUBLIC? LAUREN: I THINK THAT IS WHERE A LOT OF THE WORK HAS TO HAPPEN. THE PUBLIC IS NOT USED DURING THE INS ANNOUNCE OF THIS PROCESS AND EVERY SINGLE ADVERSE EVENT BEING REPORTED IN NATIONAL NEWS. ENSURING WE'RE WORKING WITH THE COMMUNITY MEMBERS WHO ARE GOING TO BE TAKING THE VACCINE, TAKING THE PRODUCTS, AND WORKING WITH COMMUNICATION GROUPS WHO REALLY UNDERSTAND HOW YOU TALK ABOUT RISK, HIGH TYPE ABOUT THE PROCESS, WORKING WITH PEOPLE HAVE SPENT THEIR WHOLE CAREERS ON THE BEST MESSAGING AND BEST COMMUNICATION STRATEGY IS ABSOLUTELY CRITICAL. FRANCINE: IS THE VIRUS LESS DEADLY THAN IT WAS THREE OR FOUR MONTH AGO? LAUREN: I DON'T THINK I AM THE RIGHT PERSON DISPUTED THAT. A LOT OF RILEY'S -- I THINK YOU'RE GETTING BETTER AT TAKING CARE OF PATIENTS WHO ARE INFECTED WITH THE VIRUS, SOME PERHAPS OUTCOMES ARE LOOKING BETTER. I DON'T THINK WE HAVE SEEN A LOT OF MUTATION IN THIS VIRUS WARRANT SAYING IS DIFFERENT OR LESS DEADLY. BUT WE AS THE SYSTEM, ESPECIALLY HEALTH CARE SYSTEM, HAVE GOTTEN BETTER AT ENSURING WHEN PEOPLE GET INFECTED WITH THE VIRUS, THEY GET THE BEST CARE. WE HAVE NEW STRATEGIES, NEW THERAPEUTICS COMING ONLINE. AND GETTING THEM OUT OF THE HOSPITAL AND SAFELY HOME. FRANCINE: GOING BACK TO THE VACCINE AND SOME OF THESE TRIALS BEING HELD, IS THERE A FEELING THAT POLITICAL PRESSURE IS OVERWHELMING SOME OF THE SCIENTIFIC RIGOR THAT IS NEEDED? LAUREN: I THINK WE WERE ALL FEELING THAT WAY A FEW MONTHS AGO AND INTO LAST MONTH. THE COMPANIES STEPPED UP AND SAID, WE WILL NOT CUT CORNERS ON THE SCIENTIFIC RIGOR. I THINK THERE IS A BIT OF WORRY THE EMERGENCY USE AUTHORIZATION MECHANISM, WHICH ALLOWS IT TO MAKE PRODUCTS FASTER TO THE PUBLIC, MAY HAVE LOWERED THE THRESHOLD FOR A COMPANY'S ABILITY TO OBTAIN THAT TOOL OR OBTAIN THAT CLASSIFICATION, AND THAT MAY REDUCE THE LIKELIHOOD OF PEOPLE IN CRITICAL DOES CLINICAL TRIALS. THAT IS WHAT WE HAVE TO WATCH, MAKING SURE WE DON'T OVERUSE THE EMERGENCY USE AUTHORIZATION MECHANISM AND MAKING SURE WE CAN COMPLETE ALL OF THESE CLINICAL TRIALS WE ARE GOING THROUGH SO WHEN WE GET TO THE OTHER SIDE, WE HAVE STRONG THERAPEUTICS, STRONG VACCINES, THAT THE PUBLIC IS WILLING TO TAKE AND USE. FRANCINE: HOW MUCH IS BEING DONE TO REALLY UNDERSTAND HOW WE DISTRIBUTE THE VACCINE ONCE WE HAVE THE FORMULA? LAUREN: THERE IS A LOT OF WORK IN THAT SPACE RIGHT NOW. THERE ARE PEOPLE WHO HAVE SPENT THEIR WHOLE CAREERS STUDYING THE MOST APPROPRIATE APPROACH TO THE SCARCE RESOURCE ALLOCATION AGNES THEM, SO TARGETING FRONTLINE RESPONDERS, TARGETING THE MOST VULNERABLE OF OUR POPULATION. THERE ARE AGENCIES WHO ARE REALLY FOCUSED ON THIS QUESTION. I THINK WE HAVE TO PAY CLOSE ATTENTION TO IT. NOT ONLY ARE WE GOING TO PRIORITIZE PEOPLE WHO MOST NEED IT, BUT THESE MIGHT BE THE PEOPLE MOST AT RISK AND SOME ARE ABSOLUTELY CRITICAL. WE DON'T WANT TO PUT ANYONE AT HIGHER RISK THAN THEY ABSOLUTELY HAVE TO BE. WE WANT TO MAKE SURE THE VACCINE STRATEGIES FOR DISTRIBUTION PROTECT THE MOST IN THE SHORTEST AMOUNT OF TIME. FRANCINE: WHAT DOES TRUMP'S ILLNESS PUT THE SPOTLIGHT ON? I KNOW THERE WAS FOCUS ON THE ANTIBODY DRUGS HE ALSO TOUTED AS A GREAT SUCCESS. IS THERE GOING TO BE A LOT MORE WORK DONE IN THAT FIELD? LAUREN: I THINK THERE'S BEEN A LOT OF WORK DONE IN THE ANTIBODY FIELD AND WE WILL CONTINUE TO SEE THAT DEVELOPMENT FOR MYRIAD OF DISEASES. I THINK IT IS GREAT AND PUTS A SPOTLIGHT ON THIS TYPE OF THERAPEUTIC, BUT THEY ARE EXPENSIVE AND HARD TO PRODUCE AND HARD TO DISTRIBUTE. I THINK FOCUSING ON THAT ELEMENT WILL BE CRITICAL. I THINK IT HIGHLIGHTS THE DISPARATE LEVELS OF CARE IN AMERICA. THAT WILL BE SOMETHING THAT IS REALLY IMPORTANT TO FOCUS ON. SO HE GOT EVERY THERAPEUTIC AVAILABLE. HE GOT MEDEVAC TO WANT TO READ. HE GOT TRANSPORTED AND CARED BY SOME OF THE TOP CLINICIANS IN THE COUNTRY, INCLUDING ONE OF OUR OWN. IT IS FANTASTIC TO SEE THAT HAPPEN, BUT WE ALSO HAVE PEOPLE DYING EVERY DAY OF THIS VIRUS BECAUSE THEY CAN EITHER ACCESS CARE OR HAVE OTHER -- UNDERLYING MEDICAL CONDITIONS THAT LIMIT THEIR ABILITY TO RECOVER FROM THE VIRUS. I THINK IT REALLY DOES HIGHLIGHT THE DISPARATE LEVELS OF CARE IN AMERICA AND THE DISPARATE LEVELS OF ACCESS TO CARE. FRANCINE: LAUREN SAUER, THANK YOU SO MUCH. TUNE IN EVERY DAY FOR OUR EXCLUSIVE CONVERSATION WITH JOHNS HOPKINS EXPERTS. LET'S GET STRAIGHT TO THE FIRST WORD NEWS. LEIGH-ANN: PRESIDENT TRUMP IS BATTLING DEMOCRATS AND REPUBLICANS OVER A PROPOSED SEAMLESS PACKAGE. HE IS TELLING SENATE REPUBLICANS TO "GO BIG OR GO HOME" WHEN IT COMES TO PROPOSAL THAT MAJORITY LEADER MITCH MCCONNELL IS ONLY PROMISING INVOKE UNDERPAID PACKAGE REPLACEMENT PLAN FOR SMALL BUSINESSES. HOUSE SPEAKER NANCY PELOSI SAYS A WHITE HOUSE PLAN COMES UP SHORT. SHE IS DEMANDING SIGNIFICANT CHANGES. SUPREME COURT NOMINEE AMY CONEY BARRETT AVOIDED ANY MAJOR SLIP IN A DAY OF QUESTIONING ON CAPITOL HILL. SENATE DEMOCRATS ASKED HER ABOUT ABORTION RIGHTS, HEALTH CARE LAW, THENCE, AND ALEXION'S FEES. THEY MADE LITTLE PROGRESS DERAILING HER LIKELY CONFIRMATION. WILL NOT WALK AWAY WITH TRADE TALKS IN ITALY. PRIME MINISTER BORIS JOHNSON HAS THAT TOMORROW IS THE DEADLINE FOR AN AGREEMENT. NEGOTIATORS ARE EXPECTED TO KEEP TALKING PAST THEM. JOHNSON AND EUROPEAN COMMISSION PRESIDENT DISCUSSED THE AND PASS ON A PHONE CALL TODAY. RUSSIAN PRESIDENT VLADIMIR PUTIN AND SAUDI CROWN PRINCE MOHAMMED BIN SALMAN URGING OPEC AND ITS ALLIES TO STICK TO BIG GREED -- TO STICK TO AGREE PRODUCTION CUTS. WHILE PRICES ARE BARELY ABOVE $40 A BARREL AND YOU CORONAVIRUS OUTBREAKS ARE HURTING DEMAND. THE NEW YORK POST SAYS I'M ELSTROM HUNTER BIDEN SHOWS HE INTRODUCED HIS FATHER -- SHUT -- SAYS I'M ELSTROM HUNTER BIDEN INTRODUCED HIS FATHER. THE MEETING IS AGILE HAVE TAKEN PLACE. THE DEMOCRATIC PRESIDENTIAL NOMINEE IS THAT HE NEVER DISCUSSED HIS SENSE BUSINESS DEALINGS WITH HIM. GLOBAL NEWS, 24 HOURS A DAY, ON AIR AND AT QUICKTAKE BY BLOOMBERG, POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN MORE THAN 120 COUNTRIES. I AM LEIGH-ANN GERRANS. THIS IS BLOOMBERG. FRANCINE: COMING UP NEXT, GERARD CASSIDY, RBC. MORE OF THE COMPANY, AND WE WILL TALK ABOUT THE OUTLOOK. THIS IS "BLOOMBERG." TOM: GOOD MORNING. "BLOOMBERG SURVEILLANCE." NOW WE CONSIDER THE BANKS. LET'S GET TO IT. BANK OF AMERICA, GERARD CASSIDY WITH RBC CAPITAL MARKETS. FOR OUR NON-PRO AUDIENCE, WHAT IS THE DIFFERENCE BETWEEN BANK OF AMERICA AND J.P. MORGAN? GERARD: THERE'S NOT TOO MUCH DIFFERENCE. BOTH ARE CONSIDERED TO BE UNIVERSAL BANKS. WHAT WE CALLED MONEY CENTER BANKS. BANK OF AMERICA IS HEADQUARTERED IN CHARLOTTE. JP MORGAN, NEW YORK STOP YOU LOOK AT THE MIX OF BUSINESS, THERE'S NOT TOO MUCH IN DIFFERENCES. ONE DIFFERENCE I WOULD HIGHLIGHT IS THE AMOUNT OF REVENUE COMING FROM OUTSIDE THE UNITED STATES AT BANK OF AMERICA IS AROUND 10% AND J.P. MORGAN CHASE IT IS CLOSER TO 20%. BUT THEY BOTH HAVE A MIX OF CONSUMER, COMMERCIAL, AND INVESTMENT BANKING. TOM: OVER THE LAST 10 YEARS, JP MORGAN HAS OUTPERFORMED BANK OF AMERICA BY OVER 300 BASIS POINTS, ROUGHLY 12%, MAYBE 13% VERSUS 9% OR 10% AT BANK OF AMERICA PER YEAR. WAS THAT BECAUSE BRIAN MOYNIHAN WAS HANDED A BIGGER CHALLENGE THAN JAMES DIMON? GERARD: YOU'RE ABSOLUTELY RIGHT. THE MESS THAT BANK OF AMERICA WAS IN IN 2008 AND 2009 WAS UNBELIEVABLY BAD. FOR J.P. MORGAN CHASE, ON THE OTHER HAND, THEY HAD CHALLENGES BUT THEY WERE NOWHERE CLOSE TO WHERE BANK OF AMERICA WAS. BANK OF AMERICA AND CITIGROUP BACK IN THESE DAYS WERE PROBABLY THE TWO BANKS THAT DID NOT HAVE THE GOVERNMENT INVESTMENT OR BAILOUT KNOWN AS TARP. THOSE TUBINGS COULD HAVE FAILED. JP MORGAN WASN'T EVEN CLOSE TO THAT. -- THOSE TWO BANKS COULD HAVE BUILT. JP MORGAN WASN'T EVEN CLOSE TO THAT. FRANCINE: HOW DO THESE BANKS GROW IN GENERAL WHEN INTEREST RATES ARE SO LOW? GERARD: FRANCINE, THAT IS THE BIG CHALLENGE FOR THE GROUP. THAT IS WHY YESTERDAY WHEN YOU SAW THE EARNINGS OF TWO OF THE BIG BANKS, THOUGH THE NUMBERS WERE BETTER THAN EXPECTED, INVESTORS RIPPED THROUGH THOSE EARNINGS BECAUSE OF THE LOW INTEREST RATE ENVIRONMENT AND THE APPLICATIONS OF THAT. I THINK WHAT YOU'RE GOING TO SEE IF YOU NEED TO SEE THE ECONOMY, STRONG. THIRD QUARTER REAL GDP WILL BE A BIG NUMBER BUT THAT IS REALLY NOT A REAL NUMBER CONSIDERING IT WAS COMPARED TO THE SECOND QUARTER NUMBER. IF WE COULD SEE 3% TO 4% REAL GROWTH, LOAN GROWTH SHOULD NEAR THAT TYPE OF GROWTH. IT IS DEPENDENT UPON REAL GDP GROWTH IN 2021. FRANCINE: ARE WE GOING TO BE ILLICIT WITH THE NEXT EARNINGS COMING UP IN A COUPLE OF MINUTES WHAT THE CONSUMER IS DOING IN THE U.S. OR IS IT JUST A BIT FUZZY BECAUSE OF REOPENING OF THE ECONOMY TOO QUICK? WE DON'T KNOW IF PEOPLE WILL SAVE MORE IN THREE OR FOUR MONTHS FROM NOW. GERARD: THE CONSUMER, BELIEVE IT OR NOT, IS IN GOOD SHAPE. WE DO RECOGNIZE THE ELEVATED LEVELS OF UNEMPLOYMENT AND IN THOSE CASES, OBVIOUSLY, THE CONSUMER IS STRUGGLING TO FIND A JOB. BUT FOR THE 92% OF AMERICANS THAT ARE EMPLOYED, THEIR BALANCE SHEETS ARE IN GOOD SHAPE. THEY WERE NOT OVEREXTENDED GOING INTO THE DOWNTURN. THE FISCAL STIMULUS, THE $1200 THAT MANY PEOPLE RECEIVED, OBVIOUSLY, WOULD INTO THEIR CHECKING ACCOUNTS AND SO WHAT WE ARE SEEING WITH THE CONSUMER RIGHT NOW IS THAT THEY ARE RUNNING OUT AND SPENDING THEIR MONEY LIKE THEY NORMALLY WOULD DO DURING NORMAL EXPANSION. YOU ARE SEEING THAT SHOWING UP IN THE CREDIT CARD RECEIVABLES OUTSTANDING. THEY ARE SHRINKING FROM THE BIG BANKS LIKE J.P. MORGAN CHASE BECAUSE CONSUMERS ARE NOT SPENDING AS MUCH AS THEY WERE A YEAR AGO. SO WE REALLY NEED TO SEE THE UNEMPLOYMENT RATE COME DOWN FOR THE CONSUMER TO COME BACK AND START SPINNING. OTHER THAN HOUSING, WHICH IS VERY STRONG. FRANCINE: GERARD CASSIDY, YOUR GREAT OUTFRONT -- TOM: GERARD CASSIDY, YOU WERE GREAT OUTFRONT ON THE FUTURES. AND A MAJOR TIP OF THE HAD TO TRUST PEABODY. ARE WE IN THE SPOT RIGHT NOW ARE LISTENERS AND VIEWERS SHOULD BE MODELING THE BANKS BASED ON USE OF CASH IN 2022 AND 2023? GERARD: THE BIG CHALLENGE, TOM, COMPARED TO THAT TIME PERIOD IS TODAY, THE BANKS DON'T HAVE THE STEEPNESS IN THE YIELD CURVE AND THEY DON'T HAVE THE HIGHER LEVEL OF INTEREST RATES. AND BECAUSE OF WHAT HAS HAPPENED, THE FEDERAL RESERVE, ITS BALANCE SHEET HAS BALLOONED UP TO ALMOST $7 TRILLION FROM JUST UNDER FOUR TROY DOLLARS AT THE START OF THE PANDEMIC. -- FOR TRAINING DOLLARS AT THE START OF THE PANDEMIC. A GOOD PORTION HAS ENDED UP IN THE INTEREST TREES, STREET -- THE INDUSTRY'S BALANCE SHEET AND DEPOSITS. THE MIX HAS CHANGED QUITE A BIT SINCE THAT PRIOR TIME PERIOD. IT IS REALLY CHALLENGING THE BANKS BECAUSE OF THE LOW RATE ENVIRONMENT AND THE FUNDS ON THE BALANCE SHEET. TOM: THIS IS REALLY IMPORTANT TO UNDERSTAND WE ARE AT THE ZERO BOUND VERSUS 2011, 2012 WHEN WE WERE NOT. IF THAT IS THE CASE, GERARD CASSIDY, WHAT DO THEY DO BESIDES CONTINUE THE DIGITAL TRANSFORMATION WHERE THEY ARE WAY OUTFRONT, DO SOME INTERNATIONAL COME AND CUT COST, CUT COST? THAT SEEMS TO BE THE ONLY STRATEGIC PLAN TO ME. GERARD : OVER THE NEXT 12 MONTHS, EXPECT TO SEE A NUMBER BANKS MAKE ANNOUNCEMENTS ABOUT COST-CUTTING FOR THIS VERY REASON. UNLESS WE GET A STEEPENING IN THE CURVE, POSSIBLY DUE TO SOME ELEVATED LEVELS OF INFLATION DUE TO THE FISCAL AND MONETARY POLICIES OF THIS COUNTRY IN 21 OR 22, IT IS GOING TO PUT PRESSURE ON THE BANKS MARGINS. DO YOUR POINT, WHAT DO YOU DO? CUTTING COSTS WILL BE ONE OF THE STRATEGIES AND PROBABLY A VERY BIG STRATEGY FOR MANY OF THE BANKS. FRANCINE: IS BANK OF AMERICA LENDING TO THE BUSINESSES IT SHOULD BE LENDING TO? GERARD: THE ANSWER IS YES. I HAVE OFTEN SAID BANKS ARE IN THE BUSINESS TO LEND MONEY. EVERY TIME WE GO INTO A DOWNTURN, YOU HEAR ABOUT THE BANKS NOT LENDING TO THEIR CUSTOMERS OR TO NEW CUSTOMERS. CREDIT WORTHY CUSTOMERS CAN BORROW MONEY FROM BANKS LIKE MAKE UP AMERICA. IF YOU'RE NOT CREDITWORTHY, THEY ARE GOING TO MAKE ALONE. -- THEY ARE NOT GOING TO MAKE THE LOAN. THE BENDS ARE FULL OF LIQUIDITY. THEY ARE FULL OF CAPITAL. BANK OF AMERICA AND OTHER BIG BANKS OR ALL THE BANKS ARE LOOKING TO GROW THEIR BUSINESS TO CREDITWORTHY CUSTOMERS. TOM: GEORGE CASSIDY WITH RBC. WE WELCOME YOU ALL AS WE AWAIT BANK OF AMERICA. ALISON WILLIAMS WITH US RIGHT NOW WITH BLOOMBERG INTELLIGENCE. WAY TOO MANY RUGGED CHICKEN LODGES -- RUBBER CHICKEN LUNCHES WITH GERARD CASSIDY. WHAT WE LOOK FOR FROM BANK OF AMERICA? YOUR GREAT YESTERDAY ON JP MORGAN AND DIVING INTO CERTAIN STATISTICS. WHAT MATTERS THIS TIME AROUND? ALISON: THE NUMBER ONE THING, THE FIRST THING WE WILL LOOK AT, IS THE PRIVATIONS AND NOT JUST THE OVERALL EXPENSE BUT WHAT IS HAPPENING WITH CHARGE-OFFS AND WHAT IS HAPPENING WITH THE RESERVE RELIEF. ANYTHING WE CAN FIND OUT UNDERLYING THOSE CREDIT TRENDS. TOM: LET ME INTERRUPT BECAUSE YOU'RE THE ONE I WANT TO TALK TO ON THIS. BANK OF AMERICA Q3 PROVISION FOR CREDIT LOSSES, 5.1 BILLION DOLLARS VERSUS AN ESTIMATE JUST UNDER $2 BILLION. THAT IS A LITTLE DIFFERENT THAN WHAT WE SAW FROM JP MORGAN. ALISON: THAT IS QUITE DIFFERENT. TOM: WHY? ALISON: THE MAIN THING WE WANT TO HEAR ABOUT IS SO BANK OF AMERICA, SIMILAR TO ALL THE BANKS HAD SORT OF TALKED ABOUT THOSE PROVISIONS, THE RESERVE BUILDING COMING DOWN LARGELY BECAUSE I GUESS ONE OF THE FACTORS IS THE FACT THE ECONOMIC ASSUMPTIONS HAVE IMPROVED SINCE THE LAST TIME WE HEARD FROM BANKS. WITH THE BIG BUILDUPS THAT WE SAW IN THE FIRST COUPLE OF ORDERS WAS REALLY DUE TO THE WORSENING OF THE ENVIRONMENT. SINCE THEN, THINGS HAVE STABILIZED TO IMPROVE AND SO WHAT ARE THEY SEEING THAT IS PUSHING THEM TO SET ASIDE MORE MONEY FOR THESE LOANS. FRANCINE: I HAVE TO SAY AT FIRST LOOK THESE ARE NOT GREAT RESULTS. IF YOU LOOK AT THE THIRD QUARTER, 37 SINCE INSTEAD OF THE $.56. THIS IS A PROVISION FOR CREDIT LOSSES FOR THE THIRD QUARTER. ALMOST THREE TIMES, ALMOST FOUR TIMES WHAT WE WERE EXPECTING AT 5.1 MILLION DOLLARS INSTEAD OF THE $1.8 BILLION. I KNOW THEY'RE TRYING TO GO TO THE REPORTS AND EVERYTHING. IS THERE ANYTHING ELSE THAT JOHN SENT YOU? -- IS THERE ANYTHING ELSE THAT JUMPS AT YOU? ALISON: I HAVE NOT SEEN THE RELEASE, SO I'M NOT SURE IF THE HEADLINE IS RIGHT OR WRONG. I'M STILL TRYING TO PULL THAT UP. AGAIN, THE TWO THINGS ARE THE PROVISION -- LOAN PORTFOLIO IS ANOTHER REASON WHY -- WE SAW THOSE DECREASES. I TALKED ABOUT THE ECONOMIC ASSUMPTIONS, BUT IT WAS REALLY THE DECREASE IN LOANS THAT WAS THE DIFFERENTIATOR. IF YOU LOOK AT THE RESERVE RATIO FOR BOTH CITI AND JP MORGAN, IT WAS ABOUT STABLE. CITI IS A LITTLE HIGHER AND THAT IS BECAUSE LOADS ARE COMING DOWN JUST BECAUSE OF LESS DEMAND IN THE CURRENT ENVIRONMENT. TOM: GEORGE CASSIDY WITH US. I WANT TO MAKE THEIR MS. WILLIAMS IS LOOKING FOR THE RELEASES AS WE ARE. THE WAY THEY DO THIS IS WRONG, WRONG, WRONG. WE GET LITTLE DRIBBLE OF HEADLINES DUTIES GERARD CASSIDY AS WE ALL AWAIT THE ACTUAL DOCUMENT FROM BANK OF AMERICA. THE VATICAN OR SOMETHING WHERE THEY BRING IT UP FROM THE BASEMENT. GERARD CASSIDY, WHAT WILL THE ACTUAL DOCUMENT SAY IN TERMS OF 5 BILLION OF CREDIT LOSSES? WHERE DID THEY OCCUR? WHAT IS YOUR BEST GUESSTIMATE? GERARD: IT IS HARD TO SAY BECAUSE IT IS VERY SURPRISING THERE PROVISION FOR LOAN LOSSES IS CONSIDERABLY HIGHER THAN EXPECTATIONS IN VIEW OF WHAT WE SAW YESTERDAY. IT ALSO IN VIEW OF THE IMPROVEMENT IN THE ECONOMY. WITH THE NEW ACCOUNTING FOR LOAN LOSS RESERVE BUILDING, WHICH TAKES A LOW LOSS RESERVE INTO ACCOUNT, THE BANKS HAVE TO DO A LIFE OF LOAN ANALYSIS. THAT TAKES INTO ACCOUNT THE STATE OF THE ECONOMY. THE ECONOMY HAS IMPROVED FROM THE SECOND QUARTER, WHICH IS WHY WE SAW SUCH IMPROVEMENT YESTERDAY. I BANK OF AMERICA -- TOM: I HAVE TO RUB. -- I HAD TO INTERRUPT. WE HAVE A CORRECTION. FRENZIED AND I ARE NOT HAPPY ABOUT THIS. WE WILL STOP THE SHOW RIGHT NOW BECAUSE THIS IS AN CORRECTION. BANK OF AMERICA PROVISION FOR CREDIT LOSSES WAS NOT 5 BILLION. IT WAS 1.30 9 BILLION. GERARD, I WILL START WITH YOU AND THEN GO TO ALISON. THIS IS MUCH MORE LIKE JP MORGAN WHERE INSTEAD OF 1.9 BILLION, WE HAVE 1.4 BILLION IN CREDIT LOSSES AND IT IS JP MORGAN-LIKE, CORRECT? GERARD: CORRECT. AND MY HEART IS BACK IN MY CHEST. THAT IS MUCH MORE IN LINE WITH BETTER THAN EXPECTATIONS COME AS YOU POINTED OUT, BUT MORE IN LINE WITH THE OTHER TWO. IT WAS RATHER SHOCKING IT WOULD HAVE BEEN 5 BILLION. IT WAS AN ERROR. SINCE THE SECOND, THESE BANKS HAVE TO MAKE THESE ASSUMPTIONS ABOUT THE FUTURE OF THE ECONOMY. IT HAS IMPROVED. TOM: ALISON WILLIAMS, MASSIVE CREDIT MISTAKE BY BLOOMBERG. I WANT TO BE SURE FOLKS UNDERSTAND, WE REPORTED 5 MILLION IN CREDIT LOSSES AND THE NUMBER IS DRAMATICALLY BETTER FOR MR. MOYNIHAN AND THE TEAM AND DOING BETTER. ALISON WILLIAMS, WE ARE SEEING BETTER CREDIT LOSSES FROM BANK OF AMERICA, J.P. MORGAN, AND THE REST. IT IS THAT -- IS THAT BECAUSE THE CREDIT LOSSES ARE TO COME IN Q4 DID THEY DODGE THE PROVERBIAL PANDEMIC BULLET? ALISON: I THINK WHAT WE'RE SEEING THIS QUARTER, AS I SAID, WE WILL SEE IF IT IS THE CASE WITH BANK OF AMERICA, THE 5.1, BY THE WAY, HIS LAST ORDER NUMBER, AND THE EXPECTATION WAS 1.9 AND THE ACTUAL IS 1.4. LOWER THAN EXPECTED. WHAT WE ARE BANKS IS THE BALANCES ARE COMING DOWN. THE RESERVE RATIOS ARE STEADY, WHICH MEANS THEY ARE NOT REALLY CHANGING THEIR VIEW ON CREDIT. KEEP IN MIND THE ACCOUNTING FOR THESE BANKS IS THAT IN THE FIRST HALF, WE HAD THIS ACCOUNTING CHANGE AND BASICALLY WHAT THE BANKS ARE REQUIRED TO DO IS LOOK OUT OVER THE LIFE OF THESE LOANS AND SAY WHAT THEY EXPECT OVER THE LIKE. THE CHARGE-OFFS REALLY HAVE NOT STARTED TO COME THROUGH. JP MORGAN AND CITIGROUP BOTH SAID THEY EXPECT THINGS TO REALLY SIGNIFICANTLY INCREASE IN THE SECOND HALF OF NEXT YEAR. A LOT OF THAT RELATES TO THE FLOW-THROUGH OF CREDIT CARD. THE ACCOUNTING ON THE WAY THE DELINQUENCIES WORK IN THE FACT WE HAVE A LOT OF FISCAL SUPPORT -- EXCUSE ME, THE GOVERNMENT SUPPORT IN THE PROGRAMS RIGHT NOW. IT IS A MATTER OF MATH AND TIMING THAT THOSE CHARGE-OFFS ARE NOT GOING TO COME THROUGH. THE PROVISIONS WE SAW FROM THE FIRST HALF REALLY WERE LOOKING TOWARD THAT. FRANCINE: WHY CAN THEY NOT SIMPLIFY WHAT THEY PUT OUT IN TERMS OF EARNINGS? WHO GETS IT RIGHT? WHAT IS THIS SO COMPLICATED TO UNDERSTAND? ALISON: BECAUSE THE ACCOUNTING IS SO FORWARD-LOOKING. THIS IS A NEW RULE. BASICALLY MADE TO, DAY ONE, SET ASIDE WHAT YOU THINK OVER THE LIFE THAT I THINK THE IMPACT IT HAS, THE IMPACT WE SAW IN THE FIRST HALF IS SOMETHING WE CALL A LITTLE PROCYCLICAL. WHEN THINGS START TO WORSEN, THE PROVISIONS ARE SO MUCH BIGGER. WHEN THINGS START TO IMPROVE, IT WILL GO THE OTHER WAY. TO SOME EXTENT, THE BANKS ARE PREPARING THEIR BALANCE SHEET FOR THE PAIN TO COME. I THINK BEYOND THAT, AS I SAID, WE'RE GOING TO WANT TO LOOK TO SEE WHAT IS HAPPENING WITH THE LOAN PORTFOLIO. COMMERCIAL BALANCES ARE SHRINKING ACROSS THE INDUSTRY. CARD BALANCES HAVE BEEN DECLINING. PROBABLY SOME OF THE REASON FOR THE RESERVE. ALSO THE REASON WHY WE'RE ARE GETTING THE NET INCOME -- INTEREST INCOME HIT MOST OF TRADING, WHICH HAS BEEN A GREAT STORY, IS NOT NECESSARILY REPEATABLE. I THINK THAT WAS THE WERE YESTERDAY. THE BIG SURPRISES ARE BETTER TRADING, BUETTER CAPITAL MARKETS. TOM: ALISON WILLIAMS AND GERARD CASSIDY, WORLD-CLASS PERFORMANCE. WE THANK YOU FOR THE LAST 15 MINUTES. GERARD CASSIDY WITH RBC AND ALISON WILLIAMS HOLDING COURT AT BLOOMBERG INTELLIGENCE AS WELL. TO BE CLEAR, WE CORRECTED ON THE CREDIT LOSSES AS BEST WE COULD. BETTER NUMBERS FOR BANK OF AMERICA THAN WE PUBLISHED 15 MINUTES AGO. I'M BLOOMBERG MARKETS TODAY,

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'Bloomberg Surveillance' Full Show (10/14/2020)

Stocks, bonds, currencies and commodities. This is Bloomberg Surveillance. Live every morning from New York to London. Tom Keene and Francine Lacqua deliver insight on the markets with leaders in global finance and economics. Leslie Vinjamuri, Chatham House Head of U.S. & Americas Programme, says there is concern that election result delays may cause unrest. Isabelle Mateos y Lago, BlackRock Global Head of Official Institutions Group, says there is a lot of uncertainty around U.K. assets and the market is not optimistic about avoiding further lockdown restrictions. David Pearl, Epoch Investment Partners Co-Chief Investment Officer and Portfolio Manager, says the steepening of the yield curve will effect growth stocks negatively. (Source: Bloomberg)