scott minerd says the rally should go to the federal reserve, but the partner at guggenheim partners wars there still a great deal of uncertainty. scott: it does not matter which piece of data you look at, there is still a very high level of uncertainty, especially as we reopened the economy. some in 19 states now are covid,ncing spikes in and those are mostly the states that open first, so i think they , be subject pause to a lot of uncertainty right now, at this point, and there is only so much the fed can do through the operation of monetary policy to address the issues other than to make sure the markets are liquid, and that termbasically maintain a structure of interest rates low enough that it does not interfere with something like mortgage rates, which would damage the housing market. scott minerd, tom keene in new york, good morning to you. you wereutely dead on in february on the decline, you called it "the ludicrous season." it has now become a ludicrous 2020 with this huge and abrupt recovery we have seen. can you give chairman powell all the credit for this 44% move up in

manus: scott minerd, co-founder of guggenheim. ott scott with hsbc, steven, scott minerd said the fed is not done in terms of credit and yet to buy any investment grade credit. you say the fed is reducing the risks but you already shifted and turned neutral on investment grade from mildly bearish and you turn mildly bayish on high yield -- bayish on high yield from bayish. so you are shifting your consideration here. how much more do you want to be in i.g. versus high yield and how much more compression on those spreads can come? steven: yeah. we have been creeping up the weighting toward credit. inside the credit call, about how we take duration. and we want to take high quality duration. i think one of the problems with credit is that you can't just go all in and buy anything. and in fact those that have just gone and chased the high yield would have suffered quite a bit recently. it's important to be very selective. i get the idea that low for longer and low volatility is good for credit. but it's not a simple case of just buyin

we will discuss the state of the markets with scott minerd. we will discuss the ramifications of the fed programs unveiled to support the economy. later this hour, we will be the global head of strategy from b.n.p. paribas. he details the next cycle and what it means. we are halfway through the trading day. kaylee is here to join us with more. prettyas been a incredible rally. we are continuing to climb, despite the fact we have unrest all across the u.s. unprecedented unemployment. we are continuing to see that sickle -- cyclical tilt. the financials, industrials leading the way higher that is part of this rate sensitivity narrative. we are seeing yields move higher. the 10 year up about eight basis points. that gives a boon to the financials, which are up by 4%. stocks whichity are only higher by about 1.4%. underperforming. i want to talk about the reopening narrative, how that seems to be the only thing the market is focused on. you are seeing that layout in multiproperty -- small property stocks. yes, the data still not looking good. val

still ahead, scott minerd warne there were more bubbles to come. we'll see if this is the start of a larger down turn. a quick check on bonds as we've been talking about, bonds are in demand. the safe haven trade is in demand ten year yield, .65% we're seeing the lowest levels there since early june two year note yield though remains bate higher. we'll be right back on "closing bell." >>> let's have a check on the markets. the s&p 500 is down 8% this is set to be the fourth worse points decline ever. that stands at 6.8% now. nasdaq down 5% all of the sectors are lower the best performer, staples, down 3.6%. energy, financials, materials, all down 8% or more. let's have a look at individual market movers. starbucks is sliding the current sales trend remain challenge and believe near term upside is limited. grub hub bucking the broader trend. that stock rising on merger plans with just eat. the deal valued grub hub at $7.3 billion in equity it's up 4.6% or so uber suffering today because of missing out on that deal >>> yeah and the overall market, to

that was scott minerd there.ext, as protests u.s., majoross the companies are speaking up and positioning their brands but the responses not only -- the response has not always been positive. this is bloomberg. ♪ karina: this is "daybreak: asia." the federal reserve is pledging to maintain its current pace with debt purchases and sees interest rates near zero through 2022.st chairman jay powell is committing to using all the right tools to help the u.s. economy recover from the virus. the fomc said it would increase its holdings of treasury and mortgage-backed securities assist dana functioning in the market. china is buying soybeans from the u.s., despite tensions with washington over the coronavirus and the future of hong kong. sources say state and private organizations bought at least 10 cargoes this month with three in the last way for hours. there are fears that worsening relations could hurt the phase one trade deals. but a leading traders is the deal remains on track. a second wave of coronavirus cases is

taylor: we have scott minerd on the program before the fed announcement and talked about the fed achievingoals and driving the credit spreads further lower. do you see financial conditions, credit spreads where the threat -- the fed wants them to be to make sure those markets are working? is where theythat should get lots of credit. all of their action so far post covid has eased financial conditions a lot. lending facilities could tighten credit spreads, asset purchases made sure the treasury market and mortgage markets came back into a liquid state. they had been doing exactly what they need to do. i think they have asymmetric risks. we learned inflation is stubborn and it is unlikely you will do too much in the way of stimulus and end up with runaway inflation. they could have done more inside of coming up short. that did comehing up briefly one the idea of inequalities we are seeing, that we saw prior to covid-19 in the economy with regard to unemployment and wage is an been that -- how that has exacerbated now. in regards to what the fed can do about that and the idea of keeping their

efforts to stabilize the economy may encourage companies to take on too much risk, according to scott minerd more of what he had to say. >> we already were at record levels of debt on a number of corporations, when we got into january of this year. one of my concerns was that when we have an economic downturn, this highly levered economy of ours was going to lead to more severe pressures on the economy than we would normally have. now, the federal reserve has basically eliminated the downside in corporate debt. they sent the world a bicycle. we are now putting on record amounts of corporate debt. the leverage situation is even getting more exacerbated. ultimately, the fed is going to find itself in a position where it tries to phase out these programs of support for corporate debt, it will be a lot like what happened back in 2013 when ben bernanke first talked about ending quantitative easing. there was a tantrum. fed quite likely that the will face that day of reckoning when it tries to slow down asset purchases of corporate debt. the market will then challenge the fed to find out where the

scott minerd will be with us. has beenor extremely cautious on the markets.y stern will be with us. in my estimation, by far the most underrated of the fed president. alan blinder with us and diane swonk as well. pulse onnk with that the midwest economy at grant thorton will be a timely conversation. at neubergeris berman group, a really interesting shop in new york. yes, they manage money, but they have a certain panache to it, certain style. we are still waiting for joseph amato's hit movie. it is out there somewhere. he drives forward equity coverage for newberger berman -- uberger berman. momentum and value. who is going to win out going forward? does momentum keep momenting or does value catch up? joseph: good morning. good to be with you this morning. it has certainly been a pretty amazing contrast over the course of the last couple of months between quality growth and momentum versus cyclicals. least, since this crisis has occurred, quality and momentum have won out in a huge way. it is extraordinary that nasdaq is a double digits -- is up double digit

we had scott minerd speaking to investors this morning. he will be on the program later today.id there is excessive leverage. i wonder whether you think banks and investors will start to take that into account when they are investing in future situations? will there be some sort of cap on leverage? richard: there will definitely are going to be financed at lower leveraged levels than anything we saw being financed in 2018/2019. important, a as lot of the covenant protections that had eroded during those strong market positions in 2018 and 2019 will not be there. new lbo's will have to have a larger equity component and there will have to be a more lender friendly document as opposed to borrower friendly document. i think that will still be the case. the fact thats equity markets have sold off some, there is a reduced valuation, therefore reduced purchase price, still makes a number of these lbo's attractive to these firms. i think the answer to that is yes, but it will be on a case-by-case basis. alix: does the 2020 election change that? it feels like the last couple of electio

scott minerd saying he is favoring gold as the fed needs of finance the deficit in the u.s.xceeding into the dollars decline. taylor: we pushed forward into that fomc meeting. sophie kamaruddin there. the bull run and stocks is forcing some of the most successful investors to admit defeat. hedge fund manager said he was far too cautious during the market gains. "i missed a great opportunity here. won't be the last time." he said the risk reward calculation for equities was the worst he had seen in his career. still on the bullish side is the senior portfolio manager for wells fargo asset management and he joins us now from newton, massachusetts. are you fully in the camp this is a bull market instead of a really big bear market rally? >> yes, i think it is the beginning of a bull market rally. you can't underestimate the effect of what the fed did, pouring trillions of dollars of liquidity into the financial markets. one, it stabilize the real economy and you can see that by the recent unemployment numbers. two, it assures the companies will not go bankrupt during this compl

guggenheim's scott minerd will be joining us. plenty of former fed officials.r me apple is that formernt, former -- minneapolis fed president. the action starts at 2:00 in new york. alix: really looking forward to that, especially how they address inequality. workingll and the fed towards an about economic recovery. that is not happening. look at the protest pictures. i do not know how long they can avoid talking about that. it should be a fun day. in the meantime, before the fed meeting, check out david westin coming up next. "balance of power" on bloomberg television and radio. have a good wednesday. this is bloomberg. ♪ ♪ david: from new york to our tv and radio audiences worldwide, this is "balance of power" where the world of politics meets the world of business. we start today with the markets. it seems next. the nasdaq is coming back, the dow and the s&p not so much. kailey: you are seeing markets across asset classes on pause waiting for the federal reserve decision. are they going to continue to support asset prices in the way they have been? the other

we will discuss the state of the markets with scott minerd. ramifications of the fed programs unveiled to support the economy. later this hour, we will be the global head of strategy from b.n.p. paribas. he details the next cycle and what it means. we are halfway through the trading day. kaylee is here to join us with more. prettyas been a incredible rally. we are continuing to climb, despite the fact we have unrest l

cio scott minerd speaking. ftse shake-up is showing the impact of the crackdown.epair group, hope serve. easton. us is joe some of those main changes on the ftse 100 are a sign f the times reflecting how we're not able to travel and but wech fun anymore can certainly stay home in our houses. mentioned, you they are related to the clearly, mpact, jets.asy they have had huge declines in passenger numbers, and as ival jumping down well. probably one of the companies thate potentially longest of the recoveries because it's very difficult to enforce social istancing on a cruise ship kind of environment. analysts all across the board are very cautious on stocks. out, ther one dropping we mentioned, they are quite an ble related, in attempt to come out. and you mentioned everyone has more time at home, looking for things to do, and the one that's coming in is hope serve, which is company that provides emergency call-outs homes. inally, the other one is british gas, not so much a dropping outy, after 33 years. greater smaller on from rivals. after covid we've had these re

scott minerd is the cio of guggenheim investment.ing in gold could help offset any concern about the status of the u.s. dollar as the global reserve currency but close into gold etf's are showing signs of a halt after holdings hit a record at the end of may. mike bell, jpmorgan global asset strategist stays with us. what the fed does, it is the dollar, inflation expectations. given that, where do you see gold heading? small allocation to gold as a hedge makes sense at the moment because historically, there has been a relatively strong inverse correlation between u.s. 10 year real treasury yields and gold. obviously, real yields are pretty low at the moment, and how could you get real yields further into negative territory if normally, yields are constrained by some combination of qe and financial repression. stimulusyou get fiscal funded by that qe, which drives inflation higher in the medium-term. for that kind of fiscal stimulus that is successful in driving real yields further down would be supportive of gold. the challenge to gol

guggenheim'sfrom scott minerd saying the fed is facing a reckoning. shaking -- shaken to the core. we will discuss issues facing the energy market. plus, we hear from the former u.s. defense secretary. this is bloomberg. ♪ yvonne: just want to recap some lines from samsung. south korean prosecutors are seeking the arrest warrant for samsung's vice chairman of the company. capital lawolating and audit law. hearingover what we're is falsifying information in a testimony on 2015 merger. we have seen the samsung shares losing figures, but they are elevated up 1.3% right now. there is a whole: a company. a slump in chinese government is having a aggressive monetary easing. there has been a selloff with the yield on the 10 year near the highest since february. our next guest says the medium-term story is still in tact for chinese bonds. joining us is the portfolio manager. good to have you with us. waiver ofecord science making effort, but you say it remains intact. there -- is there a sense that the selloff is perhaps overdone? thank you for having me toda