caroline: that is the key question, whether we get the stimulus. ben bernanke and the new york times calling on fiscal stimulus to support the measures taken by monetary policy, and that echoed by said president harper, trying to reiterate the need for congress to pass something before their break in mid-august. likedw, the market has what they see in terms of coronavirus vaccine hopes and this rotation trade. romaine: those are your closing numbers. want to bring you a number here after the bell. shares up 6%. said to hold talks for an investment and freight unit. $500 million in funding for that freight unit. at aboutalue the unit $4 billion. a lot of shares moving higher today, taylor.

we were talking about it with some of the smaller and mid-cap names. we saw some of the cruise line stocks, the casinos. the restaurants were on fire. cracker barrel up 9%, 10%. don't you like that? caroline: i have not been to a cracker barrel. romaine: exit through the gift store. taylor: this really all comes back to the data that we got this morning. june industrial production and july early numbers out of manufacturing all better-than-expected. are hearing from dances of the of richard bernstein advisors. thank you for being with us. you take a look at the positive economic numbers. the big outperformance in the russell 2000 today. you said you were a little overweight on u.s. versus the rest of the world.

how do you think about that going forward? small-cap producers getting a big win? dan: i think modest overweight on the u.s. still makes sense, but i think moving that angry mental dollar outside the u.s. makes more sense. clear thatis very the data is getting better in the u.s., but i think that what is going to be critical is to see the way that stimulus takes form. the way i characterize this recovery, we've gone from a 100% economy to a 0% economy. i think if we are lucky, we will get to 80%, 90% by the end of the year, but that is still lacking any further stimulus, there's a lot of businesses about to go under, a lot of

people to get laid off, and a lot of delinquency and bankruptcy to come. you said there's so much lack of clarity when you are trying to see where this market goes next. how are you hedging? hedging ork that diversifying is critical at this stage. some highess you have confidence in how the future is going to shape out, this doesn't make a lot of sense. we are starting to see targeted risk on both sides of the portfolio. exposuregetting through areas like transports, energy, materials, is a good way to play the recovery. but there's a lot of uncertainty in the way that recovery is going to play out.

lesscing that out with economically sensitive sectors is going to help balance out that. and just from a quality perspective, it makes sense to have a quality overlay in the portfolio. even if this recovery is going to be sustained. caroline: in the middle of all that we are going through here, we are also four months away from the u.s. presidential election. how much stock do you put, no pun intended, how much concern do you have about any outcome of that election? do you make any changes to your portfolio, or do you just sort of ride this out and assume that no matter the administration, 2020 one, equity markets will find a path forward? dan: it is no doubt that as we approach the election, you are

going to see volatility pickup. i think that is very clear. especially this election. but we are not the type of firm that is going to create the anticipation for that type of event. we are going to be more focused on the fundamentals. seen the likelihood of a democratic sweep picking up and that is getting priced into the markets. way youink that either will probably still see volatility pickup. people are going to start to price in tax increases. one of the things that is missed by the consensus, there will probably be tax increases over the next several years regardless of who wins the election. if that continues, then you're are going to see the trump campaign get more vocal on the

issues that have been popular with his base. in particular, more escalation of trade tensions with china. either way, i think volatility should pick up. suzuki, we always love having you on. dan suzuki of richard bernstein here, the deputy cio there. that does it for the closing bell. "what'd you miss?" is up next. we will be speaking with dr. wayne frederick on reopening higher education. top-tier athletes looking at hbcus and the black lives matter movement. from new york, this is bloomberg. ♪

taylor: from bloomberg world headquarters in new york, i'm taylor riggs. romaine: i'm romaine bostick. caroline: and i'm caroline hyde. this is "what'd you miss?" we see five-week highs for the s&p 500. the all country world index led higher by the u.s. risk on mood as we focus on hopes for a vaccine. and it was almost indecent. goldman sachs reports the best trading results in years. will it spark a backlash? and what of morgan stanley and bank of america numbers? we get more details, next. and a big win for apple. the tech giant won its court fight over a tax bill. ep fromk with a key m

the vice president of renew europe. romaine: big news on virgin galactic, richard branson's space company naming a new ceo. he had been the disney parks international head for a while. they are also naming a chief space officer, george whiteside, who had formerly been at nasa. virgin galactic also saying it is preparing for commercial services and progressing through its test flight program. a lot going on today. we had bank earnings today. we are going to have more bank earnings tomorrow, right? taylor: we are. so interesting when you look at the underlying fundamentals. let's just pull up a calendar and show you where we are this week. where do we go from here? we heard from goldman, jp

morgan, and other banks. crushing,nue is particularly in the equity business. those traders really holding their own. bank of america and morgan stanley, further updates on that trading revenue and health of the economy. good news today from goldman. i want to hear what some of these bank executives had said so far. take a listen. the consequences remain unclear. >> we cannot forecast a future we don't know. >> we are in a completely unpredictable environment. >> you are going to have a murky economic environment going forward. >> we are navigating an uncertain economic backdrop brought on by a global health crisis. >> the pandemic has a grip on

the economy and it doesn't seem likely to loosen until vaccines are widely available. >> we expect the impact of covid to continually impact our earnings until we see meaningful improvements in unemployment and gdp. taylor: for more i want to bring in the president and portfolio manager of sneed capital management. as you look at bank earnings so far, is the big standout the massive gains in trading revenue, and are you worried that may not be sustainable? revenue with all volatility we have seen is kind of the marquis. what they just laid out seems very dour. the fact that they don't know what their profitability is going to be, until this dissipates, is all the uncertainty they are communicating. as a bank stock investor, you

have to buy financial institutions when you can't say good words. go back to 2008-2009. there wasn't anything good to say at the bottom. you wake up at junctures like these where they've made good money and we are in a situation where the banks are cheap again. the economic situation looks murky. it looks like a great time in the u.s. economy with households. the biggest businesses are the ones that had the biggest trouble. businesses were not ready for this pullback. households have really been in the driver's seat from a historical perspective. caroline: is it time to get into the banks because they are so cheap or is it that they might start to fundamentally outperform despite the concerns about bankruptcy and the loans

they are putting aside? cole: go back to what they said about their earnings being lower. let's just kind of close our eyes and envision a world where you don't have to be a genius to think there's a vaccine in three years. what are the earnings going to be then? probably higher on the margin. what will the multiples be when people figure that out? as an investor, it is amazing. at the same time, trying to figure out when that takes place, that is a terrible way to be an investor. know when no one is optimistic and no one wants to pay high multiples. the multiples are 2008-2009-esque and we don't have a credit crisis. it is just completely different. is this a near-term problem?

yes. they are better capitalized than they have ever been. wells fargo cut their dividend. if i was wells fargo, i wouldn't pay a dividend. let's just buy back stock. the fed would be friendly to that, much like bank of america couldn't pay a higher dividend back in 2012 and 2013. these are ideal prices for the buyers of stock. romaine: great point and obviously great dressing there. glad to see you are wearing the summer seersucker. but in all seriousness, when you move away from the more diversified banks to some of the financial companies that are much more about consumer spending, synchrony and some of those names, do you have as much confidence in those names given that they don't have trading to fall back on and other departments? cole: it is a great question.

i'll use wells fargo. they reported debit card transactions were flat and credit card transactions were down 20%. let's use a bank like american express, consumer credit oriented, less about trading and commercial banking. business going to be impacted? sure. express'and american case, they collect membership fees for their credit cards. they have offsetting lines of income that other banking institutions don't have. visa and mastercard banks don't collect those fees. the pain of this is going to get handed out differently. let's take one step further. what could fall in the place of the banks that is a benefit that isn't being talked about heavily outside of some stocks, the

mortgage banking side. housing is scarce. housing is booming. context,a historical that could be a big driver in bank earnings. that may not be in the cities we see now. california is tough to develop. certain cities just have cheap dirt. these banks are going to look different. wells is going to shut locations. mortgage banking could be bigger. if you are a credit card company, the personal savings rates of american households now argue that you are not going to have that much trouble. 2008-2009, it was terrible savings rates. only time got us out of that problem. this is nowhere near the gravity of what we dealt with then. caroline: thanks so much for joining us.

inhave some breaking news terms of earnings. coming out with its second-quarter adjusted loss per share, off two cents. it reported a preliminary eight cents. second-quarter sales were down 23% year on year. than 50% year on year, but the market likes it. we are up almost 5%. romaine: in the world of government and politics, supreme court justice ruth bader ginsburg has left the hospital. she has been discharged and is apparently doing well at home. ruth bader ginsburg, the oldest justice on the u.s. supreme court, back at home, doing well. and a programming note, for more on the banks, don't miss bloomberg's conversation with morgan stanley's ceo. from new york, this is bloomberg. ♪

romaine: all right, a court fight over 15 billion u.s. dollars in taxes. apple winning a big victory in europe, the e.u. reversing a decision that would have forced apple to pay a record 13 billion euro irish tax bill, a blow to the european antitrust chief, who has been trying to crackdown on preferential fiscal deals for companies. joining us now is a member of the european parliament, joining us now. thank you for being here today. this is obviously raising a lot of issues. not only so much for what apple but reallynot owe, about the taxation systems we

have around the world and the lack of unification that allows these companies to sign preferential ways to plot their taxes and finances. do you see any path forward given this ruling that you can still recoup some of that money? >> no. it is indeed an extremely damaging ruling for europe. we have a few countries, mostly smaller countries, that basically have this model, helping companies evade their tax obligations in other countries. europe has been trying to harmonize them. that has been impossible. agreemento impose an by the end of the year, but the u.s. has stopped this agreement. they said it won't work. and finally, the competition commissioner has been trying to do a competition law, by saying

this is not allowed because it makes the single market not a level playing field. and there's really very little that european countries can do to try to level the playing field. idea of using general market rules, but that is going to be a long shot. caroline: a long shot and in many ways the firing back from the court was that this didn't give enough legal precedent or ramification around all of this. you say that really this is denting competition. do you think you will be able to show that? that it is indeed hurting competition? apple just claims, you are punishing us for tax planning. >> the truth of the matter is, tax ratethe effective

that apple was paying was 0.005% of their profits. argue that that is providing a level playing field. so, yes, i do honestly believe this is harming competition in the single market. let me just give you one other example, just for your audience. paid a in spain in 2018 total of $3000 in corporate taxes. that is probably less than the revenue they make in an apartment block in madrid. taylor: can you comment on how this sets up ireland versus the rest of the e.u.? there was some frustration. how does this set up the dynamic

with members of the e.u.? >> i think that competing on taxes to some extent is healthy. i'm happy that that could happen. you oneme give particular situation. where u.s., you pay taxes your legal headquarters is. in ireland, you pay taxes according to where your effective management is, the u.s. a company in ireland with these rules wouldn't pay taxes in the u.s. and wouldn't pay taxes in ireland. this is really eroding the basis of the competition. romaine: vigorously you are working with -- and the general push she's made has caught a lot of attention. there's some people who would say some of the things she's pushing for would be better left

to the oecd or more international or global bodies. what is your response to that? >> there's a lot of desperation in my response. i would love the we cd to do this harmonization of the corporate tax basis. truth of the matter is, this is just going nowhere. we were supposed to finish in the q4 of this year. there should be some other ways to come together on this, but the truth is, we are really out of bullets. caroline: very quickly, just one minute, the court's ruling on the privacy case involving facebook tomorrow. how do you think this will determine data transfer, and do you worry that america will feel

it is unfairly targeted by europe? sense thatclearly a all of that is being an aggressive move against the u.s. but i think that both europe and the u.s. are losing from this tax planning. there is something for everybody to gain. so i would hope that the u.s. was on the same side. caroline: great to have some time with you today. we appreciate it. universityhoward taps the bond markets. we will discuss the move and why many historically black colleges continue to lose out. the bond market, but social unrest and bringing students back to university. this is bloomberg. ♪

romaine: howard university in the u.s. became the first historically black college to join the borrowing that swept the u.s. market. the schools received four times as many orders as were available, indicating demand for hbc you to tap the market as a national conversation about equality continues. joining us is the president of howard university, dr. wayne frederick. want to start off talking about the bond sale. it drew attention not only from investors but from a lot of observers and it raised the question about the ability of hbc you to raise money through

financial markets and to top more of the cash cushion given some of the uncertainty with regards to higher education when everyone is going to be coming back to school. why do you think howard university was able to draw so much interest from investors for this particular bond sale? dr. frederick: a couple of things. i think because we were doing a refinancing, people had a chance to see us perform over time in terms -- i think also, our recent results including our ability to raise philanthropic funds as well as our operational performance as we have launched a strategic plan. from a grand awareness point of view, we have set the bar making sure [indiscernible] the fact that we send more african-americans to medical school as an example is just one

of the calling cards i think people see. i am happy. we certainly think the other fundamentals of what people want to see in the market in terms of good management, seeing a way forward and what we are doing strategically, i think are all fundamental things that are necessary in spite of anything else people maybe looking at. caroline: i am interested in how the finances are going in terms of howard university and that -- and at this moment where we have heard you talk about a generous grant from bank of america to help and free covid testing. how has this sudden -- are you seeing more interest? talk about the ceo of netflix target money toward historic black universities and colleges. is that something you are seeing? dr. frederick: that is something we have been seeing.

we also had a wife and husband gifte give us a $4 million towards our program. giftsf the five largest in our history. a lot of -- because of the fundamentals these investors are , -- [indiscernible] undergraduatehe degrees awarded to african-americans in this country. people see the value. how are you thinking about the reopening process in the fall, bringing students back? how that impacts enrollment for example. dr. frederick: we are looking at that very carefully. health and safety is going to be key. we cannot bring everyone back.

not everyone wants to come back . there are people with high risk who certainly do not want to come back. there are people who are going to have other issues. the coronavirus pandemic has affected their home lives in such a way that they may not want to come back. what we are seeing thus far is solid enrollment. we have very committed students. they want to get to the finish line. they recognize one of the best solutions for everything taking place in our country over the last three months is matriculation. they are committed to that. we are looking closely at their ability to finance their education and make sure they can support their ability to do that financing. so far, enrollment has been robust. romaine: you lead a university. a predominantly black university.

university that was created out of a necessity for black students to have their own space. you go back to the 1860's, the freeman's bureau. here we go in 2020, george floyd, black lives matter protests and a lot of concerns about racial justice and racial inclusion. how does your university fit into that? how are you handling the interest that some students have in your university as opposed to what they might have had six month ago and what are you doing to make sure those students are going to be able to thrive in a world that at times can be hostile to them? mentioned,ck: as you that necessity unfortunately is still here today in 2020. we are on a long journey to justice. 1867ve been since march 2, when howard was chartered. that journey is not going to end

anytime soon. it is great that more people have joined the caravan. we also recognize there have been moments have happened and people have left the caravan. howard university is not going to go anywhere with respect to this journey. we are still going to be here. we are thankful for the people who have joined the caravan as of late and seem to be willing to go the distance. we carry on the journey regardless of who has joined the caravan. for the young people who are opportunity is your to become the change. our motto is truth and service. you do not come to howard to get a degree. you come to get an education. that education becomes alive and well when you go out and change the water around you. that is what we are preparing them for. they are in an environment where we push them academically. it is a rough academic environment. we also make sure they are

confident in who they are, what their principles are and where their moral compass must point. it must point towards justice. caroline: i wish we had more time. i urge our viewers to go to howard university's website and read some of the heartfelt statements you have made and how you are looking to educate your students you help mentor through your university. thank you so much. now, let's get the first word. reporting, have been supreme court justice has left the hospital and is doing well at home. she was hospitalized for a possible infection earlier this week. . the 87-year-old liberal is a four time cancer survivor. justice ginsburg was appointed in 1993. the trump administration is distancing itself from a senior advisor's critique of infectious diseases chief dr. anthony fauci. trade advisor peter navarro wrote an article for the usa today saying dr. fauci has

regularly been wrong. the white house says the article did not go through the regular clearance processes and is solely peter navarro's opinion. is in criticized dr. fauci -- president has criticized dr. fauci. and other time-honored tradition is being shelved because of the virus. the tournament of roses association announced the 21 rose parade has been canceled. it is citing the impact of the virus on long-range planning for the new year's day tradition. the event has only been canceled three times since its inception in 1891. a judge halted what would have been the federal government's second execution of a prisoner in his many days after a -- in as many days after a hiatus. foundington, d.c. judge him to be suffering from dementia and prohibited his death. yesterday, daniel lewis lee was executed in indiana after an

11th hour legal bid failed. a court fight over a european commission over whether it must pay ireland in taxes. the commission ruled in 2016 the tech giant had benefited from illegal state aid in the form of tax rulings from the irish government. >> irrespective of this legal judgment, there is a fundamental question about tax fairness. how it can be considered fair if one of the globe's largest companies was able to pay at europeanax on its profits and substantially less than 1%. pleasedple said it was with the decision, arguing the case is not about how much tax it pays but about -- but in what country. global news, 24 hours a day, on

air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg.

>> i think it will ultimately take some sort of severe setback, a surge in defaults. that is one way to get it done. to default. i would like to remind people that the strongest economic expansion on the record was between 1933 and 1936. but yet, we never recovered back to the levels of 1929. ultimately, there is a second

setback. that is what we resulted in what we call the great depression. this artificial stimulus being created by the government, by monetary policy in the near term is lifting asset prices. when you look at main street, when you look at small businesses, these are where the majority of american jobs reside. the real economy is not improving at a pace that would or a cashcontinuation flow that could support these companies. whether that is tomorrow that the chickens come home to raised or it is three years from now -- come home to roost, or it is three years to from now, the day of reckoning will come. monetary policy will remain loose enough to continue to draw risk assets higher. it is probably for people who

are looking to maximize returns, the best thing is to remain long at this point. >> when it comes to the real economy and preparing for the wave of defaults, we have heard from banks who have set aside a combined $20 million. i want to get your read on these provisions. are these carefully considered amounts are they stabs in the dark? >> i think they are stabs in the dark. quarter,d of the first when we had pretty good visibility at the end of march as to how severe the downturn was, the banks did not take high research at all -- hi reserves at all. they are taking a lot of reserves. that is telling me they are behind the curve and they are in a game of catch-up. i do not think the reserving occurred in the second quarter

-- the reserving that occurred in the second quarter is adequate. we will see lots of loan loss provisions going forward. >> we may have surpassed numbers seen in the financial crisis. you have the trading operations, which have done very well. one analyst called the earnings to go to, almost indecent -- earnings too good and could create political backlash. >> in this environment, that is a very real risk. the banks have targets on their backs for the financial crisis. they are constantly being identified as the winners every time we have a bailout. easy monetary policy. the bond purchase program, which is stimulating a huge amount of demand. extraordinaryg in

trading profits. opportunities with the financial institutions are a target, especially by certain members of congress. some of the more liberal members. there ishe reality is going to be a backlash from the banks that especially if there is a democratic administration that comes to power. caroline: that was scott -- romaine: that was scott minard speaking with scarlet fu. let's get over to abigail to little. abigail: thanks so much. fromng us today is ari oppenheimer. we love your perspective. usually pretty bullish. so much discussion today. including the rotation we are seeing. a little bit of the reopening rotation versus the stay-at-home

following. before we do that, because you are typically bullish, after all of the volatility we have had, what is your target for the s&p 500 at the end of the year? you think will be higher or lower? ari: we think we will be higher. we come into the year, we set a target. we do not change it. we see how we do at the end of the year. we came in to 2020 expecting 3600. it was not good in the first quarter. looking a little bit better right now. we think weekend still get it. abigail: talk to us about what you like in terms of the internals you think we are basing and also around high data trade. clients,ing to ,peaking first on internal concentrated market performance remains a lingering concern. how we see it, the participation

levels are consistent where they should be less than four months after a major low. the charter i am showing you shows the percentage of nyse stocks come off a reading of 3%, which is the lowest since the depths of the great financial crisis in march of 2009. this leads us to believe internals are basing instead of topping. we think positioned to expand through the balance of the year. abigail: there is the chart you were mentioning. that is the 200 day moving average. the members above it relative to the s&p 500. it has been a very difficult year. on the other hand, it could be much worse. is there anything else you would like to comment on on that chart? one, if you look at value, you look at small caps,

you look at europe, it is these areas that are basing. that gets into my second chart here. the recent action this week, it is not about this rotation. it is about broadening re-rating -- in a and a re-rating of high beta cyclicals while growth pauses following a terrific run. sergeant --ahead, go ahead, sorry. ari: what i'm showing with the yellow line is high beta versus low volatility. it topped in 2018, bottomed in 2020. it is now turning higher again. i overlaid it with the nasdaq 100 to show that recent action has not grown. the nasdaq has paused through this. tech has outperformed more than any other sector six months after a major low going back to

1932. historically speaking, there is no better early cycle or -- better early cycle idea than buying technology. abigail: you are a fan of technology. last fall when you joined at a time when we were seeing what felt like a rotation out of growth into value. you made the case there that you are making now that it is not a rotation out of growth. growth is causing as value is catching up. perhaps a nice buying opportunity if the pause continues. amazon down for a third day in a row. the longest moving straight since the end of may. will be interesting to check back in on your views the next time you join us. thanks for your thoughts today. from new york, this is bloomberg. ♪

>> i am supportive of government acting in the air of a crisis. we should make no bones about it these types of interventions -- because of the pandemic. romaine: welcome back. long speculated.

spinoffloit a potential of 81% of its ownership. it would not occur prior to september 2021. it has been long speculated. there appears to be long confirmation it is in motion. some other news crossing the wire. quite a few folks on twitter have been hacked including elon musk as well as bill gates. caroline: elon musk has been hacked twice it would seem. same bitcoino, the hack seems to have a card. -- it does not even make sense, the tweet. it is offering to make bitcoin payments. he sent $1000 to one payment. elon musk, bill gates. apple seems to be playing up. twitter falling after hours.

joe, you are the resident crypto expert. >> it is striking because people get hacked on twitter from time to time. crypto hackers like to do this kind of stuff. this might be an actual hack out of the accounts but in some way of twitter itself. a lot of these accounts seem likely to have had some sort of dual factor authentication. somewhere, it might be on twitter's side. do not send your bitcoin to random accounts even if it is elon musk or bill gates. please, people. taylor: great investing in vice, joe -- investing advice, joe. joe: that is not usually my job, at i give that advice. taylor: it was interesting. cloud flare had flagged this is a fishing site. it looked like it did come to oo late. some of these had the two type

authentication to prevent some of these. what do you make of any potential fallout for this? oe: they could have done much worse in theory. they could have done something less obvious other than a blatant crypto scam. they could have said something really dangerous or stock-price moving, especially if it is elon. everyone would have believed it if they had tweeted literally anything else. romaine: better yet, they should have announced the new spack or something. joe: literally anything else, people would have believed. that is the crazy thing. caroline: for now, the after-hours move in twitter does seem to be limited. you were mentioning how twitter had been trading up quite a lot of the day. this is not causing any real flight from this stock. romaine: twitter shares had been on a good uptrend over the past

few weeks. will be interesting to see if there is any fallout. we will have to find out what the source of the hack is. if it is on twitter's end, how they might address it. caroline: and what it means for the reputation of crypto. even though it is not of crypto's making, it does seem to tarnish it in terms of its reliability when the tax due occur -- when these packs occur. taylor: last year when i was in san francisco, analysts were increasingly bearish on twitter because they had underinvested their expenses. at a time when facebook was ramping of their expenses and security. it is interesting to see twitter if they have invested enough as analysts had wanted. caroline: it the moment, they going for big handled. joe, be careful.

make sure your twitter handle does not get taken over. stay safe. that is all for wind you miss -- for what'd you miss?. taylor: and stay tuned for bloomberg technology here in the u.s. romaine: this is bloomberg. ♪

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for kids at home- all on xfinity x1. we're committed to helping all families stay connected. learn more at xfinity.com/education. >> welcome to bloomberg technology. u.s. stocks surging at the open but having a volatile day once again. there are some signs of hope positive vaccine development but new outbreaks continue to flare up across the united states and asia. this as tensions continue to rise between the united states and china. we are told president trump