Hi David, thanks for joining us today.

It's a real pleasure. It's good to see you. And I'm enjoying your waistcoat.

Yes. Well, this was a gift from our good friend, Mike Reed. And so, I thought I'd wear it for him. But he also refers to you as David “double 0” Riley. David “shaken, not stirred” Riley. I know when you did your appearance in Toronto at this conference a couple of years ago, you came to the stage with the 007 theme. So, what's this connection with you and James Bond?

Well, there's not much connection between me and James Bond, but I'm a bit of a fan so I thought it was an interesting thing to do as a Bond guy. It's very sad news that Sean Connery passed away because he defined the James Bond character. But he was also a very successful actor in other stuff, with an Oscar for best supporting actor in The Untouchables. So, sad to see him go but, you know, he'll be remembered. And yeah, I enjoyed using the Bond movies as a theme for the presentation to your events.

Which one's your favorite?

Well, my favorite Sean Connery is Goldfinger, because in there you have an evil genius — it's always an evil genius, of course. And the brilliant idea of the evil genius is that he's going to make the U.S. gold reserves radioactive. And the reason he's doing that is because he's loan gold. So this is a really kind of a bold piece of market manipulation in order to enhance his gold portfolio. So I just thought that was kind of fun. And it's a fun movie as well.

So, favorite actor, favorite movie series with an investment theme. Perfect! It makes absolute sense. Well, David, why don't we get into the serious topic of investments around the world. You in London and your colleagues have just gone into another lockdown in the U.K. and of course, we're seeing a huge wave of COVID spread across Europe and we're seeing the numbers tick up here in North America. What are your thoughts in terms of how all this plays out and the impact of these lockdowns and what investors need to think about with respect to them?

Yes, the second wave that's come in Europe in some respects wasn't a surprise. We thought this might happen as the northern hemisphere went into winter. But I have to say that the acceleration of the spread of the virus has been pretty shocking across Europe and the UK. So, in the last week or so, there's been more than 1.7 million new confirmed cases across Europe. And, at the beginning of October, that figure was around about 360 000. And maybe just to give some context, France, U.K., Italy, Spain have been the hardest hit. But even Germany, which has generally done a pretty good job in containing and responding to the pandemic, is seeing an increase. And, in France now, it's something like 50 cases per 10 000 of the population per week. And if I compare that to Canada, it's about six per 10 000 per week. So you can see just how much greater is the extent of the virus and unfortunately still accelerating. And, what we've seen is that governments have had actually little choice but to impose another round of lockdowns because hospital capacity is starting to get stretched and exhausted in some areas, including in some parts of the U.K. as well. So it's not as severe a lockdown as what occurred over the spring. Schools are still open, factories and construction sites are still working, but non-essential shops have been closed. People are essentially told to stay in their homes. And from an economic and from an investment perspective, it's clearly having an impact. We're starting to see that in the high frequency data. We've seen in some of PMIs, particularly for the services sector. So, you know, I think a number of the European economies are actually going to go back into contraction, back into recession in the fourth quarter. I think the U.K. is going to go back into recession in the fourth quarter as well. So, it's not a good backdrop clearly for, you know, U.K. and European assets. To some extent, I think the market is still looking through it and saying: we're going to get a vaccine by the end of the year, which then gets sort of ruled out. So they're trying to look through it. But it does mean there will be continued pressure on policy authorities to do more. So we've had the ECB effectively preannounce they're going to do more QE. The Bank of England's announced that it's doing more QE as well. Although I have to say, I kind of am of the view that the marginal impact on the real economy of more central bank liquidity is pretty limited. But nonetheless, markets are going to like it and it's pretty good for fixed income and for credit. And we've seen that in Europe where credit continues to hold up pretty well despite the second wave.

So along with what's going on with COVID, which is of keen concern all around the world, so is the U.S. election. So just to be clear for everyone, we're taping this the morning of November 6th so we don't have a final result in the U.S. election. However, it's starting to look more and more like we will have a new president. And from your perspective, as chief investment strategist at BlueBay, what are your thoughts around the outcome of this election, particularly if it is a Joe Biden presidency?

Yes, as you say, I think it's very, very likely that Joe Biden will become president on the 20th of January. But, you know, this wasn't the predicted blue wave. If you look at Republican candidates for the Congress, both the House and for the Senate, they've actually done reasonably well, better than expected. And the Senate is crucial. So far, the Democrats have only made one net gain. So it looks like it's going to be a Republican controlled Senate. There is some ongoing uncertainty because there's a couple of seats in Georgia and they could go to a runoff, which wouldn't happen until the 5th of January. And potentially, if Democrats won both those seats, then you'd have a tight Senate, 50 50, with the vice-president, Kamala Harris, with the casting vote. So we're not completely out of election uncertainty, but it's looking very likely at a Biden presidency and probably a Republican Senate. But that doesn't matter, because this actually will be the first time that a new president has come in and faced a divided Congress since I think George Bush senior in 1989. And that raises this issue around the fiscal stimulus. So, the market was getting itself geared up for a blue wave reflation trade. So basically, Treasury yields were going to be moving higher on the back of a huge fiscal stimulus that was going to come out of unified Democratic Congress and a Biden presidency. And we're not going to get that. We'll get something, I think, but we're not going to get that. And it was interesting, in the aftermath, as it became clearer that we weren't going to get that Senate control going to the Democrats and a blue wave, that we saw a pretty strong rally in Treasury yields. And that in turn, I think, supported equities, but particularly long duration growth assets, which is basically big tech.

Just to tie both parts of the conversation together with a Biden presidency, some have suggested that that could lead to more likely aggressive economic controls or lockdowns in the U.S. to control the pandemic. Do you see that as a higher possibility? And will that have as much of an impact as the shutdowns have had in Europe if we have a second shutdown in the U.S.?

Yes, I think that Joe Biden clearly has positioned himself in contrast to Donald Trump as someone who doesn't think that the virus is going away any time soon. To whom, the social distancing, wearing face masks, taking actions to restrict the spread of the virus, is more important. But this is really going to be determined at local and state level in the U.S. rather than by the White House. It’s clearly important in terms of the messaging that comes in the White House. And, of course remember that Joe Biden won't be taking office until the 20th of January. I'm in the camp that thinks that it's really the pandemic that is the primary source of economic crisis rather than the lockdowns per say. What happens is that, even without formal lockdowns, you do then start getting changes in consumer behavior and voluntary social distancing. And I think the outlook is that we've got past the U.S. election event risk. We're going to carry on having an easy Fed, the U.S. economy at the moment is looking pretty strong in terms of the recovery. So that sets up quite well. My one concern is what you've alluded to, Dave, which is, you know, the pickup in various cases across North America and across the U.S.. And we know that typically is followed with a lag of sort of two or three weeks to that of Europe. And so I think there is going to be a concern that we could see quite a significant acceleration in cases and then some individual states because hospital capacity starts getting strained. Do start shutting down and putting in restrictions, but also the consumers just become much more nervous as well. So, you know, I think that's the whump part of the outlook, if you like, where I think there's still quite a lot of concern around, and I think rightly.

Well, Mr. Riley, “that's a Smith and Wesson, and you've had your Six!” If that's the right line?

That's the right line!

There we go. So that brings us to an end. Thank you very much. Incredibly informative. You've always got your pulse on what's going on all around the world. And we always appreciate hearing from you.

It's been a pleasure. And it's good to see you, Dave. And I hope to see you and many other colleagues from RBC and hopefully in the not too distant future, in physical space rather than in virtual space. So my best wishes to everybody and for everybody to stay safe.

We're all waiting for that. You stay safe, too, David. Thank you.

Thanks. Bye.