is going to slow down. >> there is a short-term effect when money goes free. capital goes looking for the best growth. >> the dollar is weakening, the rest of the world is recovering because it has done a better job. >> the world is dividing into inflation is and deflation nests. >> bond investors are sleeping on a dynamite pillow. is "bloomberg: surveillance," with tom keene and lisa abramowicz. >> good morning. this is "bloomberg: surveillance." lisaside tom keene and brevets, i am jonathan ferro. good morning new york. a beautiful morning in london. is a busy one with the mande very much front and center as we start a new trading week. tom: it is free money. we are going to talk to bill

about financial repression. this has been widely predicted by a lot of people, deals have to be made. revenue isn't there, so you've got to go out and buy it. >> you got to get better. -- bigger. athave not confirmed it here bloomberg, bob but that is a story tom: -- nine tom: what's john, lisa and i do is we go to bloomberg experts on this. john farrell, jonathan tice said exactly the same thing. yeah right, but there are all sorts of reasons why that combination could be the giant bank of the continent of europe. ritika: a lot jonathan:jonathan: -- a lot to get through including lisa getting excited about tiktok. [laughter] we know lisa does tiktok often with the kids. you've got a decent excuse. lisa: it is a verb. do you tiktok or not tiktok?

politics front and center today. including tiktok and oracle being the likely bidder. we now are talking about brexit. boris johnson putting his controversial brexit vote to a vote. we will hear about whether or not he will get immunity if you go against the agreement he had previously agreed upon with european leaders. president trump and former vice president joe biden speaking about wildfires. president trump in california. the u.s. house subcommittee is holding a sub committee -- a hearing on mail-in voting's a point of contention as we gear up toward the u.s. presidential election. --ant to congratulate my fed my fellow gunners on a win over the weekend. tom: low -- while. -- top page ofs

"bloomberg," [indiscernible] tom: john, who are the gunners? is that liverpool? jonathan: no, this is a north london rivalry on either side of the pitch. for our audience on radio, lisa abramovitz with an arsenal scarf. if you live in north london, you've got two choices. isrs, or the tops, or it arsenal. tom keene -- some people may say she was a glorious supporter. i am not surprised commission gets to wind you up on a weekly basis. derby? it we can go to derby, john. the three of us in london when this pandemic is over, on bloomberg radio and television,

it is a no-brainer. we go to the north london derby, right? lisa: [laughter] jonathan: just because you support -- joining us now jared woodward. fantastic to catch up with you. i think you will notice pop for all of us. value is dead. his value dead? >> the classic style of value we know is dead. we look at value versus growth, this has been the worst performance ever. u.s. value versus gross and you can't find a ten-year period in which value has lagged worse than this. this is worth than the dot-com bubble, any other period. the pandemic has only made things worse. tom: value versus growth, it is about a rate of change and the view forward. where on the income statement you -- or do you go to total

enterprise value? what ratio is how you gauge value's future versus growth future? >> we look to the classic book value measure. book value, people don't realize if you take out liability, you've got a lot but you leave a lot of important things out. 84% of s&p 500 company assets are actually intangible. intangibles don't show up in most classic definitions of value. is a big we did, this help to bargain hunters, if you add intangibles, you can approve the returns -- improve the returns by 260 basis points a year. lisa: i understand the theoretical argument for value, it has made sense for a long time and has been wrong for a long time. what is the catalyst for it being right this time? >> big picture, we came up with a model.

that macro variables explain about 80% of the value versus growth returns we have seen lately. i will tell you what they are, 10 year yields, business cycle, we proxy that with the ism p, and inflation expectations. recover losses that has incurred this year, for example, we would see 10-year treasury yield's get back to 1.48%. it would have to see inflation get back up to 2.5%. there is the whole that macro conditions have put value investors in. i think we need to see a complete change in the macroenvironment. tom: a complete change is fine, how does tech fit in? do you look at the major tech that has been driving us, one of them in the news today, are they growth or value? >> most are still intuitively growth. on a classic measure, they will screen that way. intangibles,e

things like patents and trademarks are not worth zero dollars. they are assets. some of those names, microsoft for example, can show up as having more value then people typically assume. in one real sense, this is all one trade. whether it is value versus growth, small-cap versus large, u.s. versus the rest the world, you have increasingly seen, as growth expectations plunge, these payers become more correlated than ever before. lisa: everything is -- jonathan: everything is connected, let's build on it. slap bank going all the way back to the first of april. what are the conditions on the horizon you see that is going to drive the 10 year yield out of this race somehow? >> i think you've got the sense on the horizon that if yields didn't start to break out think fully, especially in the u.s., you get some sort of control but

then do something to present a disorder -- prevented disorderly rise. same time come a lot of investors are asking us about when stimulus this year will show up in expectations. we have written this in our reports, even if you see a vaccine full on recovery from the pandemic, optimal macro conditions, that just gets us back to where we were at the end of 2019 which was still an environment of secular stagnation and low growth inflation. aen that wouldn't justify breakout on our range of anti-value macro conditions. somethingu would need much more robust like an industrial policy in the west, whether a green new deal, some big fiscal measures would increase the bargaining power of labor and decreased the distribution of productivity gains. that is what will drive growth higher. francine: are you saying -- lisa: are you saying fundamental

?tart to work matter >> i am not sure, but it is certainly a moment for what happens on the policy front. i think it is going to matter more now between six and 12 months that it has in a long time. jonathan: great to catch up as always. jared woodward on value and the trade everyone is struggling to make over the last six months. rather, the last decade. it has not materialized, has it? lisa: the problem i am struggling with his technicals and options trading. who is playing in this market? who is driving this market? it is not robinhood good people are -- people are raising questions about -- people on the peripherals thriving on the action versus the people reading the books and getting it wrong again and again.

jonathan: looking at futures, a bit of a bath. we have to talk about tiktok. let's be a deal, clear, it is a proposed deal potentially between oracle and tiktok. what i find interesting is the prospect of a partnership between oracle and tiktok. reading this briefly, it looks like something the chinese would propose to a foreign company to gain access to mainland china. i think that is fascinating. after decades of expecting china to become more like the u.s., hoping the communist party would change, it looks like elements of u.s. business taking on chinese characteristics. tom: that may be true. i went back and looked because i'd forgotten the numbers. oracle needs to do something. larry ellison has done 9% per year shareholder return, akin to what cisco has done. in no way is see competing on a

shareholder basis with giants including microsoft. it would be something for oracle to get this done just to so some activity in the cloud and technology area. jonathan: you mentioned larry ellison, let's talk about that. u.s. has changed with this administration. your relationship between the president could be the deciding factor with whether this deal gets done. that is not my personal view come i think that is the view of a lot of people and i think it is the argument they will make this morning. is oracle close enough to the ministration to make this happen -- is oracle close enough to the administration to make this happen? tom: i don't think i agree with that. art navarro's can i think where are the auger rhythms. -- that nothing in the suggests the algorithms are coming to the u.s.. jonathan: peter navarro is not going to be the deciding factor.

executive order, this will come down. tom: strange. jonathan: i think we all feel like it is strange. tom: december 5. the derby. arsenal. [laughter] december 5. jonathan: i am jonathan ferro, good morning to you. this is "bloomberg surveillance." ♪ abandonedktok has talks with microsoft to sell its music video app in the u.s.. bloomberg has learned it now favors a partnership with oracle. a deal with tiktok's chinese parents and oracle would look more like a corporate restructuring than an outright sale. president trump has threatened to ban tiktok if its u.s. operations are not solved. amazon is hiring 100,000 people in the u.s. and canada. the jobs are full and part-time

and pay $15 an hour. workers will get sign-on bonuses of up to $1000 in certain cities. amazon has managed to open an hundred operations building this month. the death toll has had 35 and west coast wildfires that are burning from california to washington state. thousands of homes and other buildings have been destroyed. tens of thousands. -- tens of thousands of people have fled their homes. firefighters could have another problem, the forecast calls for lloyd most are anti-wind. minister the new prime yoshihide suga was elected leader of the liberal democratic party. the party will use its majority sugarliament to install as prime minister monday. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta.

this is bloomberg. ♪

♪ trump: i have spent the last four years bringing jobs back to america, securing our

borders, rebuilding our military and standing up to china. nobody has ever stood up to china like we have stood up to china. you have not seen the last of it. jonathan: that is the campaign pitch from the president going into an election less than two months away. equity futures shaping up as follows. the500, two hours away from opening bell, futures positive. 1.23% after two weeks of losses. last week, european outperformance we can talk about later. --market, the euro during the euro doing nicely. even with pushback in the president. the bond market unchanged. in the middle of that, your 10 year-year-old -- 10 year yield. tom: money is free.

let us the loop for all of this. every deal is different, i get that, but we are beginning to see the urgency that money is free. jonathan: money is free, not much growth, what do you do? you could almost go to the revenue line. you look at may be some strategic ideas like gilead and immuno-whatever it is. [laughter] tom: they are desperate to get -- i can't remember right now. the morning is an absolute blur. it is also a blur in the political space as well. kevin cirilli with rewarding brief, 49 days to the election our chief washington correspondent. i am going to be real direct, all of the notes this morning are pushing on florida and mr. biden's desperation for florida.

mr. bloomberg is going to pony up change to help mr. biden out. he is founder of bloomberg and this radio and tv property. describe what mr. biden needs to do in florida to compete and win. >> three words, miami-dade county. withl remember 2000 hanging chads, he has got to turn out the vote in those suburban districts cometh typically -- suburban districts typically leaning more catholic. for president trump, he has got to head in land. he has got to make sure the inland portion of the state between the highways, the gulf and the atlantic are going to be able to turn out for him. it is a turnout election in a swing state. should biden bank on election night -- should biden on election night suggest an elect oral advantage. other thing this

morning that i can't -- as a fossil, i can't say this enough. the first tuesday of november is so over because of mail-in voting. explain to us how this starts? each state is different. debate,where i find the the national discourse around this is focused around the u.s. postmaster general louis dejoy. postis not ben franklin's office, this is a completely different patchwork of regulations in terms of where things are going. each state has different regulations. some votes have to be marked by one date, versus other states, when they can count them, when they can't. it is nuanced. look at pennsylvania, folks are saying it could be a large legal battle in the selection.

the republican-controlled legislature there is trying to move through legislation that would wiggle some of the dates. i bring this up because how the ballots are counted is going to be contested in the drum up of the election. jonathan: let's go one step further and marry wall street with washington. almost exclusively the conversations i am having with people in the investment community are thinking about no election result november 4. what does that conversation sound like in washington? >> senator marco rubio has got a piece of legislation he has introduced that says the electoral college -- they don't want to have the vote until january 2. pull out your constitution, the constitution requires when the inauguration will be. deciden, congress can the date of the electoral

college about. tom: john can pull up the constitution, the british don't have one. [laughter] lisa: harsh. jonathan: i am not sure he was referring to the british constitution anyway, don't worry. [laughter] >> didn't we have a war over that? lisa: we did. [laughter] the wall street zeitgeist right now, i want to get euro cents from washington about the oracle deal. tom: good question. lisa: oracle is the leader for this tiktok bid in a comes after the founder is the only big tech executive who has put his weight behind president trump in a meaningful way, how helpful is this? >> i think you put it out well right there. in terms of the expectations and to the belt way, the expectation was microsoft had the upper hand.

this tiktok deal, the precedent it has set for the longer term is where things get more interesting. the stateticipate department to have additional comments this week not just pertaining to take talk at the door brought -- the broader strategy pompeo's trying to lay out. as for oracle, there will no doubt be questions to how democrats have raised questions about kodak in the next 24-48 hours. jonathan: do think the relationship with the president matters here? i think all relationships matter in terms of the c-suite. bottom line is that this is a significant shift in terms of what the drumbeat of the media has been saying about a potential delay of that september 15 deadline. the president said no way, that

deadline is precisely what he had dug in on. now it is oracle saying they are going to have this deal. that coincides with the original deadline. there was pressure coming from the tech some extent community, and he said no way, september 15 is the deadline. jonathan: that's tomorrow. great to catch up. historyou bring up the between our two countries, the u.s. and the u.k.? i have always found it strange how obsessed you are with monarchy and how i am not at all. tom: i think it has to do with going over to london either december 5 or march 13. maybe the pandemic will be over and we can do "surveillance" at the derby. lisa: that is a punt. [laughter] jonathan: i will see you there,

tom. are you going to pay for this? tom: no. jonathan: shocking. tom: futures live. jonathan: this is bloomberg. ♪ look here, it's your very own all-in-one

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this is "bloomberg surveillance." two hours away from the opening bell. equity futures doing ok. the fx market, approaching 119. treasuries staring down a fed decision. that is the story. we have had a shift in the reaction function. it is about how they implement it. tom: look at the headlines. delta airlines will not take another government loan.

i don't get it. they are down 80% international. industry that needs financial assistance to get to the other side. they don't want a bailout. many companies do not. what they want is to get planes back in the sky and get people traveling again. they need to get the new york london corridor open again. they need to sort the testing out at the airports to get those corridor doors functioning -- those core doors rridors open. to do that, you need testing at the airports. i have not seen that in a big way. hugely beleaguered.

there is much more to the economy. joining us, francis mcdonald. -- frances donald. and outlier?nes can you see economic growth slowing into the end of the year? >> the momentum can stall. is an interesting recovery because you can take a sector and make a story out of it or take sectors that are doing well . a kre going to end up with shaped recovery. tom: here we go. to dolines are going really poorly, manufacturing is going to do well. on, theyhave analysts

can make a story out of it. tom: there is a new alphabet out there. haped recovery. talking about the airlines is emblematic of employees. they are planning on doing another round, hundreds of thousands of layoffs. this is probably why they don't want a bailout, they don't want the strings attached. >> we are using one sector to underlie the surface. had 80% of those who were

initially laid off, told your job loss is temporary. that number is falling quickly. forave americans filing unemployment. those are not temporary. told the job loss would be temporary may become permanent, because we have fewer unemployed now, the composition is much less healthy now than it was in april. we have to move away from that headline figure, pay attention to the quality underlying the surface. didthan: capital economics a nice job on this. it is not about the recovery. it is about the permanent changes of this economy and the permanent shifts we are missing. is a challenge.

there is another side to covid. we don't know when and what unlocks it. reduction in the fatality rate. what do you do? you have to focus on the long-term trend. focus onl be those who the long-term changes. what fundamentally changed here is we are going to have ace bottom interest rates -- base bottom interest rates, large government deficits and we have entered this paradigm where the government issues a bond and a central bank buys it. these are the structural trends that have affected our financial system. what starts addressing the way i am thinking about my portfolio is what do we do when government

bonds are giving us a negative return? predicting negative interest rates because of the structural challenges? >> not in the united states. 20% of the government bond universe. class that hast lost a huge amount of appeal. are going to see big flows into asset classes and more into emerging markets. we have to put the money somewhere. >> you are talking about how the labor market looks less healthy now.

>> we talk about this disconnect between the economy and the stock market. it is a simplistic way to highlight manufacturing is doing fine. they do not have to operate with social distancing. that is critical. manufacturing is 10% of the marketingut 50% of s&p. jobs, services are less in the stock market. this recovery becomes a fundamental investment and explains some, not all of the disconnect. aboutan: it is not whether fundamentals matter or not, it is about how they matter

and how they matter for central bank. 20 years ago, the story has always been when things get bad, .ou cut rates how are you thinking about this shift at the fed. i think about fiscal policy. forecasts, ite but i don'te -- have high rates between the 10 year. we have known for a long time monetary policy is a blunt

instrument. commenting on central banks, that is the old world. the new world is how will it target sectors that need help. tom: amazon with 100,000 jobs today. it is probably a greater percent of the cardboard box force. do in your new world? than taxmatter more hikes or tax cuts. if we get this composition of government, we are going to talk differently about health care. are we getting a minimum wage of $15? we will see higher corporate , but we are going

to have a focus on redistributive policies. they are going to be fighting against each other. i am in a moderate inflation camp. wages will move up moderately. we have to think about how we get there in a different way than we have. where weorld is one are going to be looking for more manual changes. jonathan: great to catch up. frances donald there. and sees weaker oil outlook shale recovers. it is dicey out there. co, saying perhaps we have seen peak oil demand. that is the conversation.

this gives you an idea of where the consensus is. texas, 37.26. brent crude under 40. 39.83 on brent crude. jonathan: is that the clean trade of the year for you? because ofdistorted central banks. tom: in my time, i have never seen hydrocarbon so discrete. to see oil so discrete and alone is interesting. the pricelet's get to action as we count you down to the opening bell. you are listening to "bloomberg surveillance." the equity market, we are doing more than ok. 41 on the s&p 500. .e continue the conversation

that conversation is up next. ♪ out microsoftbeat in the battle for tiktok. they have abandoned talks with microsoft and favors a deal with oracle that will look like a corporate restructuring than an outright sale. trump has threatened to ban tiktok if its u.s. operations aren't sold. tropical storm sally is taking aim at new orleans. it could turn into a hurricane and is likely to make landfall tomorrow morning. that would be the second hurricane to hit louisiana in a month.

trump held his first indoor rally in almost three months. nevada regulations that bar large gatherings. opec-plus coalition meets to consider what they can do to rescue the oil market in the midst of a pandemic. seeingtel and allies are the recovery. a short seller report was trying to manipulate the market and provide a false impression to investors. it came after the announcement .f -- partnership 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. this is bloomberg. ♪

how do you handle american technologies and chinese technologies?

decoupling.ord there is a sense of separation and technology. there are going to have to be walls. the much more important issue between the united states and china. your price action. we count you down. equities with a lift. we are up by 1.2%. the big thing for me last week was not how tech broke down, it techat happened because broke down. every seconde we have.

to talk about china, toktik and all that. is them -- is this the mother of all opportunities? >> we have a rereading in tech. i still view it at 25% higher over the next six to nine months. jonathan: when you say that to 25% higher, what do they say? whichost questions are are the names, who in software do you own? two-one ratio.

jonathan: deutsche bank asked this question, so let me ask you. the distinction between the tech revolution and a bubble. bubble. it was all about things that might happen in the stocks, massively overinflated with no possible business models. the most transformational tech scenes i have seen through the cloud, 5g, cybersecurity and others. sector is here and on the horizon. it is not on the comments of hope. that is the difference and why this continues to be a paradigm

change. i don't view the last week or two as the end or sign of a bubble. >> people would agree with you. what multiples make sense? how high can we go at this point? of: that is where a lot these names have to view it as sum of the parts, as well as what it looks like in the next 12 to 18 months. these growth stories have been accelerated one to two years, sometimes two to three. when you look at --, the strong are getting stronger. we go into earnings, that is going to be another catalyst higher. tom: this is important. cisco and oracle are tech

not.nies, but they are they are hardware companies. perceive loris ellisonid -- lawrence wants to be like the other guys? oracle, this is an opportunity for them from a tiktok perspective to partner and get in the game and get in the conversation. i view this as a massive head scratcher in torah -- in terms .f oracle up more thanres 9%. isn't this the kind of activity that would point at some of the things you are rejecting? people don't understand it, don't understand what kind of deal this is, and yet, buy

oracle. of it is is an example if it getstcher and approval by the white house and this is not just all noise. through the noise and look at the fundamental drivers. you look at apple, it is a 5g super cycle. that is why you own that name. others might -- we saw that was slack. you have to look at the individual stories. you mentioned apple. of you talk about the middle march, when you dropped your price target, but maintained the outperform rating. i want to give you a victory lap for that. , thee decided that was it

bull market was open. you stuck with it with the big tech names. what was the lesson? is it was about the install base and seeing the forest through the trees and understanding this was a panic selloff. if you stuck to the fundamental would --the stock further up. when you look at apple, over the last five or six years, many times they were dead from a growth perspective but have come back. that is why the haters will hate, but it creates the opportunity. up to 52% on the year. fantastic to catch up with you. we talked about this, the amount of times people have said apple is dead. inhired -- we heard it again

march. tom: it is interesting to watch. earlier from jared bank of america, this presumed shift from growth of value is occurring. it is slow. you wonder -- is it a relative or absolute change? i am fascinated by the dominance of tech. jonathan: i had a conversation about whether the vaccine would be kryptonite for the tech stocks, growth stocks in america. i am not sure we can agree on that. >> people don't understand if the work from home trend will continue. i know tom is experiencing this and i am. the demand for screens and air pods is not going away. this is the reality. jonathan: there is a difference between your household and tom's

household. tom'sdividuals in's household are deliberately destroying their screen so tom goes out and buys new ones. ♪ - [announcer] imagine having fuller, thicker,

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for a natural, effortless look. call in the next five minutes and when you buy 500 strands, you get 500 strands free. call right now. (upbeat music) ♪ >> we are in a recovery. recovery is about to slow down. >> a warm return is not looking good. >> capital goes looking for the best growth storm. restllar is weakening, the of the world is recovering faster. the dynamite is inflation. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. tom: