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tv   Bloomberg Markets Americas  Bloomberg  August 7, 2019 10:00am-11:00am EDT

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york , 3:00 p.m. in london, and 30 minutes into the trading session in the united states. from new york, i'm vonnie quinn. guy: from london, i'm guy johnson. welcome to "bloomberg markets." vonnie: the s&p 500 is down 1.5%, 2838. disney one of the worst performers today. cvs one of the better performers. look at yields. the 10 year yield is down to 1.60%. -- in bondss today today. the yen one of the safe haven place today, stronger by three quarters of 1%. currencies across the world are very volatile today. guy: today feels a lot like yesterday. when you look at the stoxx 600 chart, rallying in the morning, fading in the afternoon. this is all about the bond
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market. the german ten-year is now at -60. we wait to see what the ecb does. brent crude continuing to drop in a bear market, today falling by another free .4%. -- another 3.4%. vonnie: we are getting a surgeon bonds. we are joined by cumberland advisors' chairman and cio. what you make of the last 24 hours in the bond market? guest: it is extraordinary. we have a three front war. trade front protectionism, we've been doing that for a year. we now have a declared currency war. we are seeing it in the currency markets. what that means is we are having capital flows change. all three. that is a perfect storm for trouble. you see the markets adjusting to the trouble. we haven't had a trifecta of risk like this in a long time.
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vonnie: if you take a look at my terminal, all it is is a one month 10 year yield chart. the last three days, we are down 2% to belowrom above 1.60%. david: it is extraordinary. when it is like this, risk is rising. risk premia rising. when you have it in a global setting, you do not know the contagion effects until they show up. markets are worried about it. that's why they are realigning right here. if you were to say the interest rate on high-grade debt in the entire world is going to be 1% for years.
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?hat would you do how would you structure so many economic and financial decisions? the market is now struggling with the fact that that is possible because of what we see unfolding. guy: david, good morning. it is a zero-sum game. central banks around the world are trying to undermine each other effectively. how does it end? david: we are in a competitive race to zero or lower. it is worsening, and we have one to 5%, 30% of the worlds sovereign high-grade debt now at a negative rate. just saw ubs say to its depositors, we are going to charge you to keep money in the bank. when you destroy the income of destroy the income side of the debt structure. ist means the interest rate no longer a clearing point
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between a blender and a borrower -- between a lender and a borrower, between a saver and an institution. that is being destroyed. if that happens, the risk in the financial system is systemic. central banks need the help of governments. they don't need to be pounded by government leaders. they need to have cooperation with those government leaders, and i think we all know who i'm talking about. guy: i think we've probably got a pretty good idea. -60 on the german ten-year. .60s now on the1 u.s. 10 year. how low do those go? david: we don't know what the numbers are, and we don't know what the drawdown is because it is a global phenomenon now in terms of cutting interest rates. the cure is not in the cutting of interest rates and destroying of central-bank policymaking.
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the cure is in lifting .rotectionist war we can reflect on from american history the depression era. it causes world economic changes to shrink. productivity, and it disables the ability of the central banks to do their job. that's what is at risk now. stop bashing the central banks. use the government to make trade peace and expansion, not trade war. david, new zealand, india, and thailand banks moved today, but how much were they forced into it, and how much were they being proactive? david: that is a hard one because if you are sitting in a room in the central bank as the governor, and say next door to me, i've had a rate cut, what do
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i do to protect my border, my domestic industries and investors? you adjust your policy in response to the policy next door. now the neighbor next door says, what am i going to do? i've got to do something, too. you get this cycling down in interest rates. ratesnd negative interest are toxic poison to a financial system, and all of the intermarry 80's -- all of the intermediaries that have to do business in the financial system. the way you stop it is to stop it. when you are in a whole and you are taking, and the hole gets deeper, stop digging. vonnie: david, you are sticking with us. cumberland advisors chairman and cio. muddy waters is targeting burford capital.
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muddy waters said in a report on its website last night at burford overstates the returns it earns on investments and questioned its financial reporting and governance. the stock plummeting, wiping $2 billion off of heard -- off of burford's market value. they responded by saying, "burford has never been contacted by muddy waters. we will respond as soon as possible." cio carson block joins us from san francisco. this is about the behavior by burford, among other reasons why you are short. go into some of these. sure.: it usually works with plaintiffs or in high-stakes litigation
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that costs a lot of money. burford will provide part or all of the funding for the case, and in exchange, if there are recoveries, burford will get a percentage of the recoveries. on the surface, it is an interesting asset class because it is not correlated to anything else, and it is something that hasn't really been that developed as an industry. all of those things are true. the issue with burford really has to do with the state of its business and what it's financials show. in our view, burford is precariously positioned. it is a business that is doing fairly poorly, but it's financials actually look fantastic. the reason for that is burford's .ccounting is misleading misleading is actually an understatement. that, at a high level, is why we are short. the point that you addressed about the late disclosure regime, burford had a 3 billion
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pound market cap and was still listed on london's aim market, which is for smaller companies. it is light regulatory burden, late disclosure. but by the time -- like disclosure. but by the time you get to be that large, it is not appropriate. you layer it on top of the fact that there accounting, they have this esoteric asset class, and the type of accounting be employed for that is what is called level 3 fair value accounting. the kindery similar to of mark to model accounting that enron employed, the legal portion of enron's accounting. basically, they are supposed to sit there every period and say this case we invested in 18 months ago, do we think it is worth more or less than what it was at that time? it is litigation. you cannot reliably model these
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outcomes, yet they told investors they can. we were just incredulous of that from first blush. vonnie: it seems to me that it would be pretty easy to figure out what cases are producing revenue, what cases have been won. it is litigation finance, and as you say, the accounting may be opaque, but you can at least figure out what is winning and losing in the courts. why wouldn't top share for its -- why wouldn't top shareholders , invesco, teachers insurance and annuity association of america, why wouldn't they do their due diligence? carson: it is interesting because i'm not sure that numbers one and two on the shareholder list are really there to do due diligence. , and mark is invesco burnett is the protege of the number two holder, neil woodford
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, who used to be at invesco and made that initial investment for invesco, that really put burford into business as a public company. mark barnett and neil woodford have been criticized for their holdings in companies that have private investments, and specifically how they have at times invested in the private companies underneath a public company and invested in ways that appear to manipulate the marks of those private companies so as to underpin the value of the public company. might idea being that take a few million dollars of their investor capital to kind of push a mark up here, but they've got many more millions of dollars in the public company. here witht happened burford and invesco, mark barnett. 2011, burford funded
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this one litigation called both pharmaceuticals -- called napo pharmaceutical. burford reported it was concluded, and booked a significant profit on it. but it wasn't concluded. it was the following year that it actually reached a jury verdict, but that verdict was a loss for burford's client. but rather than writing this down, in came mark barnett to help invest in a company that basically paid burford the money that burford claimed to be owed. so it was financially engineered. it was not a real litigation recovery, and that helped burford raise money and push up the value of its stock for several years after they first mark it -- first marked it. guy: carson, good morning. was the trigger for taking the position the woodford problems?
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is that what triggered you to take this? carson: no, but it is definitely an indicator. we had a profitably shorted company that was a woodford holding. you might know that woodford, in a way, has been very helpful to holders inort companies that are destined for the rubbish bin. that is not the sole reason, but it was one of the conditions. it is a company that, because of the accounting and all those fair value gains, people had talked about for a while, but it was hard to sink your teeth into until recently. guy: you talk about this being an industrywide issue. you talk about this being an esoteric industry. could you take this on a number of companies involved? is it specific to this company, the problems you are highlighting? or do you think there are similar problems elsewhere in the industry? carson: there are only two
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publicly traded companies of any and imf benford. they used two totally different types of accounting. -- when you look at imf bentham, it is lumpy. they will have a good period and some periods that aren't good. burfordit wasn't that was operating its business much better. if anything, it is growing more bentham.han imf really how they were accounting for it. that is what made us focus on erford.
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would -- on burford. vonnie: would you be prepared to disclose the size of your short? the stock is now down 66%. wired: we make the disc -- the required disclosures. not sure what the fca timetable is for that, but those are the disclosures we make about our short positions. we obviously manage risk. we did trade around this sum because there were some volatility, but we are obviously happy with how things are turning out so far. we have to leave it there -- vonnie: we have to leave it there. that is carson block, muddy waters founder. burford has responded, saying it has never been contacted by muddy waters and has not had any work, butt of its will respond as rapidly as possible. this is bloomberg.
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♪ vonnie: live from new york, i'm vonnie quinn. guy: from london, and guy johnson. this is "bloomberg markets." busy day for the markets. let's get the details from emma chandra. emma: yesterday's reprieve not really enough. the rally looking like it doesn't have many legs at the moment. the s&p 500 down around a percentage point. it was down closer to two percentage points, so we are off the lows of the session. still, nearly every sector in the red. around 5/10lso down of 1%, off the lows, but still deep into negative territory. what we are seeing in the u.s. did start to impact european stocks, but we are back in the
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stoxx 600. if we switch up the board, we can see how they did catch a little bit of that fear as u.s. stocks opened. this is the stoxx 600 intraday come arising close to a percentage point earlier in the european session, falling into negative territory as we saw the u.s., but now flat. let's move on and talk about global bonds because the rally there continues at pace. we are looking at treasuries, gilds, and bunds all falling. the u.s. and german ten-year both falling for the ninth straight consecutive day. that has investors in global financials running for the hills. let's take a look at some of those banks doing not very well today. bank of america down some 3.6%. jp morgan down 3%. also impacted by some not so great european bank earnings we got today from the likes of him or spank and unicredit -- from
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the likes of commerzbank and unicredit. a number of the banks in europe raising concerns about lower rate environments. vonnie: thank you for that. great market check there. it is turmoil in the markets today. we are back with david kotok, and berlin advisors chairman and cio -- david kotok, cumberland advisors chairman and cio. you have a knack for being here would lots of things are going on. economistsng to have and $1 trillion worth of money managers at the event this year. what questions will you be trying to answer? david: we have assembled two panels, and they are going to be public. everyone has agreed to that given what is going on. one of them is on china, trade war, protectionism, and the latest exchanges.
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the second one is on mmt, central banks, and monetary theory, and how you apply it in this context. never did we dream when we planned out this year that we would confront this week. no skill involved in picking the calendar on this one. vonnie: you yourself advise clients, too. i know you are very involved with the muni market. but in markets like this, what do you do? have you seen something like this before? david: this is extraordinary. you see these shocks once, but they don't come around often. we know we have dislocations in the world. that means credit is at risk. contagion comes out of nowhere. systemic risk is a rising element. stay high quality, and if you look at the selloff and rally in high-grade bonds, credit spreads are widening at the same time, which the market is saying while
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we see the high-grade debt go lower, the junk debt is not going lower, so the risk spread is widening. is we cannoting forecast these outcomes. things happen fast. so cash, even if it earns little or zero, is a reserve to deploy. we have a cash position in our u.s. etf portfolio. we have a cash position in our other portfolios. in our quantitative scratchy -- quantitative strategy, we have been in a cash position for month. you can't buy anything on a downdraft without the cash sitting there to buy it. guy: david, huge sways for the world liabilities -- huge swaths for the world liabilities are in dollars. is the dollar overvalued? david: the dollar is the premier currency in the world, and if
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you look around the world, whether you want to call it the best or the least worst is a debate, but the fact is there's a reason why the dollar is strong. why allere's a reason of our competitors in currencies are trying to weaken the currency. -- if we tried to pursue a week currency policy, and i hope we do not, then we are in a competitive devaluation of currencies. nobody wins. we are already in that fight with trade, and nobody wins. the risk is more protectionism and capital flows, and nobody will win. guy: the reason i ask about the dollar is, and the reason i phrased it the way i did, is because of the liabilities that exist elsewhere. as the dollar goes up, those become more expensive. it becomes harder to serve its in vastest -- it's debt
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swaths of the world. if the dollar is too strong, it is limiting the ability of the rest of the world to generate inflation. is there a case for a weaker dollar to lower those liabilities, to lower the incumbent assets, and therefore potentially start spinning up inflation elsewhere? you just described the debate very eloquently. do you weaken the dollar trying to get inflation elsewhere? i'm not so sure what that penalty is for the united states. do you allow the dollar to be strong, in which case you are penalizing those people who borrowed in dollars and now have to pay it back? no one can win in the resolution. when we had a crisis 10 years ago, what was the answer? 2008.0 met november of
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the central banks. all were there with finance ministers. they sat in a room and said, we had a crisis. let's come out of this crisis with a collective resolution. it took a few months to implement it, and things turned around. such a meeting is now required. whether it happens or not is up to governments convene it. vonnie: the two-ten spread is below 10 basis points. are we closer to a recession then we were yesterday? david: the market-based indicators you just recited our forecasting recession. if you contract trade protectionism and introduce all of these risk elements, you increase the chance of recession. those odds are rising for the united states. you fordavid, thank
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your perspective. you've been in the markets a little while, and have some knowledge of these events. advisorsok, cumberland founder and cio. checking u.s. majors now, we can see that stocks are selling off. the s&p 500 down 1.5%. all stocks in the dow down as well, and the overall index is 1.5% lower. the nasdaq is down 8/10 of 1%. gold futures are above $1500 announced today. 0577 versus the. u.s. dollar. this is bloomberg. ♪
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there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. ♪ guy: from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is "bloomberg markets." some breaking news now. the u.s. to apartment of energy
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releasing its latest numbers for crude oil inventories. we are looking at another possible drawdown, at least according to the market, which is looking for a drawdown of 2.5 million barrels for the week ending august 2. crude oil plummeting today anyway, but we are having this massive market selloff. it is down 3.6%. a build of 2.38 5 million 2.385 million barrels. so there are some surface inventories in the market. that is causing oil to drop to 3.7% of a downturn today. quick look at refinery utilization, it was up 3.4%. the market was just looking for 0.5%. gasoline inventories saw a build of 4.4 million barrels. the market was looking for a drawdown, so another surprise. guy: the oil market is full of surprises right now. let's get a bloomberg first word news update.
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here with the details, kailey leinz. viviana: president trump has resumed his campaign against the federal reserve. he tweeted that the fed must cut rates "bigger and faster," and said the central bank should "ridiculous quantitative tightening now." talks with thein u.s. to increase defense payments. on twitter, president trump says they paid substantially more than the year before. he says the relationship between the two countries is a very good one. at least 14 have died and 145 others wounded in a taliban suicide car bombing in kabul. the vehicle was stopped at a checkpoint outside a police station in the afghani capital. the attack came shortly after the taliban and the u.s. reported a progress to ending the nearly 18 year war. fedex cutting another connection with amazon. its ground delivery contract
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with the world's largest online retailer won't be renewed when it expires the at the end of this month. two months ago, fedex said it would no longer fly amazon packages. amazon is building its own shipping network. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. vonnie: thank you. a couple of headlines now. burford capital responding to muddy waters, saying that the ceo and cio intend to buy burford shares. they will issue a detailed response shortly. once again, burford repairing a detailed response. we will bring you all of those comments as soon as we get them. the force, it seems, was not with disney for the launch of the company's new theme park addition. disney shares taking a tumble in
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trading today, the worst performer in the dow jones and the s&p 500, down more than 5%. joining us is per bay become a mediatech capital partners managing director. is this a one-off for disney? it doesn't tend to miss. porter: i think disney is in an investment period for the next six months. they will close out 2019 with a huge new set of blockbuster films. "frozen," andars, they will have launched disney+. espn is starting to get some traction as well. investors are looking at the past right now. they took a big investment hit on the fox assets, and the theme parks were marginally down, but the key to disney right now if you are an investor is it was up 27% for the first
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six months of 2019. it has got to retrench a little bit. to get up again, i think it will close out this year with a bang and start to move into next year, even though disney+, the streaming company, is not going to make a profit by bob iger's projections until 2024. vonnie: the selling today, could it potentially be seen just as some profit taking? porter: exactly. it is actually a pretty good time to buy disney. if you hold it for a few months, you will see the stock get on the elevator backup. guy: good morning. clearly there is a land grab going on at the moment. i have to question, how long is the $12.99 price tag attached to the streaming service sustainable? porter: i think a lot of that depends on what the competition does. you saw what happened when netflix earlier this year raised their prices.
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traditionally they have a big drop in subscribers. canisney keeps -- and they afford to keep $12.99 for a arele of years -- they projecting very modest subscriber growth through the next two or three years. i think they are going to well or 25 the 24 million million they are looking for at the end of 2023. they could easily start to approach 50 million to 100 million that price, and i think that's where they may stay. guy: that's a lot of subscribers. do you think the direct to consumer business is going to end up cannibalizing some of the other revenue streams the business has? porter: absolutely. the big factor in streaming right now to watch his churn. cable --the u.s. ash hase in the u.s. typically
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a 3% to 4% churn rate. netflix has 7% to 8%, and will go lower because they are losing "friends," twod of their biggest draws. churn is needed to keep subscribers on your network, and that is why disney has much less cost of content because of a huge archives. secondly, they have the resources and finances to be able to sustain a low-cost price. espn+,g together hulu, and disney+ is almost an irresistible package. buoyed disneyhave at times when other parts of the business have maybe been a bit on be. is there a concern -- a bit bumpy. is there a concern that the star wars parks are not bringing in as many visitors?
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porter: that is debatable. is star wars park unbelievably appealing to not just young kids and teens and preteens, but the grown-ups. and sit at that intergalactic bar they have with all of the characters it the films. vonnie: i can totally tell. it sounds look a good proposition, actually. but elsewhere, cbs, viacom. what is the update on that situation? porter: it is imminent. i wouldn't be surprised if you didn't see an announcement today , certainly by the end of this week, that the deal is done. they are still debating exactly what premium cbs has to pay for viacom because viacom is losing money right now. they've been a little bit depressed in the share price market cap. so that will happen, but a lot of analysts are saying they are
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going to be another player in the streaming wars. that is not going to happen. they are too small. they don't have the financial resources. i think as soon as this deal is done and they are a recombined company again, the buyers are going to be in line, knocking on the doors. vonnie: and who might those be? porter: verizon a year ago made an offer. i think they need something to compete with at&t, which bought time warner. you have verizon, then there's microsoft, which has 80 million xbox users deployed around the world that can stream anything, but they don't have any content to sell those 80 million xbox users. apple is pretty thin in terms of content. they are coming into the market later this year, early next year. there's no shortage of buyers for cbs-viacom. vonnie: porter bibb, thank you.
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porter bibb, mediatech capital partners managing partner. guy: let's get back to the markets. we are seeing an interesting afternoon developing, looking similar to what we saw yesterday. rallying in the morning, beginning to fade. let's take a look at the german ten-year, -60. despite they 3.44%, data we just had. markets are under pressure. they are likely to remain under pressure for the rest of this session. the bond market certainly seems to be wagging just about every other asset class out there. this is bloomberg. ♪
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♪ vonnie: live from new york, i'm vonnie quinn. guy: from london, i'm guy johnson. this is "bloomberg markets." let's turn our attention now to muni moment. joining us from wisconsin, h, portfolioric manager of fixed income over at wells fargo. how busy is august going to be? how many munis do we see priced? difficultt has been a summer in terms of finding bonds, that's for sure. issue, but an fundamentals are strong. we are seeing very few state and local governments needing to make cuts. clearly we are late in an economic cycle. it is just finding those bonds
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that remains the biggest challenge. guy: in terms of what we are expecting to see and how you solve that challenge, how are you going to go about it? gabriel: i think you have to pay attention when the supply does come. it was quiet in july, but we had a nice tick up in june. we see that now in august as well. you have to pay attention as an investor when these new deals come. we are seeing a number of large deals for bryant park in new york. when some of those transactions arrive to the market, you have to come prepared with your pencil sharpened and ready to look at what offers relative value today. vonnie: curious as to what your reaction is to today's market moves, to the drop in yields of the last few days. where has that also hit munis? tied to municipals are
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the credit market, but it is also a credit asset class. the municipal market is much less volatile, and it is showing that right now. i think that is a positive attribute. you seen the treasury market move substantially since the beginning of the month, somewhere in the neighborhood of 35 to 45 basis points, depending on the maturity. municipals have moved half as much in terms of yield. that makes them cheaper on a relative basis today for investors. but that is moving around quite a bit. clearly with all this trade and fed talk, we have seen volatility rear its head most in treasuries and other asset classes. for municipals, really it is that positive attribute of being a much less volatile asset class for an investors to consider. ofnie: we've seen a lot corporate buying in the market. -- a lot of corporate supply any
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market. where are we seeing the supply come online? what areas interest you? gabriel: i think supply has been scarce, but there have been some pockets of new deals. common spirit is a big health care merger. over $5.5oing an billion deal right now. bnw airport.- you seen some taking advantage of the larger windfall they've gotten from rates. the key point for investors is we all know there's infrastructure needs in this country. the big question is how to pay for it. there's not been a tidal wave of this type of debt for u.s. infrastructure to take advantage of these lower rates. i think it is that question of how to pay for it that government needs to figure out. vonnie: thank you for your perspective today. gabe d gav -- that is
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iederich of wells fargo joining us from wisconsin. guy: time for our stock of the hour. we are focusing on the mining giant glencore. trades are trading at their lowest since 2016 after earnings failed to impress. , chandra has more details -- emma chandra has more details. emma: glencore reported their s,akest profit in four year but they announced plans to shut -- one of theird mines. the company wants to limit global supply in an attempt to turn the flagging market around. it is a risky strategy, but something lynn core has done before. they cut zinc production in 2015, followed by a 60% price
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surge in the following year. iron ore has surged, at least until very recently. produce doesn't iron ore, and had to watch in the first half as rivals cashed in on the rally. the last few days we have seen iron ore's plunging, along with a number of other commodities hit by escalating trade tensions and concern about chinese demand. today, glencore's ceo was asked about this. he dismissed demand concerns linked to the trade war, saying they were not that bad. sentiment is, though, and investors have punished the company. shares now falling for the seventh consecutive day, the longest losing streak since november 2015. guy: thank you very much indeed. chandraa cup -- emma covering our stock of the hour, glencore. vonnie: the pga tour returns to the east coast this week in jersey city, and marks the start
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cup.e fedex recentlyo rory mcilroy about his disappointing start in northern ireland. but i wille, i think remember is how i responded the second day. shot 65 on the friday, not quite enough to make the weekend. what i will remember from that week is that day and the support that i got. me in a great lesson for that i played so badly the day before that you can dust yourself off and pick it back up, go out and shoot 65. does not really that much difference between the two. it was one of those things. i maybe wasn't quite as prepared for the conditions as i should have been. didn't play well on thursday,
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but it sort of relaxed me a little bit. at the same time, i feel like i still had a chance to make the weekend, and wanted to play in my hometown for two more days. that's what was driving me forward to try to make the cut. you are a major winner, and they are few and far between. i wonder, did you become a little complacent about the regular tournaments? is it hard to keep up that hunger? for every time you step on the golf course, do you still have that drive? rory: for me, this year i wanted to treat every tournament the same. i didn't want to downplay some tournaments. i just wanted to play every tournament for what it is, a four-day golf tournament. they are maybe on different courses with different conditions, but the premise is the same. we are playing 72 holes.
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whoever gets the ball in the hole quickest on the 72 holes wins. now i realize that every week is important, and every week you want to go and play well. i want to give it my absolute best. i think that's why i've been so consistent this year. i've played 14 or 15 times on the pga tour and have 12 top tens. i've really brought my game and performed pretty well. vonnie: do you work on your psychology? do you have a performance coach that really helps in that regard? at bloomberg, we work with a lot of high-performing individuals. you wonder how you keep that hunger when you've done it all, and essentially you've done it all. you've made enough money. you've done what you want. rory: it's about having a purpose. if you don't have a purpose in your life, i can see where you wouldn't have that drive or motivation. but if you get up in the morning and there's something you want to achieve, you know.
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for me, i want to overtake brooks in be the best player in the world. the way i look at it, i do something for a living that i love, which is play golf. i'm very lucky that i play golf for a living. who wouldn't want to do that? so i realize how lucky i am, and i want to make the most of it. vonnie: that was rory mcilroy. you can see the full interview online. we will speak with brooks koepka a little later on to get his take. this is bloomberg. ♪
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♪ guy: let's turn our attention now to the oil market. the abu dhabi national oil, company is boosting its capacity to store and supply crude in key export markets. tellingany's ceo bloomberg that, "given the
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political risks, oil is underpriced." >> re: underpricing it? probably -- are we underpricing it? probably, yes. world seems to be underpricing the risk that supply could be interrupted. the deal with bgi is an exciting adnoc in by drinking as a shareholder, we have the opportunity to further expand that company into new markets and bring new opportunities to the three shareholders, but especially to adnoc in terms of their position. ceo russell vtol hardy. let's go to chicago now. kkmre joined by dan deming, financial managing director. i am wondering when we get
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through 50 on wti. crude price is globally under pressure. how low do we go? ,an: looking at the trajectory $50 looks like a possibility. we are seeing downside momentum continue, breaking through june lows and not calling into question that $50 level. as you continue to see this economic structure, if we can to seeasy -- continue to reacting the way they are, we could see that level. guy: how low does it go? dan: i think it can go lower because of the fact we just saw what happened in the last 24 hours, with bank of new zealand and india, as well as thailand. now we are putting more pressure on the fed.
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now pricing and 100% chance of a cut in september, 30% chance that it is a 50 basis point cut. so the fed is being forced by other majors taken by other central banks. guy: we will leave it there. from kkmg joining us financial at the cme. vonnie: coming up, we will continue our discussion on potential rate cuts with viraj arkera fx and global macro strategist. a major surge in bonds. the 10 year yield at 1.63%. at about 8.65d basis points. this is bloomberg. ♪ hey! i'm bill slowsky jr.,
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guy: 30 minutes left in the european equity trading day. from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is the european close on "bloomberg markets." on european lows equities, trading up by 2/10 of 1%. the german ten-year continues to remain elevated, as you can see. yields falling, prices rising. we are -60 now. we are just hearing from chicago the price of crude remaining under pressure, down by 3.34%. brent is in a bear market. vonnie: wti as well, after inventories earlier on and a market selloff. off the lows in the u.s., but the s&p 500 down 6/10 of 1% still. the lowest performer is disney after earnings shocked the street. disney down more than 5%. several groups higher, including gold, above $1500 an ounc

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