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tv   Bloomberg Markets European Close  Bloomberg  August 7, 2019 11:00am-12:00pm EDT

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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 ounce.
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the 10 year yield, a 40 basis point move in just a few sessions. bonds surge today. is rapidlyread sinking. the yen stronger once again today, trading right now at 10 5.78. guy: during the asian session, central banks disappearing several surprises. new zealand, india, thailand all delivering bigger than expect it rate cuts to shore up their economies against mounting u.s.-china trade tension. we are joined by viraj patel, arkera fx and global macro strategist. what are we seeing at the moment? are we seeing central banks trying to deal with the trade narrative? why are these central banks doing what they are doing at the moment? are they worried about their currencies? give us your sense. raj: one, the global economy
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is in a slowing down stage. theop of that, you've got shock adding fuel to the fire, and there seems to be this race to the bottom with interest rates and currencies. it is sort of every man for themselves right now in terms of central banks. i think most people are looking internally, but for most of these economies, it is privette. guy: where is the bottom -- is pretty bad. guy: where is the bottom, and what happens when we get there? viraj: it is whoever's got the biggest firepower in their toolkit. when it comes to the federal reserve, they've got plenty of ammunition left. see things moving down for treasuries below 1.5%. it seems like that is the direction of travel. there can be no sort of low there. i think the real difficulty is what is the key source of risk. is it geopolitical uncertainty? there's no end in sight for that trade war.
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that means you are in this race for a bit longer than we thought. vonnie: the currency moves we saw today, does it remind you of any times in recent enough history? any kind of echoes from the past? viraj: this seems like a classic flight to safety. we seen yen moves like this at times. dollar-cny was also moving lower. in 2018 as well because of u.s. intervention. when you get shock moves, it's usually a positioning adjustment. right now i think you are seeing a flight to safety across all safe haven asset. that seems like the only defense of trade right now in currency markets. vonnie: how much are you involved in asian countries? we saw a major central bank moves overnight, some of which came as a surprise to the markets. are you trying to take advantage of the situation a little in fx?
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viraj: i think asia has been cheap since april of last year, when the trade war kicked off. i think the real risk is there is no end in sight for this trade war, which means it is very difficult to put money at work technically in asia. if there is any bright spot, indonesia seems to be that limited local political risk and geopolitical risk. but even then, carry right now is not for of anyone's mind when you've got risks for fx volatility potentially increasing. guy: how much of a tail risk is u.s. fx intervention? viraj: it feels as if we are one step away from president trump adopting a whatever it takes policy to drive the dollar down, but the reality is i think the risks are just lukewarm at this stage. the administration wants to keep the threat on the table. i think they are happy with that
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at the moment. but if euro-dollar breaks or if cny moves closer to 1.20, those odds go up quite a bit. guy: could the ecb spark that? i'm looking at september and, given the data out of germany that are bad, that the ecb is going to have to go big. the currency in germany is flattening rapidly. the signals aren't great. if the ecb pulls out the bazooka in september, how does the white house react? do we go from lukewarm to boiling pretty fast? viraj: the euro is pricing in quite a bit of ecb charity right now. the ecb might not want to engage in a currency war. fromwill take the cue data and deliver what the market is probably expecting. we even heard from some outgoing central-bank members that may be the market is expecting a bit too much. there's probably risk of a disappoint here. i think the risk of an ecb led
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move seems quite low. tariffs ore's something that come to bite the euro. vonnie: will we see unilateral intervention in a currency around the world at some point this year? if so, who will do it? reluctant to say that anyone will engage in a unilateral fx intervention. right now it seems like a zero-sum game to be engaged in a currency war, not least when the global economy is in slowing stage. for me, it seems like the white ande will dictate currency foreign trade policy, and everyone will react by some that. vonnie: how much do you regard the president tweeting where rates should be as a concern or something that might actually impact where rates will be? viraj: i think when we assess
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the toolkit that president trump has two sort of influence , mosts, i think the real effective right now is fed intervention or leaning on the fed. i think we are seeing that constantly come of the barrage of tweets coming through. while he may not have any material control over fed policy, i think you are seeing the risks skewed to the downside. i think that is enough to keep the white house happy and keep a lid on the dollar for now. for me, we could be like one tweet away potentially from a fresh education of qe, and that will certainly spook the bond markets. costs,esn't come without of course, but it seems the most logical step in the near-term. we should keep expecting those tweets. guy: china has been labeled a currency manipulator. it's gone for seven on its currency.
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that's kind of out of the way now. i'm wondering what the communication strategy is in the foreign exchange markets. it strikes me that both of those things are designed to signal something, and the other side didn't really respond in the way that was anticipated. how useful is foreign-exchange in this kind of signaling process? viraj: i think the most important signal is that fix every morning. they could have played a much more aggressive stance in fixing dollar-cny higher than they have been. it has been gentle steps toward that seven handle. guy: seven is a big number, though. viraj: i think seven is a big psychological number. i think the pboc sees it as more of a percentage game. if we look at a textbook move in response to terrorist threats, you could see a number around 7.10, 7.20. the pboc has learned their lesson. i don't think they want to get back into that sort of virtue
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cycle. guy: ok. viraj is going to stick around. vonnie. vonnie: markets off their lows, but the dow still down around 1.1%. some of those stocks have turned higher, including coca-cola, up 6/10 of 1%. the s&p 500 down 7/10 of 1%. both major indices come a -- both major indices, disney is the worst performer. the nasdaq down just 3/10 of 1%. all eyes on bonds today. this is bloomberg. ♪
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♪ york, i'mve from new vonnie quinn. guy: from london, i'm guy
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johnson. this is the european close on "bloomberg markets." let's catch up with the bloomberg first word news. here's courtney donohoe. courtney: president trump now in dayton, ohio, the site of one of the two mass shootings over the weekend. he will pay tribute to first responders before flying to el paso for similar event. is being criticized for anti-immigrant rhetoric that critics say helped inspire the el paso shooting. pakistan is underscoring its unhappiness with india's recent action in the disputed kashmir region. it is downgrading dip a medic ties and suspending trade. the indian -- downgrading diplomatic ties and suspending trade. the indian has taken actions that put the region more in control of the central government which is -- central government. kim jong-un's has north korea's latest missile tests are a warning to the u.s., trying to
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pressure ending military exercises with south korea. defense secretary mark esper says the drills are needed to maintain readiness. a trade group sworn american tech companies will pay the price for tariffs on more chinese products. they say u.s. firms would pay an additional $1 billion a month or more. president trump says he plans to add a 10% tariff on nearly all remaining chinese imports, and that includes a raft of consumer and tech goods. 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. donohoe.ney this is bloomberg. vonnie: thank you. let's get a check on where we stand in global markets without ago doolittle -- with abigail doolittle. abigail: take a look at the s&p 500 and the nasdaq, both lower, but well off the lows. at the lows, these indexes both down more than 1.5%. in europe, the dax up 90 tenths
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of 1%. in asia, the shank -- up 9/10 of 1%. in asia, the shanghai composite down 3/10 of 1%. let's take a look at what we have seen in the u.s. on that whipsaw action. emea futures down about 2/10 of 1%. it will be very interesting to see how the day plays out. the big rally we have for bonds, this is a nine-day chart of the 10 year yield into the fed meeting. we had bonds lower. some investors addicting trading ahead of that, and perhaps also betrayed news from last friday, that tweet from president trump. today, we see down 45 basis points in just nine days, down eight of those nine days.
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the biggest rally for the 10 year yield going back to 2011 during the credit rating crisis for the united states. that is a degree of safety being sought by bond investors. that has something to do with the 10 year yield, the debt crossing the 10 year yield. this is pretty interesting. this goes all the way back to 2007. each of the 10 year yield that crosses, huge move down in yield by more than 100 basis points come back down to hundred 80 basis points and 150 basis points. right now we are looking at a move down since the debt cross of 150 basis points. if we follow the more extreme ones, we could see yields go closer to 1% to 1.5%. that is what the 10 year yield is confirmed for at this point. some of the worst stocks in the s&p 500 and in europe, the banks. jp morgan and bank of america down sharply in the u.s., and in europe, deutsche bank and
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allianz down as well. guy: we also had commerzbank reporting earlier on as well. thank you very much indeed. let's get back to viraj patel, arkera fx and global macro strategist. global years are under pressure. let's talk about the pound. the latest book he odds on a no deal brexit are five to seven. is that fully reflected at the moment? viraj: the odds are like 35%. the game is guessing the right probability for what a no deal brexit should be. havenk sterling markets probably priced in above 50%. this seems like a momentum driven move related to no deal, but i'm not entirely sure we are all on the same no deal risk assessment page. i look at the probably of
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us, november 1, moving to the ,ideo trading terms -- of us november 1, moving to wto trading terms, i would put the probably be much lower than implied betting and certainly much lower than what sterling markets are indicating. guy: are you willing to bet against the market at the moment? as you say, it is kind of a one-way trade at the moment. i agree, but you only have to look in the direction of travel to appreciate the momentum could get us significantly lower from where we are now. viraj: when it comes to sterling markets right now, those who see a barrage of headline risk coming through, that is going to keep this driven. u.k. politics is way too messy to predict right now. i am just not going to touch the currency. when positioning is so one-way, that makes me nervous about chasing fresh shorts here.
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i don't blame anyone not discounting the scenario. i think that path seems very cloudy now, but chasing the downside seems very unattractive from a risk-reward perspective. whate: the roche -- viraj, is the question you get most from arkera clients these days? are they requesting something be done specific with their dollars or euros, whatever it maybe? viraj: at arkera, we focus a lot on local political and geopolitical risks. people are very much trying to get the local stories right. i think you see that with brazil. you could have made a decent buck on the rial. in south africa, where the credit is turning quite negative. i think paying attention to
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local stories is quite important, and finding those sort of relative havens, like we mentioned indonesia at the top of the show, and on a relative basis, turkey has limited headwind risks relative to what we were used to earlier in the year, those are the spaces where maybe there is more value to be played at, and it is just about making sure you are on top of the story. appreciation for the dollar at almost 1% versus the south african rand. where are you seeing fragility's -- are you seeing fragilities? viraj: we've been thinking about what a global currency war would look like, and who the winners and losers are in that. anyone with a low inflation drop at front of the queue to start intervening or adding monetary
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stimulus to keep their currencies week, and anyone with a high inflation problem has the exact opposite. you don't want your currency to weaken too much. as you look at the high-yield and mexico, brazil, mexico to , what we are really looking at for divergence in a global currency war, all of that points to increased volatility in the fx markets. you seen that in people picking up value. guy: in the em space, where are the biggest liabilities? viraj: it is working in favor of those with shorts in debt liabilities. countries like turkey, south africa. guy: the currencies are beginning to a tree she ate -- beginning to appreciate? viraj: it is fighting that sense
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of rally in the dollar. if that is being taken off the ifle by the white house, anyone thinks president trump will allow or tolerate appreciation of the dollar from here, i think we are seeing that risk in 2019 come off the table, so it seems more neutral risk around the dollar which is helping the bid of local currency markets -- guy: if we were to see it 10% appreciation the dollar, walk me through how that would ripple through those economies with big dollar liabilities. viraj: i think it is those with inflation problems. shortage perspective as well, if interest rates move in the right direction, it is not as troublesome. for me, it is the volatility. if it is a sharp move in the dollar or if u.s. yields are tumbling because of a flight to safety, that is blue medic. all of that is -- that is problematic. all of that is what we are
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seeing right now. the source of shock is the china trade wars right now. guy: we will leave it there. thank you for your time, viraj patel, arkera fx and global macro strategist. vonnie: remember to check gtv on your terminal. catch up on key analysis, save your favorites for future reference. gtv . this is bloomberg. ♪
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♪ guy: from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is the european close on "bloomberg markets. it's time for a look at some of the biggest business stories in the news right now. raising -- cvs is up after raising its forecast for the second time this year. shares have lost 17%
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year-to-date. way atst cuts on the walgreens. they will close locations in the u.s. in addition to 750 closings already announced. walgreens says the cuts are necessary to overhaul many parts of its operations. the moves will result in charges of up to $2.4 million -- $2.4 billion. shares of weight watchers are surging after the company boosted its 2019 earnings forecast and reported stabilizing subscriber trends. at least two analysts upgraded the stock. bank of america told clients, "weight watchers is getting back on track." that is your latest bloomberg business flash. let's get a check of u.s. markets more broadly now. we are off our lows, but the dow is down 1.2% nonetheless. the s&p 500 down 8/10 of 1%. the nasdaq down 4/10 of 1%.
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most of the action in bonds today, with the 2-10 spread at 8.62 basis points. 504 an ounce -- is ounce.4 an guy: the dax is surging, as is the cac 40. bayer, is being led by on the delay of the round of trial. the cac 40 is up by about 0.5%. bunds still -60. as vonnie said, the bond market very much in charge. this is bloomberg. ♪ bloomberg. ♪
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go until theds to end of regular trading in europe. green in europe. we paid a couple of hours ago.
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a comeback now. germany trading strongly. the iberian stocks are trading strongly. france has come up. very some art what we saw yesterday. initially we saw a rally this morning, this is the stoxx 600, then we made it into the u.s. open, and we started to bounce back. a little bit of rollover now, but nevertheless, a similar shape in the market. take a look at the gip, a three-day chart. you can see this double formation in terms of the rise in than the drop we see around the u.s. open. similar timing. the ftse is up, the dax is being led by bayer. bank stocks are weaker, as are some of the oil names. total, some of those similar names trading lower. oil continues to be under pressure.
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let's take a look at the individual names to show you a few stocks worth paying attention to in europe. bayer is one, up nearly 6%. the reason is the latest roundup trial has been delayed. there is an expectation in the market we are heading for a settlement. that is the effect on the stock. commerzbank is trading down. we will talk about that in a moment. the mining sector under pressure. glencore is exposed to the iron statement, but the earlier, nervousness in the market, miners trading down. vonnie: it looks like it was going to be a shakeout today. it is turning out to be somewhat of a shakeout in equities, but we are off our lows. the s&p down just .9%. the dow is still the worst performer. it is and bonds were a lot of the action is. the 10 year at 1.64%. the three-month 10 year spread
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is not -39 basis points. well into negative territory. haven, 105.67.fe let's have a quick look at other asset classes. ounces above $5,000 an and you can -- above $1500 an ounce. quarter, upockout 5.1%. disney surprised with a miss. down 5.1%. crude inventories earlier. that is contributing to the decline in crude prices. $50.84 after we saw slight build. guy: let's get back to those european banks. commerzbank says it is becoming tougher to reach a target for higher profits this year after a fourth straight quarter of falling revenue, the bank warned of weaker earnings as escalating
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trade tensions take their toll on key corporate clients. bloombergs matt miller spoke to commerzbank's cfo about the potential for more interest rates. >> it is unclear what the additional benefit of the interest rate is. nevertheless, if it happens, you need to deal with it and it will put additional pressure on the sector in general and we would need to see how the assets can look like. the idea is they would have no other choice because of the geopolitical issue, because of the global trade war. that helps your customers continue in business and do more business with you. does that not make sense? stephan: in general it makes sense. that is what the benefit of last year is. does an additional .2 or .1 create an additional effect or are the collateral damages, not
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to speak about pension plans, do they outweigh the positives? matt: how important is the fiscal side of things. i spoke with all of schulz last week and he said there is no financial crisis. germany does not need additional spending, he is not going to boost his spend on infrastructure or anything like that. do you think germany needs to do that? stephan: i do not think it is anything we can see right now. the economy is growing this year, albeit at a much slower pace. we will probably see some contraction in q2, and we are seeing a growth rate like a percent for next year. in that sense, doing a fiscal stimulus program is something that will always be helpful for the industrial base. in total, you need to weigh what is being done on the monetary
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policy side and it is unclear whether you can add with additional stimulus, additional results. think germany is where needs to be when it comes to infrastructure and digitization? stephan: this is a personal view, but if i look at our industrial base and what we have been doing, i think we're in good shape. matt: you said hitting her profit target looks increasingly -- hitting your profit target looks increasingly ambitious. that has become almost speak for we will cut our target soon. stephan: it is more than corporate speak. it is a level of a fighting spirit you have. it is clear if you look at what is happening around us, especially over the last does go or three days with the escalation of the trade conflict , and easier version is probably to give up, but that is not the corporate dna of commerzbank.
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guy: matt miller talking to commerzbank cfo earlier on today. let's go sense of where the banks are in europe and the challenges they face. we're joined by bloomberg's senior finance editor jim hertling. deutsche bank and commerzbank are facing the same problems. they set a target, they set a profitability goal and the goal post moves. the trade story gets worse. the ecb will cut rates. that affects the net interest margins. you look at commerzbank and you extend that to deutsche bank. while these guys find a way out of that spiral? jim: for them it is not a new story. they have been dealing with a slowish economy for a decade. loaded negative interest rates for many years now. the only thing it changes is their hopes and expectations. he does not change how they are doing business.
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their margins are getting unicreditwhich is why cut its revenue target, commerce bank increased its loan-loss provisions, probably threw away its targets. what do they do? they batten down the hatches. it is a cost-cutting story. vonnie: that is where i wanted to go, james. can you cut your way to profitability given how much has already been cut? is there more fat to cut from these banks? james: there is always some that iscut, but the question now holding on tight to what you have in terms of can you cut your way to profitability? that is deutsche bank's plan. can they get there? we will see. people have been talking about them having troubles, the risks
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of cutting muscle. we will see. you can only cut so far, and certainly there is more to go, more to trim. we saw with hsbc, they are cutting a few thousand more jobs. that is the story of european banking. guy: here's the problem. deutsche bank comes out with this big plan and the market within 12 hours is going, we are looking at the data in the data is not getting better. we had confirmation after confirmation the german economy is in trouble and deutsche bank is retrenching to that germany economy. they already trade on tiny book values. investors have largely given up. investorsint do completely give up on these banks ability to turn themselves around? i do not know where this ends. i keep seeing -- i've cover these banks for a long time. we all have. it just gets carry on and on. i do not know where it ends.
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years, european bankers have resisted consolidation for reasons, they cite regulation, political pressures. once you get to a semi-normal business environment, if there can be some sort of u.s.-china trade deal, the rhetoric can be maybe you canhen see a way to stabilize and grow your business were possible consolidation. vonnie: are we seeing a huge divergence between what is going on in the major banks in europe and what is going on with the more regional banks? are they a healthier position? cannot do any economyr worse than the they are struggling with. as mario draghi said, the outlook is getting worse and worse.
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there will be regional banks, smaller banks, for example france that might hit out with a strong quarter of trading, but they are still struggling and swimming in the same swamp. guy: a tough place, wherever you are in your. thanks for much indeed. ing joining us on the banking sector. this is how europe has settled. not much movement. broadly positive at the close. we have rallied in the last hour and a half. individual names worth pointing out, commerzbank down hard. fire training strongly on the german market. of more coverage coming up on bloomberg radio at the top of the hour. jonathan ferro is in new york, i will be joining him in london for the cable show on dab digital radio in the london area. 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 the european close on bloomberg markets. let's get the bloomberg first word news update with courtney donohoe. courtney: president trump has resumed his campaign against the federal reserve. he tweeted the fed must cut rates "bigger and faster." and he said the central bank should stop it "ridiculous ," andtative tightening added "incompetence is a terrible thing to watch." south korea is in talks with the u.s. to increase defense payments. , president trump said south korea paid the u.s. $990 million, substantially more than the year before.
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he said the relationship between the countries is a good one. atleast 14 people have died 145 others have been wounded in a taliban suicide car bombing in kabul. the bomb went off when a vehicle was stopped at a checkpoint outside a police station. the attack came after the taliban in the u.s. reported progress on negotiating and end to the 18 year war. fedex cutting in other connection with amazon. it's ground delivery contract will not be renewed when it expires at the india this month. fedex said it would no longer -- at the end of this month. just months ago fed ex it would no longer fly packages. amazon is building its own shipping network. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm courtney donohoe. this is bloomberg. vonnie: thank you. it is time for our stock of the hour and that is cvs.
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shares of the health care company popping. abigail doolittle joins us with more. abigial: a solid quarter, they beat top and bottom line estimates. there are a few things going on. a strong mix of businesses. they made that caremark acquisition not long ago. the tbm businesses 60% of their business, retail 38%. as for the growth, the ppm business did well. prescriptions did very well. that was the top growing business. when you couldn't together, investors are lighting that. pressure, been under but there is relief from the stocks and also bonds. in the bloomberg you can look at cvs. this is not necessarily bonds but insurance on the possibility of a default. you can see a small move lower, seven basis points. look small and move small but it
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is the biggest in four years. going better this company will not go into default. guy: how does it compare to its peers? abigial: they are doing much better. this space has been under pressure. they raised their outlook. that is something the competitors are not doing and they're not closing stores and focusing on cost cutting. they are not in damage control. they are focusing on their strongest stores, making it a seamless health care experience, bringing all of the different segments, the pbm, the insurance, the prescriptions altogether. the shares are lower on the year, down more than 15%. no be interesting to see if they continue to do as well as they are going. they raise the outlook a second quarter in a row. vonnie: abigail doolittle with our stock of the hour. cvs, the second-best performer in the s&p 500 right now.
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guy: time for the bloomberg business flash, a look at the biggest is the stories in the news. let's start off with the u.s. secretary of state mike pompeo. he has teased a potential run for the white house. he weighed in at the economic forum in washington in an interview with david rubenstein. experience is that when someone gets close to president and see the drop of close, they say i can do that job. has that occurred to you? would you have any interest in running for president at some point in your life? >> i try to answer this consistently. i've never been able to predict what my next gig will be. america has given me an awful lot. if i thought i could do a good turn, there's nothing i would not consider doing for america. guy: let's call that the diplomatic answer. you can watch all that interview with the secretary of state on the david rubenstein show airing
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at 9:00 p.m. in new york on bloomberg television. iron ore has extended its epic selloff. prices fell as much as 7% in singapore. hasu.s.-china trade war hurt investors appetite for raw material. -- the ago, iron ore price is now fallen into the 80's. and that was your bloomberg business flash. vonnie: the pga tour returns to the east coast with the northern trust tournament at liberty national golf club in jersey city and also marks the start of the three-week run that makes up the fedex cup playoffs. i spoke to brooks koepka after a practice round and the psychology of winning, a condensed season, and more. brooks: i know how to approach it. i know i am playing and
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practicing. if i do week off in a regular tour, i'm not practicing, i am home relaxing and taking it easy, show up on tuesday and start practicing your majors i'm usually playing the week before, getting there and figuring out the golf course, get a good game plan in. vonnie: it is not that easy. there are only a handful of people that when the major events. lots of people win tournaments and they're all amazing golfers, but major winners are something extra special. is it your caddy? brooks: ricky is awesome. it is simpler than people think. they overcomplicate things and put a lot of pressure on themselves when they don't need to. it is actually a lot easier to win than people think. vonnie: careerwise, what are your ambitions now? brooks: keep winning and keep doing what i'm doing, playing well the past two or three years and for golf you are hitting
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your stride right now. hopefully get out there these next four or five years and try to make as much hey as i can and keep winning majors. when you look at a golfer that does a lot of data analytics, everybody has a different methodology, some of the successful golfers have serious methodology, does it seem funny? does it seem over thought? it works for them. you have to find out what works for you. when you understand yourself and how you play golf and what works for you, then everything starts to click. i think that is why bryson has done so well. he has figured out what works for him. for me is to keep everything simple. it is nothing to get too focused on. i do not think about anything when i'm playing. i try to see the shot. vonnie: you watch the stock market at all?
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brooks: i have financial people. i meet with them probably six times or eight times a year. i was just with them last week. we are always looking at it and seeing how things are going. hopefully continues to do well for me. vonnie: you get worried on a day like yesterday? brooks: i saw yesterday went down pretty good. no. i think the dow was down 2.79% or something like that? i keep track. what was the best business advice your forgot? brooks: -- you ever got? brooks: do not be stupid with your money. it is so cliche, but it is true. vonnie: he makes everything seem easy. that was brooks koepka. you can watch the whole interview online. this is bloomberg. ♪
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vonnie: it is time for our global battle the charts. you can see these charts on the bloomberg by running gtv . kicking things off is eric balchunas. eric: what i have is dollar volume. this is a new school fear gauge it is better than the big because it includes retail investors. volume goes up when people are worried. spy hasook this year, yet to see volume the clips the $60 billion mark which denotes a major freak out. last year we had three because there was that fear. it does not happen that often. the point is there is a big difference between a trite or selloff and affect your selloff. trade wars are more like flesh wounds. fed fears are existential crisis. in 2008 there were several days above that level. if there is good news, it is that people are not panicking, at least according to sfy volume. vonnie: a fascinating chart.
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guy, what you have? guy: what will it take to stop the brent drop. brent is in a bear market and we continue to see things going down. the question is what will stop it. not this chart. the white line is brent. the things you would have stall -- you would have thought would stabilize the brent market are not working. the yellow line is the u.s. rate count. we not seeing crude coming out. i appreciate that rates are becoming more efficient. that line is going down. that is not helping the price of crude globally. that is more of a wti story, but it still beats back in. the blue line is a great story. it is the opec crude output story and that has been going down. neither of these lines are indicating we will see a turn in rent. they should be helping out that they are not, and brent keeps going down. vonnie: i like that chart as well. you can see both of these charts
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on gtv . today my pick for winner is eric balchunas. that was a fascinating observation. remember to watch etf iq with eric balchunas at 1:00 in new york, 6:00 london time. coming up, "balance of power" with david westin. he will speak with the architect of obamacare. that is coming up. we are in selloff mode when it comes to equities, and buying mode for bonds. the major indices are all lower. vixear around 1.63% and the continues to be elevated for another day. this is bloomberg. ♪
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david: from bloomberg world headquarters in new york, i'm david westin. welcome to "balance of power," where the world of politics meets the world of business. on the brief today, peter coy on what the markets are telling us about a possible recession. kevin cirilli on president trump's trip to el paso and dayton, and from london, emma chandra on the foreign secretary's visit to london. we are talking about the three-month versus the 10 year, which is not just flat, it is going south. what does that tell us about a possible recession? peter: since may the yield on the 10 year treasury -- it has been since may that the -- what that means is investors are simultaneously viewing the central bank rate which is the short end of the curve being relatively high and the longer yield, the 10-year being lower, which means either

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