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tv   Bloomberg Markets Americas  Bloomberg  August 2, 2019 1:30pm-3:29pm EDT

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direction, another is going in the right direction. debt to report two years and caroline: breaking news coming allows the u.s. government to spend more on defense and domestic programs. from p delaying him. the measure received final he is saying the radcliffe is no approval when it was passed by the senate on thursday. longer his pick fokevin, your r? the measure suspend the debt limit through july 31, 2021, eliminating the risk of a default until then. it also sets budget caps for two was an early years that will permit $324 billion in additional domestic frontrunner to replace the and defense spending above the director of national intelligence. current cap levels. there is a lot of question around what is likely the role in new york, a judge is recommended in new york city police department fire officer of dni will be in 2019. daniel pencil layout. this was created after seven the he is accused of using a -- september 11 to make a voice chokehold in the 2014 death of for the intelligence community, eric garner. a public referee in terms of weekswyer will have two advocating for more budget money a lot of these to submit responses before police commissioner james o'neill makes a final decision on punishment. intelligence agencies. with radcliffe out, the question puerto rico's governor ricardo resignation takes becomes who will replace him ? effect at 5:00 local time today but his successor has still not that is certainly sets to be the been chosen. talk of chatter in the intel lawmakers have delayed a vote until monday after rosello's world.
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radcliffe was a front runner, choice for the job failed to get and many people were thinking it would be a done deal, so this is enough support from the islands governing body. a surprise. cirilli, thank rosello stepped down after weeks of massive protests. the italian prime minister held you for jumping on that news for talks in rome today with ursula us. we will bring you president trump's comments on eu trade in von der leyen, the new president washington as soon as he makes of the european commission. an appearance. all of this means that there's a their discussions will range from climate concerns to the lot of factors weighing on migrant crisis. during a news conference, markets this friday. trade concerns are top of mine, with u.s. economic data. jobsyers added 164,000 launder land said and there is no civil solution to the migrant issue in europe and that more last month, shy of estimates but burden sharing is needed. fact thatare of the in line with consensus. the mile -- meanwhile, the 3.7%.oyment rate held at countries like italy, like greece, spain are in an exposed geographical position, so we let's bring in noel corum -- have to take that into account and solidarity is needed. noelle koran from invesco. of course, solidarity is never one way. two ways. what is most consequential in terms of how you position your portfolio? elle: we are thinking more if we work together, we will find solutions to move forward. mark: the prime minister discussed italian citizens' long-term, so the fed is more
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focused from here. after the fed meeting -- i do not want to get too much in the mistrust toward europe, saying weeds, but the front end of the that europe will need to work harder to offer concrete and appropriate solutions for the curve had some price cuts out urgent needs of italians. flattened10's 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 mark crumpton. significantly. this is bloomberg. that is telling a pretty big story. it is telling a story that the market does not think the fed is doing enough. of course now, the geopolitical things that have happened have pushed that up a bit. longer term, we think that the go another time in 2019, and that is just on a basis of growth coming in around 2%, which is consistent with the >> live from new york, i'm payrolls that we saw today. and inflation is not going anywhere quickly. that meanwhat does vonnie quinn. live in toronto, i'm amber for the dollar and investment kanwar. opportunities? we are joined by our bloomberg we are looking at emerging markets going flat at the moment. and bnn bloomberg audiences. look at the msci emerging market u.s. stocks are careening index, the worst day in the year since the december toward the worst week of 2019 as selloff. noelle: we think that the dollar
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investors fret over president is positioned to see some trump's latest tweets on tariffs. strength year, and that is we will keep you updated on market movements. largely because of the looming risks that are out there. even aside from trade, we have and mounting risk to the u.s. economy, the latest jobs report brexit and european growth shows pressure is in retail, hererns, so we like credit particularly manufacturing, as president trump friends to boost tariffs on chinese goods. more in the higher quality stuff, but positioning with a and an expressive interview with andy purdy, the chief security long dollar as a hedge against your credit. scarlet: you mentioned the officer of huawei, about how the flattening yield curve in the u.s.. if you look at what is going on trade war is hurting their bottom line. in germany, the entire yield let's get a check on the major curve is negative. pretty indices. consequential for europe, 500, a 90-point because everyone needs to go further out on the risk spectrum to get some yields. drop from earlier this week. does it change anything that you down 1.2%. the nasdaq is the one beating do or how you think about what you are going to be doing? noelle: if you think about wise, it isth them all, down 143 points. starting from a weaker spot than 1.5%. the rest of the world. it is down a lot more than the that is certainly something we other industries mainly on chips are watching. time, we like and related companies. yield, 1.72.
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let's look at some currencies to european assets, and that is largely due to the ecb. show these market moves. we think right now they have the the yen, 106.53. willingness and readiness to act, and we think they will do so in q3. we will see if it tests the 105 caroline: we have seen an mark. appearance from trump. the yuan up. anything?pecting elleill be sticking in --now it was stronger earlier. amber: a good picture of the world trading today. will be sticking with us, but let's listen in. let's take a look at the world we are living in. president trump: a wonderful deal for wonderful people. today, we are signing a trade $14 trillion worth of negative yielding bonds. bonds that you have to pay to agreement that will make it own. easier to export beef into the high,s a record european union. we have been under negotiation accelerating much of this week for quite a while, and our beef on the back of those fed rate farmers we did not feel were cut but also those trump tweets, being fair, but the european and a long way from zero, where union stepped up and we we were in 2010 and 2011. appreciate it, and we have great representatives here with us today. this is a tremendous victory for the world has shifted in quite a dramatic way, in a very short american farmers, ranchers, and period of time. we are seeing market today at european consumers, because american beef is considered the least tried to grapple with best in the world. that.
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we are delighted to be joined also trying to grapple with some economic data. to addployers continued today by ambassador robert lighthizer, deputy secretary of workers at a healthy pace in july. ki,iculture sense wage gains also picked up. it underlines a solid labor market, as president trump threatened more tariffs on european ambassador to the chinese goods. united states, stavros, and i -- and the joining us to talk about the jobs data in julia coronado, president of macropolicy perspectives. representative of --. let's try to marry some of the storylines. i also want to thank john onwe fear, increased tariffs hoeven, my friend, for being here -- john, where is john? a basket of goods currently not good job, john. subject to duties. tariffs have been in place. along with the president of the it is seeing any evidence natural cattlemen's beef you,iation, thank affecting the manufacturing, transportation, warehousing her, jennifer, and the ceo of the when it comes to job gains? united states meet export federation, dan hellstrom. julia: first of all, yes, the you very much, job gains were in line with congratulation. the agreement we signed today expectations, but came with more will lower trade barriers in than 40,000 in downward europe and expand access for american farmers and ranchers in revisions in the prior months. on a six month basis, we are your one, duty-free american beef exports to the european adding just 140,000 jobs a month. mildis fine, enough to put
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union will increase 46%. over seven years, they will downward pressure on the on implement rate, but a lot slower increase by another 90%. than the 233,000 at the in total, the duty-free exports beginning of the year. will rise from $150 million to where is the slowing happening? $420 million, an increase of exactly where you mentioned, over 180%. manufacturing, which has slowed dramatically from being a big my administration is standing up for our farmers and ranchers sector of job gains to barely eking gains right now. trade and transportation. like never before. we are protecting our farmers even leisure and hospitality. and doing it in many ways, including with china. that is more worrisome because you may have read a little bit about china lately. we look to the service sector for the domestic resiliency. agricultural products and tot is a sector that is tied exports have increased by more than $10 billion, and beef discretionary spending, tourism. exports have increased by more the fact that we are seeing that sector slow a bit is something than 31%. in another major win, we fully to keep an eye on. vonnie: but it is all good opened the japanese market to because the fed cup rates by 25 u.s. beef. we have also opened markets in basis points, so therefore those tunisia, morocco, and australia -- i think you are pretty happy yields will come back. i detect some doubt about about all of that, right? you have never seen anything happen the effectiveness of that cut. like that before, have you? the fed is trying to get ahead of these negative sentiments that may take hold. not with other presidents, you have it.
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we are reducing burdens and the way chair powell described it was short circu not, it regulations that unfairly impact agricultural producers. when our farmers became the victims of unjustified, retaliatory tariffs from china was working pretty well, markets and other countries, we provided were well supported before this $40 billion over a two-year latest escalation in the trade period -- $14 billion over a war. i think there is a strange game of chicken between chair powell two-year period in relief. and i signed a farm bill that and president trump right now, but dangerous for the u.s. economy. provides our farmers with the amber: your job is supposed to kind of certainty that they need be forecasting macropolicy. , while supporting increased you have had a long career agricultural exports. forecasting economic growth, the agreement we are about to sign keeps one more trying to model things out. how would you put these past couple of years into context and perspective for us? promised to the great patriots of american agriculture. are indeed patriots. it seems like these outcomes are very binary. how do you make predictions based on that? julia: trade policy is one of they are always targeted first by other countries to take advantage of the united date. the hardest things to model and the first to be targeted, but we take the target off their backs. build into a forecast because it isning markets for farmers doesn't matter until it matters a lot. about more than an industry, it we try to measure uncertainty is about a way of life, generations of hard work,
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and how it translates into investment decisions. passion, and dedication have gone into making america the it is a very imperfect relationship to hang your hat on highest producer of high quality beef than anywhere in the world from the forecasting perspective. we do the best we can to look at by far. we are proud of our farmers and the tea leaves, bottoms up, how ranchers, we love our farmers and ranchers, and with this are businesses feeling, where announced it, we take one more step in giving them a level are the most discretionary sectors. playing field that they have so far, the u.s. has been pretty resilient. we have had some nice fiscal been looking forward to for tailwinds to keep the u.s. on many, many years. they want a level playing field. track, we have seen the slowing that is all they want and nobody in manufacturing but not can beat them. thank you all for being here. contracting the way it has around the world. it has been a good story to i would like to invite a very great gentlemen, a friend of date. but again, when do businesses mine and someone who has done a fantastic job for our country -- throughout their hands and say ambassador lighthizer -- to say we cannot make plans for the future amenities changing rules of the road. a few words. we will follow that up with some of the very high officials from the sectors most exposed to global supply chains are feeling that pain and difficulty in the european union. thank you very much. bob? lighthizer: thank making those decisions. vonnie: ironically, we have a flatter 2/10 spread that we have you, mr. president, for being here today and for your leadership in making trade policy work that are for all had in a couple of months. americans, but particularly for what are your forecast for the economy, 10-year yield? julia: we have growth slowing to our farmers and ranchers. i'm pleased to be joined today
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here by the deputy chief admission of the embassy of below 2% in the second half of the year. finland, the eu member state that is a pretty pronounced slowdown from what was just about 2.5%. we will feel that across a broad that currently holds the presidency of the council of the european union, and ambassador range of sex yours. , the ambassador from the we have seen investments flow already both in real estate and eu. capex. what we saw in a jobs report was this agreement will nearly triple the duty-free access of slower growth in hours worked, american ranchers to high-quality beef in europe. initial estimates indicate that u.s. beef will grow by over $270 and that translates into slower growth in take-home pay, a little more moderation and what million a year once the agreement is fully implemented. has been a pretty boy apace of consumer spending. that is what we will see. exclusive,ew, the fed will move gradually and methodically, another rate cut country specific quota, american ranchers have a guaranteed market share in europe. we look in september, perhaps another in october, to keep that sentiment forward to the european union on track. approving this agreement as you've noted, interest rates expeditiously. are very low, negative yielding debt everywhere. it is not a problem with expensive financing. >> mr. president, ambassador it is more the availability and
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that risk sentiment to continue lighthizer, ladies and gentlemen, i am honored to be going out there and doing business, taking risks, hiring one of the signatories of this workers, making investments. eu-u.s. beef agreement. that is what we are trying to keep on track, what the fed is trying to keep on track. i think the u.s. still has a [inaudible] good shot but a lot of it for the usa. depends on how this chinese-u.s. provides a solution to a relationship plays out from here. lands at ther this long-standing dispute in the feet of consumers, which you wto. mentioned, could potentially of how a great example slow down in the back half of the year. questions as to what extent they the multilateral trading system can work for settling trade will bear the brunt of this tariff increase on goods that are more geared toward things disputes. with this agreement, the eu that they purchase, apparel, technology. reaffirms its agreement to a thatder to what extent is trade agenda and nuvasive blunted by the appreciation in the chinese currency? julia: to some extent it is. eu-u.s. relationships. the agreement will be announced i don't think it is a direct impact of the tariffs that would to the european parliament and we hope that we will gain the take over the u.s. consumer. at the end of the day, these are confidence as soon as possible. i would also like to highlight modest increases in retail the strengthening of eu trade prices as a result of the tariffs. with the u.s. is a priority of
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it is more, does it add to that the european union. sense of caution on the business finally, i think all the negotiators on both sides for cycle as a whole, does that lead to greater caution? their inputs. thank you very much, and thank we have already seen the savings rate among u.s. consumers stay you, mr. president. president trump: thank you very much. [applause] really high and actually move mr. president, ambassador higher, even though the labor market gets better and better. that is not what we have typically seen at this stage of lighthizer, dear friends from the cycle, particularly given the american parliament community, ladies and gentlemen, where equity and home prices today is about delivering real, are. where -- a telltale positive, tangible results in the transatlantic trade sign where consumers are feeling cautious, and with relationship. companies and farmers make more money investing in trade with better prices, may moderate their spending. each other than we do with anyone else in the world. it is not great to see these scarlet: you are watching a live tariffs ahead of holiday season. conference at the white house, where the president says he is back to school is your last shot signing of the agreement with at cheap goods, and then you'll see higher prices. the european union. consumers have already been according to robert lighthizer, price-sensitive, so that does the eu has to approve the beef agreement with the u.s., but that is forthcoming. not bode well for a great holiday season. you are watching that take place vonnie: mattel and hasbro down in the white house. if you want to continue listening, it is available on for that very reason today. bloomberg at live .
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julia coronado, thank you for joining. equity indexes losing at least coming up, from threats against .6%. with to striking a deal from new york, this is bloomberg. ♪ the european union. how president trump got to yes on agreement from the europeans. this is bloomberg. ♪
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caroline: china is vowing to response to president trump's threat to impose a 10% tariff on the remaining $300 billion in chinese imports starting september. we spoke to larry kudlow about the potential impact on the move amber: president trump is -- of the move on consumers. larry: our experience and our modeling suggests that expected to make a statement about the european union and the u.s. trade shortly. in the meantime, no shortage of consumer impact will be very, news on the u.s. china trade war very small, and the biggest burden in economic terms is front as the u.s. announces it will impose a 10% tariff on $300 weighing on china. here with more is billion worth of chinese goods beginning september 1. jordyn holman. beijing not surprisingly very, very small. that is not what a lot of
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pledging to respond. with the latest is jenny spectators are saying, from leonard, who has been following the story. electronics, apparel, footwear. maybe we can start with europe. jordyn: the apparel companies, what off the shock of shoemakers, they say these are trump announced yesterday on twitter, perhaps some anxiety about what he could say about attacks on american consumers, europe and potential targets. that a lot of retailers will have to raise their prices to be able to handle those tariffs, what are we expecting him to say today about the eu? >> what we expected a is and it will be the first time that americans will actually feel iteris like this. scarlet: we have heard also from actually happy trade news, the companies in china that especially for u.s. farmers who produce a lot of these goods, how this will be bad news for have borne the brunt of all of factories there, for companies there. his trade wars, they have been exporters hasgest subject to retaliation not just from china but the eu. made really clear this is not good news for them. jordyn: right. think back to steel and aluminum because of these tariffs they tariffs. are going to place on september canada and mexico retaliated against him. 1, the peak holiday shipping this will allow u.s. farmers, beef farmers more access to the season, everyone is getting goods from china and that will eu markets. impact both chinese companies who are trying to deal with the this was a long-standing dispute, so not necessarily news. shipping elements, but also the retailers here in the u.s. who in this environment, actually need to take that. that is another reason consumers something good for the trade will feel that, because they are shopping for the holiday season.
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agenda with the european union which is really flawed. caroline: and we have toys just a couple weeks ago, trump friend tariffs on french wine. getting thrown in there ahead of the holidays. some of the stories had been put on frenchned tariffs out showing this will not just wine. any hope that this will affect u.s. consumers and companies, but european companies as well. talk us through how that occurs? jordyn: you have lead to other agreements, or is this just a signifier? >> this is a standalone deal. companies like adidas, based in ear adidasnd we w i wouldn't say this would give us hope that they will reach a deal. they have the same sticking shoes. they have to figure out how they points they have had four months, the european union. get their shoes to the u.s.. their supply chain will be it's about farmers, agriculture is the biggest sticking point. thrown into flux with these tariffs. haveet: and some companies france and other european tried to do workarounds, moving countries don't want to include that in the talks. production to vietnam or other ivestor lighthizer says countries. you have written an article cannot negotiate with you if you about how coach bags are stuck don't give me anything for the farmers. basically we are still at the in a port in vietnam because same standstill oink. they cannot get out. companies are trying to get this is good news for some in ahead of what is happening, but the u.s. a big agriculture was getting caught in the back watch anyway. jordyn: if you talk to retailers , this has been on their radar sticking point when it came to the u.s. and china.
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for some time. they are looking for other even as we hear the war of words places where they can move their heating up on both sides, is products, but it takes a lot to there any signs to suggest move the supply chain out of china, because you could move to vietnam or cambodia, but they planned meetings between the two nations are being derailed as a result? >> we don't know. are not as mature as what you have seen in china. if you are ordering a coach we have gone to a point where , it mightoach bag the plans could be derailed. china responded a course to the take longer to get that. that is another challenge these threat bys tariff retailers are facing. will the companies saying that they would have countermeasures. they have not given any details. bear the burden themselves, or that has also been the case in will it pass it on to the consumer? the previous rounds and china jordyn: all of them are indicating that they would have to past the price on to always hit back. for president trump, now it's the consumer. all about 2020, looking at, does steve madden said, we are planning on raising prices on our shoes and handbags to deal with the situation. caroline: scarlet: bloomberg he want to be the toughest president ever on china, or get a deal, again going back to the retailer -- scarlet: bloomberg retail farmers. reporter jordan -- for president trump, those are his loyal supporters, so he really has to plan this out long jordyn holman, thank you so term. vonnie: is there an offramp? much. the rally in chancery's larryyou look at what continues, this is -- treasuries continues, this is bloomberg. ♪ bloomberg. ♪
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kudlow said today, there could be. there could be something the chinese do in the next month. i agree very much that one month is a long time in the trump era, so we could see a shift in the next couple of weeks. bit more be a little than what china has been doing so far since the g20 meeting, purchases of agriculture goods have not in politically significant for the president. they really need to up their game on that front. we will see if they really want to have the september meetings, may be an offramp before then. you mentioned the 2020 election and many have been looking at this as more than just a two-way battle between the u.s. and china but also including the federal reserve, ensuring in this battle will escalate, we will have to see further rate cuts. to what extent is the fed being ensnared in this as trump is eyeing reelection?
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>> we will see what will happen next month at the fed. this was definitely emboldening trump. some analysts say he looked at what the fed did and said, i am going to stick it to you and show you that i can go this route. last night, when we saw there was an eu tradereally the presig at, i will not be the president that got stalled by china. harm tomakes me do some my own people, then that is ok. that is what president trump's opinion is right now. vonnie: jenny leonard, thank you. of course, we will bring you president trump's comments as soon as they happen. i'm all about my bed. this looking ahead to berkshire etherway earnings and wha mattress is dangerously comfortable. when i get in, i literally say 'ah'. experience warren buffett can sustain the profit streak. deeper rest with the this is bloomberg. ♪ loomberg. ♪ award-winning leesa mattress.
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mark: i'm mark crumpton with bloomberg's first word news. hong kong is bracing for four straight days of protest. unrest is growing, with violent clashes downtown last week between ryan police and demonstrators. protests began it nearly nine weeks ago over opposition to legislation easing extraditions to china and demands have since widens to include chief executive carrie lam's resignation. u.s. employers added 164,000 jobs in july. at unemployment rate sits 3.7 percent, the lowest in half a century. average hourly earnings are climbing, wages up 3.2% since last year. the federallongside reserve interest rate cut and the trump administration's announcement her increased tariffs on chinese goods. adviseruse economic larry kudlow says the trump administration will impose new tariffs on china next month.
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>> our experience and our modeling suggests that any consumer impact be very, very small and that the biggest amber: this is bloto. uncertainty in economic terms is vonnie: i'm vonnie quinn in new york. falling on china. mark: president trump first we have beenrter earnings from announced the move at a rally yesterday. berkshire hathaway over the illinois state senator has weekend. the question is whether warren buffett's railroad will extend been indicted on federal charges that he took more than $250,000 in salary and benefits over a its fourth-quarter profit streak. from hisr period our bloomberg news finance reporter is with us now. is it all about the nsf? teamsters. >> a lot of it. the u.s. attorney's office in chicago says that them a credit state senator thomas cover 10 given berkshire breadth, it may has been charged with 39 counts of embezzlement. global news, 24 hours a day, on not drive down earnings a time, air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. but it will be interesting. csx said it was a very puzzling economic backdrop. i'm mark crumpton, this is bloomberg. there is still economic growth. slowing but still there. yet, the railroads are seeing pockets of weakness. part of that is the trade situation, part of it are someone else. increasing trucking competition, bloomberg's world the fracking been was different
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than it used to be. it will be interesting because if they can maintain this headquarters in new york, this profit, it gives a good sign of is bloomberg markets: the close. i'm caroline hyde. scarlet: i'm scarlet fu. their ability to whether potential slowdowns in the industry. it is time for your bond update. across his you look let's bring in lisa portfolio, it is hard to find bright spots, given the current abramowicz. seeingou are certainly environment, whether exposure to this in pockets of equity the insurance market, whether it markets, but certainly in bond is what has been going on with markets, investors have been gravitating towards risk, but kraft heinz, or is big exposure even more towards those safest to financials. yields comingy now this lower and lower interest rate environment. are we expecting anything to be down, what you are talking about with german bond yields. take a look at the total return a home run bright spot? of investment grade bonds versus >> it could be a bright spot if high-yield bonds. year-to-date, investment grade you see his cash increase a bit. bonds, which are links to treasuries, have returned more that is also a negative spot 11.5% gains on, ironically for berkshire. as he keeps piling up that cash, more fun for him to deploy. the next time we see an economic downturn, he may be able to swoop in. the investment grade bonds versus 10.5% on high-yield. but ironically, it is kind of a bad thing. it underscores this whole challenge that buffett has had investors are demanding a wngnificant premium to o
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in finding good ways to put a lot of money to work at high-yield bonds over investment reasonable prices. grade. vonnie: remind us how this all plays out. this has narrowed from the highs, but it is still historically high post crisis, which i find really interesting. analyst don't really get to ask questions in earnings, but we in other words, even though investors are being pushed into may learn some new things about berkshire or warren buffett. it will come tomorrow morning riskier debt, they are offering up some discretion, saying we want to be more sensitive to companies who can withstand a at 8:00, but he doesn't give a downturn, even as the music is call, so everyone will hunker down and go through his 10-q. still playing. caroline: thank you, lisa. that will be the focus. we will take deeper into that then it is sifting through and theme. are court that investors seeing what you can see is looking to limit lending to different, may an indication of where businesses are headed, whether it is the railroad, riskier companies. geico, the growth they're at lower rated potentially moderating. everyone will be parsing for details. thet heinz handed him to blue-chip bonds and the riskier jumped at. -- riskier junk debt. viewer curveballs in the past year, and they have been big ones. it will be interesting to see if is slightlybt that much happens there. less risky is outperforming, but young, anyears you are seeing on the bed of -- back of the fed rate cut, investors are getting pushed indication that we will hear down the quality curve.
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anything about succession? >> people would love to hear >> that's right. more. one thing that is key about the cuts, for corporations, that is a sign that the music can keep it is kind of a mystery as to who exactly will take over. buffett has been fairly quiet. playing. if you are in corporate earnings and corporate leverage, you can i have a feeling it will kind of stay that way even though he is maybe go take a little bit more approaching his 89th birthday risk, look at the triple b soon. vonnie: thank you for joining c's if youple us. good luck. i'm sure that you will be up a play high-yield, because that is little earlier than tomorrow where we are seeing on morning. performance right now -- underperformance right now. let's get a check on the major scarlet: and there is a lot of indices. supply to choose from as on treasuries we are still lower well, because july was a big but not adding to those losses. the s&p 500 holding around the month for high-yield debt issuance. claire: you would expect there 29.20 mark. to be a slowdown, but we have worst performer is still noet not seen that. one of the busiest july's on record. we are hearing from our banking sources that august is going to be really big as well. the enticementus hewlett-packard, and some of the other computer services companies. towards high-yield or higher the nasdaq down 1.3%. risk? of course it is the yield, but i the 10-year yield, 1.87. did not realize that maturities the two yield, 1.72. were slightly distinct as well. amber: for all those that >> investment-grade high-yield, you think about long term
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returns, 30 year bonds, and those do well in times of lower thought they could take an early vacation after the fed rate cut were mistaken. we are awaiting president trump rates. if you want a shorter maturity, and his new announcement you are lending to a risky potentially on an agreement with the eu on beef. company, that is typically what you see in high-yield. the average maturities are much we will monitor those lower. scarlet: how much lower are we developments. talking here? you will see them in the if you missed any of the charts on the program, you can always v .em on gt v three to five range, very rare that you see a bond longer than 10 years. investment is a huge pension this, so companies are incentivized all the way up thank you for watching. this is bloomberg. ♪ the curve. caroline: given that you are so much lower in europe and japan, are we starting to see an interest in other bond currencies, or is it too difficult, given the fx market? claire: there are a lot of buyers coming in and out of the market. right now, the u.s. is pretty much the only game in town. we see a lot of bids from tnese, or europe. that arent yields positive, you might have to have some u.s. assets. someet: when you talk to
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people, like investors at goldman sachs asset management, are they giving indication as to if they are nervous that things long? jayon this powell was reluctant to say what the outlook is. he did not say it was the beginning of a long cutting cycle either. andre: what i hear over over again, we have to be discretionary and understand the story, because there are bumps in the road. you are seeing that in energy. companies are struggling, crude is lower, but maybe play a safer industrial bond or something like that instead. they say it is about credit picking. caroline: credit picking. where in the credit raising areas have outperformed this wednesday? be's have done well this year, but we are seeing a bit of caution in the end. in terms of lower rated , that ise triple c's
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seeing some underperformance right now. scarlet: and what are you seeing in sectors versus geographies versus the brand names of companies. postbank earnings, a lot of investors are looking at bank loans right now, feeling good about asset quality and some of those big metrics that they look for there. that is very popular. if you want to go safe, it is this countercyclical, industrial names you might look at. the favorites right now are probably oil and retail, the same old stories we have been hearing. caroline: we have not seen a point with negative yielding with the north american government bonds or even corporate bonds, but is there a point when a triple c cannot be appetizing anymore? claire: when things are really risk off, what do people sell? they sell triple c's. that is a leading indicator for us here. for us, it seems like people are willing to go down in credit quality if it means getting lower yield. scarlet: it seems like people are continuing to go down that
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path. mark: i'm mark crumpton with bloomberg's first word news. first, this programming note, we are standing by from comments for president trump -- from president trump. presumably, the president will be discussing tariffs and some of the comments he made at his rally last night in cincinnati, ohio. that's coming up in a few moments.
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in bangkok, thailand, secretary of state mike pompeo is defending the president's decision to impose new tariffs on chinese products, announced yesterday. during an exclusive interview today with haslinda amin, secretary pompeo said china has been taking advantage of the united states for decades. >> it cannot be the case that a nation has protectionism to protect its own goods and uses predatory taxing to deny other economies the chance to grow. mark: secretary pompeo added, china can come back to the agreement that is on the table. north korea has fired more of -- more unidentified projectiles into the sea. this comes after the country declined a chance for talks with secretary of state pompeo. a reviewr has ordered of the pentagon's cloud computing contracts. this comes after president trump said that amazon was given "an unfair advantage."
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the contract could be valued at as much as $12 billion. governingson's conservative party lost a special election today that votes the party with a one working majority in parliament. it was the first electoral chance for conservatives since johnson took office nine days ago. johnson says britain will leave the european union on october 31st, with or without a brexit divorce deal. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton, this is bloomberg. caroline: it's 2:00 p.m. in new york, 7:00 p.m. in london. live from bloomberg world
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headquarters, i'm caroline hyde. scarlet: and i'm scarlet fu. caroline: u.s. stocks head towards the worst week in 2019. look to president trump's escalation on the u.s.-china trade war. and trade war affects still in labor data, with trade and factory jobs taking a hit. in its worst week in four years. all that and more, coming up. so much more, awaiting president trump at the moment. we understand he is going to make an announcement that has to do with eu trade, something to do with the trade of beef. we have life shots of plenty of ranchers, potentially, standing by in their cowboy hats. scarlet: they are running a little bit late. this wasn't supposed to start at 1:45 p.m. -- this was supposed to start at 1:45 p.m.
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and some news on copper, copper compelling to a two-year low on the london metals exchange. commodities have had a rough week, as there have been plenty of surprises, whether it is the way the federal reserve characterized future rate cuts or president trump's tweet yesterday afternoon about getting ready to impose 10% tariffs on $300 billion of chinese goods. caroline: a brutal 48 hours for traders of any asset class. a brutal week for the s&p 500, not one day of gains. this is the worst week of 2019, all the way back to december? scarlet: for a while, it was like the jobs report -- who cares. inconsequential. 134,000 jobs added, in line with consensus. u.s. stocks have fallen every day this week. caroline: and the dollar is parrying with some of the gains we have seen over the past month
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or so. most ofar is lower, and the major currencies after the chinese embassy tweeted back opposition to the new u.s. tariffs, being made clear that they will take necessary countermeasures. scarlet: and a bounce back wti after yesterday's losses. let's take a deeper dive into today's action with our reporters. abigail, what are you watching? abigail: i am looking at the emerging-market equities. we have risk assets selling off, but selling off into the fed this week and the trade war headlines yesterday and today between president trump and china. the emerging market now down eight days in a row, so this is out on the risk continuum. you could say some investors are unloading risk ahead of the fed and ahead of the trade headlines. 5%, having its worst day of e.m. investors are not liking the messaging around the trade war.
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equities, and the s&p 500. earlier this year, both of these assets were up higher, recovering from the april volatility, but the s&p 500 started to break away, losses lower, and liquidity concerns. at this point, the s&p 500 still up more than 16% on the year -- that is great -- but the emerging markets now up a little more than 3%. perhaps the weakness is a bearish tell at some point for the s&p 500, renita, certainly something to keep in mind. renita: thanks, abigail. i am looking at commodities, which have been roiled by this week. the federal reserve and the latest u.s.-china trade spat, but take a look at this chart. soft commodities are under pressure. it dropped to a two-month low. prices this week also faced pressure from the u.s. dollar strength versus the brazilian which boosted the appeal of sugar and coffee prices. if you take a look at this next
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chart, you will see that cotton, on the other hand, tumbled for the second straight day, down to a three-year low. is theway, the u.s. world's top exporter of the fire and china -- the fiber and china is the world's biggest consumer. luke? luke: today, we know that volatility has picked up. the vix up again, but i want to tut in perspective the exten that this is a macro scare or something that might dissipate quickly. i am looking at one month vol , capturing the tariff increase deadline. etf embeds cap currency risk and chinese equity risk. it is up, but nowhere near highs of the year or where it was during the early 2016 scares. yourower line is jpy, classic macro pair, and a lot of
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sensitivity to chinese growth. toher two things are going happen. volatility will pick up as the tariffs that are supposed to be the ones that hurt get closer and closer, or perhaps to front run the announcement that we are going to get from trump soon, perhaps the traders think the president is all hat and no cattle on this file. stillne: and we are awaiting the announcement from president trump. luke and the markets team, thank you. president trump expected to announce a deal to opened it eu up to more beef exports. let's go to kevin cirilli, live from the white house. kevin, what do we end up taking from this enhancement? kevin: we are not talking about castle at the white house yet, usmca might be if the gets ratified. president trump threatening to post 10% tariffs on $300 billion
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of products, and the chinese threatening retaliatory tariffs. trump expected to make an announcement about opening of markets in the eu. while one relationship appears to be taking a wrong turn, there is another trade negotiation that is going in the better direction. this comes following the tense relationship with our european allies, particularly as it relates to auto tariffs.
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it's time for our stock of the hour, and it is beyond meet. shares are in a bear market, falling with a percent this week alone, even with today. for more, let's bring in abigail doolittle. look at how they haver market, done since the ipo, it is a win. abigail: up from the highs of the ipo price of $25, but down this week about 25%. the reason for the move lower this week, the bear market theyn that huge move up, announced the secondary offering on monday. they put up a decent quarter on monday, but announced the secondary offering. that caused the stock to tank. wednesday, they price it at $160 per share, and the stock inched
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closer to $200, a 20% discount. last week on friday, $234. all of the sudden you have that cheap supply on the market, but you have to wonder, what are they seeing that they are taking chips off the table. that it could be that huge move up. who wouldn't want to cash in on that type of a move? caroline: and it is interesting, there were some other headwinds blowing towards beyond eat this this weekyond meat and possible foods, it's competitor. how much do you think this is down to the discount on the pricing are the fundamental issues? i think it had been the discount, because the stock had been at $200, and they put up a decent quarter. a beat sales by about 30%, the outlook is good. the streets come into your point, is neutral. there is even a sellout on this thing. if we take a look at where the street is, it is getting better,
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but there is still a pretty decent bit cap. in blue, that is the average price target. we see initially that they were rising together, but take a look at last week. 230 four dollars, the average price target before that quarter. $134 spread is closer to a $50 spread now, still not great, the fundamentals might be ahead of themselves, but closer to the $160 share price of the offering. scarlet: clearly a lot of skepticism along wall street analysts. with the outlook contact. abigail doolittle, thank you so much. sticking with funding and ipo's, in a bloomberg scoop, wework is seeking $6 billion in financing, but that is contingent on its ipo success. companies meeting with analysts this week before its stock market debut sometime next month. for more, let's bring in julianne hough.
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congratulations on the scoop. wework needs money, it is going to get some, but it has to do really well when it list as well. >> the company needs financing, it needs debt as well as equity, but as we reported yesterday, financing is contingent on a successful ipo, which is defined as raising at least $3 million. that will depend on how equity investors receive the company. the interesting thing about the debt facility, it will be two separate trenches. one is a letter of credit, the other is a delayed draw term loan. the company will have to meet certain metrics to drawdown that loan. caroline: how often have we heard of banks needing these contingency plans? >> it is pretty rare. it is not your typical credit facility that companies seem to ruffle of easily and hand the lenders significant ipo mandates. this is more about a bigger ask.
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we were reported about the fees, a 3% upfront fee, which is viewed as quite significant. earning will be more, possibly, from the feed and they would from the ipo. scarlet: and the company is meeting with analysts asleep to give them a sense of how they are positioned. what story to the numbers tell? -- what story to the numbers tell? analysts got a peek into some of the numbers. one number i would like to point to his lifetime value customer acquisition cost ratio. that sounds pretty technical. it is how much the company is earning from a customer based on what it's outweighing to get that customer. the number is four points to present -- 4.2%. any business model generating more than three x is good. that reflects well on the company. caroline: and the retention
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rate, 121%. the membership rate is growing. lending toompany companies that banks are hesitant to lend to. gillian: there are a lot of questions around the business model. banks need to make sure they are doing what is in the best interest with their balance sheet. they could be lending to any country on the street, so why -- company on the street, so why wework? and apparently all of the analyst called ended with avocado toast, quinoa, and a beer. scarlet: and it is all about swag. caroline: t-shirts with a big mugs,reusable coffee umbrellas, and tote bags that say "do what you love," the company's slogan. tan, thank youn
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so much. you mentioned avocado toast and beer, the next trendy millennials superfood might be prunes. the u.s. was the leading exporter of prunes into china, but then you have a trade, so that ended that. now there is a prune oversupply. the dried fruit, which everyone it is also appeal to millennials thejens the -- and gen z -- floor director is laughing right now. says in the hat, what is known as your fathers dried fruit. that is exactly what it was known as. ironically, my son who is jen alpha, is addicted to them. i have to stop a meeting -- stock a meeting from them. scarlet: one reason they might like prunes, they are untainted by certain -- sweeteners and preservatives, they can -- caroline: well, i am a mother
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now. it is enhancing his mother -- his-- if muscle cap muscle tone. thank you for flagging that some of our producers. coming up, thin tech taking off as more firms are securing venture funding. we hear from hans morris with mic a partners. this is bloomberg. ♪
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caroline: the focus on thin tech andcaroline: -- on thin tech -- fintech continues to increase. he spoke with like a partner -- nycan.y.c. a n -- managing partner hans morris. hans: we had a very specific idea, we are just going to focus
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fintech.ech -- we are good at helping financial -- how much capital we will take, how much regulatory process, how do you plug into that system? we found that entrepreneurs value that, and also other venture firms value it. in some cases, we have some great firms come in to help us. tech has gonein from a tiny little portion of the venture community to a big portion now. we could talk more about this, but when i started, i wrote a blog post in 2014, and there were a few hundred fintech companies. if you went back 10 years earlier, probably a dozen that got funding. we did this rough calculation, because i do not know if you could count it, we estimate
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about 15,000 fintech firms that have funding around the world. >> what was the catalyst to give that sort of acceleration? hans: a big part of it is technology changed. what were the big drivers, i think certainly the fact that phone is a your supercomputer in your pocket, you do not have to have that inside the bank with a very big change that took place. similarly, the advent of the genetically u.s. cut down the infrastructure requirements. it did not cost tens of millions of dollars of investment to get to scale. i think the financial crisis had a big impact. really, all the incumbent companies, banks and insurance companies, had to cut out their idea labs and innovation groups. that's all got eliminated, and the focus was really on a global major reregulation cycle. this happens in ways, i think,
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so they were just dealing with that. meanwhile, you have the big changes in technology, and the key thing -- i think this is something that is not well understood and it is still an open question. answer onredict the this, but i think the nature of trust has changed, because if you think about this issue, would you give some app on the internet the login credentials to your bank account? no. tens of millions of people do just that, and it used to be that it would take tremendous infrastructure to build that i think be trusted, and the expectation now that consumers and businesses have is -- we call it a tech duration, an experience you expect. if you do not get that and if samere entering the password, answering stupid questions, if it is frustrating or redundant, that reduces your
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trust. but that experience characterizes many of the legacy companies, but they are trying to change that. it is hard. meanwhile, a company comes up with fantastic experiences, you are on board in 30 seconds and experiential, that creates the trust that would have taken 30 years to do in the past. scarlet: let's get you a check of the latest business flash headlines. the firm's flagship fund posted second-quarter withdrawals of 89 million dollars, bringing assets below $10 billion for the first time in years. still, the firm through in about $1 billion due to institutional credit strategies. shares of ferrari falling the most in almost 10 months after the supercar maker posted a slowdown in profit growth and shipments. shares declined almost 7% before being halted from training. -- trading. the drop came after a miss on adjusted earnings.
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in new york city, more commuters are saying goodbye to gridlocked roads and unreliable public transportation. uber began a helicopter service this month.rt and apple and barclays have dropped the rewards program from their longtime credit card partnership. the debutcomes before of a new applecart with goldman sachs. that card will offer 3% cash back on apple purchases. that is your business flash update. caroline: another story on our radar, and it is something to do with television -- tv networks, by the way. scarlet: very meta-, by the way. caroline: they are stuffing in more and more commercials, despite the effort to cut back. if you think you have seen more commercials, you are not imagining it. viacom, 14 minutes of advertisement for our. -- per hour.
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executives are realizing this, and the viacom 2013 thatsaid back in the commercial minutes were unhelpfully high, but they have to pump in more and more commercials because there audience -- the audience is getting smaller. rather vicious than virtuous, but otherwise they have to charge the markets more per advertisement. scarlet: there is a great line in this story from someone who is observing all of this, saying that to many commercials is probably the main reason people cut the cord, but it is definitely in the top five. for younger generations, like my kids, too many commercials is why people do not even bother paying for cable tv service to begin for it. -- begin with. they see the commercials, i do not want anything to do with this. they either have to
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cut the advertisements out of youtube, getting premium services -- scarlet: just turn away for four seconds and hit "get add -- "skip ad." ads are so much longer in america than they are in europe. they go on and on and on, they are like infomercials. a quick look at the market, we are seeing a down day in tech and emerging markets. the worst day since december. caroline: this is bloomberg. ♪
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mark: i'm mark crumpton with bloomberg's first word news. president trump has withdrawn commitment ratcliff from consideration to be the director of national intelligence. the president had planned to nominate ratcliff to replace dan coats, who announced he was leaving the post last week. in a last-minute pitch to be puerto rico's governor, he tried to turn his greatest vulnerability into an asset,
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arguing that his experience despised federal oversight board would make him the best candidate to fight it. he made his case this morning before puerto rico's house of representatives just hours before the governor is set to leave office at 5:00 p.m. local time. lawmakers delayed a vote until at least monday after he failed to get enough support from the island's governing body. he stepped down after weeks of massive protests. puerto rico's former representative in the u.s. house of representatives is the pic for secretary of state, the position next in line to succeed the governor. in new york, a judge has recommended the police department fire the officer accused of using a chokehold in the 2014 death of eric garner. gardner's daughter spoke to reporters today. >> this has been a long battle. five years too long.
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finally, somebody has said there is some information that this cop has done something wrong. we waited five years. they have made the recommendation. commissioner o'neill, fire him. that is all we are asking. we are asking for the congressional hearing. we will keep fighting for the every gardner law, but five years is to law. mark: about two weeks to submit responses before commissioner o'neill makes a final decision. id theent trump sa united states and european union are sent to increase the amount of beef that can be sold to the block. he said the agreement will "low or trade barriers in europe." almost 35 metric tons of the annual eu allowance for import beef.e mor -- hormone global news 24 hours a day on air and at tictoc on twitter
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powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ caroline: it is 3:00 p.m. in new york and 8:00 p.m. in london. live from bloomberg world headquarters, i'm caroline hyde. scarlet: i'm scarlet fu. this is "bloomberg markets: the close." caroline: u.s. stocks head to the worst week of 2019. president trump escalates the u.s.-china trade war. trade war affects being spilled into the labor data with retail and factory jobs taking the hit. bouncing back, crude crawled back after its worst we can more than four years. all that and so much more coming up. scarlet: first, with one hour left to go in u.s. trading, looking at a dow that is down for a fourth straight day that has come off of its lows.
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2.8%. at one point, that was the worst week since december of 2019 but it has come back here. the worst week since may. once you have moving into treasuries and the german bund as well as the 30 year. caroline: by one basis point. the entire yield curve of germany was a negative territory at one point. the search for safety went into the japanese yen, the swiss franc across the board. also bracing ourselves for yet further concerns over in hong kong. scarlet: unrest in hong kong this weekend because another week of protests, i believe it is the ninth week of protests, is scheduled. and a strike on monday as well. lots of concern about whether china will respond more forcefully than it has so far. let's take a closer look at what is driving some of today's actions without reporters -- w ith our reporters. abigail: the dow had been on
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pace for its worst week since december last year. same sort of true for the stocks. down 7%. the worst 4 since december 24 -- 4 days since december 2 for. that is what we are looking -- the worst 4 days since december 24. uncertainty around the trade war, the fed, and what could be next. this is a chart we have looked at a few times over the last month or two. going back to 2009, real trough levels. 8 times forward, typically looking at something closer to where we have been over the last two years. 12 would still be cheap. 16 times would be a little bit rich. week, the highest level in more than a decade. you can see we are going back down, suggesting there could be more weakness ahead for the stocks and in turn perhaps the major averages as well.
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still in the middle of today, more than 20%. take a look at this chart. on its latest poorly earnings results, analysts raised targets after these positive results. deutsche bank's analysts upgraded to a buy. 40 from 26. we know also that nomura rose $39 fromrom $39 -- to $32. even in the seasonally slowest quarter for net at. rbc' mark mahaney rose the price targets as well. this was the last holdout in the german bond market to still offer a positive yield. at least until today. the yields dipped below zero.
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not by much. less than one basis point. it closed less than one basis point above zero. but still, tremendous milestone in this real saga of negative yielding sovereign debt. more than $14 trillion in investment grade around the world -- investment grade debt around the world is in negative territory. the answer to why now for the german yield is basically the same thing we have been talking about all day. the fed cut rates. that has people believing the ecb will follow up. this risk on tone to the markets has spread globally after president trump ratcheted up the trade tensions with china. so scarlet, a -- pretty surreal to see the entire german yield curve in negative territory at least briefly today. scarlet: thank you so much for that set up. as we mentioned, u.s. stocks were headed to their worst week so far this year. it has come back a little bit because trade tensions between the u.s. and china continue to escalate.
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for more on the markets and how he is navigating these uncertain times, let's bring in chris. chris, i know that you don't attempt to answer questions like will the federal reserve cut rates further? will england leave the eu? you say in your letter to investors, fools give you try.ns, wisemen never where are you finding revenue growth in this environment? chris: first, i stole that line from oscar hammerstein. where do you find value? i think you have to go for revenue growth. that is a little bit unusual for us because we are usually looking for cheap assets and things like that. from energy to other commodities to industrials, that is just not working right now. we look for revenue growth and try to buy those technology names that are growing, that are still somewhat reasonably priced. the reasonably priced for example regulatory concerns or
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other things that we think are short-term, not long-term impact on the business. you look at facebook, google. they are both trading slightly above market multiples what are growing their top line by over 10%. you cannot get that kind of growth anywhere else or anywhere you is reasonable. caroline: interesting. so the big tech is value in your mind. some areas. where in the tech space would you not? christopher: netflix, for example. cash flow neutral, just turning positive. these copies are enormously cash flow positive and growing their top lines faster. they don't have the competitive concerns that tesla or netflix might have. scarlet: ok, so when you look at within technology, and i know you are especially intrigued by the whole streaming phenomenon, the trend there, who is going to be the long-term winners? you are looking at it from a long-term perspective, end game. bypassing what may be
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beneficiaries of short-term blips. what may be beneficiaries of short-term blips. who is the long-term winner here? not netflix. christopher: there is a company called roku that many of your viewers know because they have a roku on your tv. they. smart and gave away their software for free and are selling advertising on the roku and making money. the other two copies you definitely heard of, disney and google. google actually runs the largest streaming service in the world, youtube. scarlet: you are a large-cap value manager, right? christopher: right, but disney until this year was selling below a market multiple. now is just at a market multiple. it is not selling at 20 times, maybe 17 times next year, which is slightly above market. we think we have to expand our idea of value in this market. because i'm old enough to know that i don't know everything. i know what's working. i know what's valued in a place where we cannot see any revenue growth in so many different
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industries. so that is where we are going. and it is working. caroline: what are some key wholesale trends that people look at that are going to continue to grow in the face of trump's tweets, trade concerns, short-term issues? christopher: you put your finger right on it. it is making things easier, making things cheaper. whether it is anything from getting television in your home cablet paying the g.d. company or using a car that runs as a hybrid instead of paying a lot for gas. we are looking for those companies that make streaming easier so you don't have to deal with the cable companies. we think streaming is one. even in the energy area, we like the refiners. because they are coming up with new ways to meet their pollution goals. and because it is so expensive to do that, there is just a few that can afford it. you have the huge barriers to entry, and they are missing money -- making money. not obvious
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what. scarlet: looking for companies that can this intermediate middlemen. what is a sector that looks intriguing but does not offer value just yet that you have your eye on? christopher: we are wondering what to do about semiconductors. you just saw the chart. it is expensive, but there are some players there where we have a small position but not a large position because they are the future. they will build. not just them, but they will build the chips you need for streaming, for automated driving, for multiplayer gaming. these are really sophisticated ships. the question is, if the macro situation slows down, it is a tough place to be at least in the short term. we are waiting for some clarity on that. caroline: great to get some of your revenue winners. coming up, a new legal roadblock for t-mobile sprint's deal.
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a lawsuit aimed at derailing the tire. the new seven-year plan to open up european plans for more beef and what it means for america's farmers and ranchers. chevron and exxon boasting better than -- posting better-than-expected earnings today. this is bloomberg. ♪
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time for today's deals report. the texas attorney general joining a dozen other state attorneys general and blocking the t-mobile acquisition of sprint. it comes after the doj approved companiesith both agreeing to sell assets to dish. >> thank you so much. an joined by robert, who is
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advisor to t-mobile on this deal former commissioner at the central communications commission. robert, as caroline said, we have seen texas jump into this fight along with the other state attorneys general. it is the first republican state to do so. how much of a surprise is that? robert: it is a bit of a surprise, but it does not change the underlying substance of the lawsuit. it does not matter really who is suing. it is what are the facts of the law? the states have a steep uphill climb after the doj blessed this deal a week ago. a, there was no problem to begin with. but b, if there was any doubt about that, the department of justice, the sec have come up with conditions that rea compla. keep in mind the complaint has not been amended. it is a very basic, elementary complaint. not a lot of meat or detail in it. i think they are going to have a very tough law.
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it is going to delay the inevitable, which is the closing of the deal. but it doesn't really matter who is suing. it is what is being tried. ed: i just want to draw your attention to something the new day state a.g. said the after the texas decision to join. -- said, "we are confident i'm afraid we have to go back to the anchors. scarlet: i'm sorry we have some technical difficulties. hopefully we can get him back up. keep an ion markets because we are getting ready for a decline in u.s. equities. at one point, it looks like the dow was headed for its worst week this year. it has paired some of the losses and is still down about 3% right now for the week that is. for the date, is off by 0.8%. moreaper hundred losing than 1 -- the s&p 500 losing more than 1%. trade is top of mind after the president had indicated he plans to add 10% tariffs on three had
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a billion dollars of chinese goods. ed, i believe we have your guest back. let me toss it back to you. ed: thank you so much. maybe we annoy the fcc and they cut us off for a second. great to have you back. i will start where i was. commenting on the decision by texas to join this case, we heard from the attorney general for new york. "we are more copper than ever that enforcing our antitrust laws is the best way to protect competition in the marketplace." what does that mean? how should they be enforced, and are they being rightly enforced in this case? robert: certainly they are being enforced. the antitrust division took a long time to get to where they got. it is a complex series of conditions, both divestitures, the deal with dish, the network sharing with t-mobile, the sprint spectrum that is at play, and what this does is it gives the opportunity to unlock that spectrum that dish has an put that to use. what we had was a marketplace
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that there are basically two more dominant providers, verizon number one and at&t number two. they were in this top tier. and then you had a distant t-mobile and a more distant sprint so you are combining up or and four in that regard to coming to the top tier. you are going from two to three competitors when it comes to 5g. that is what is being built up. and now a fourth. dish had a lot of spectrum. this helps unlock and spark the construction of that network to light up a new network and bring more competition. ed: on the point of dish, this is one of the gripes of the state. they say, why would think combined t-mobile and sprint want to help dish? why would they want to help a competitor get more competitive and get better? these behaviors are difficult to enforce. you have been in the job of running the fcc, which has been seeing some of this behavior. how can they do it and what risks are there that dish will
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be allowed to remain as a subscale player? robert: excellent question. you have a couple layers of enforcement here. the department of justice takes their conditions and divestitures, the dish deal, et cetera, to u.s. district court here in washington, d.c. a federal judge will review the deal. that is going to take a few weeks, but that will be done this fall. and that will be enforceable. the doj can always go back to the court to enforce any aspect of the deal that is not being complied with. similarly with the fcc, we have not seen a draft order yet, but that should be coming in a few weeks i hope. the fcc will have, i'm sure, stiff fines and penalties for the companies if they are not living up to their end of the bargain. so that is two prongs of attack if you will for consumers, on behalf of consumer protection, should all of these companies not be complying. it is belt and suspenders in terms of protection for consumers and the competitive
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marketplace. ed: in terms of the regulatory theatrics of this, which have been for us in the media over the last year, we have this situation where the fcc having come out independently from justice. now justice having come out and backed the deal. we still don't have all the states aboard and some states going against justice. why are we seeing this? this lack of cohesion among the different regulatory bodies? robert: there is cohesion among the federal regulators, but also keep in mind there are about 18 states in the public utility commissions that have approved the deal. we have had team telecom approvals as well as the level. when you look at the great weight of who has approved the deal far outweighs the state attorneys general who may be political reasons or headline exposure, et cetera, are involved in what i think will ultimately be a fools errand. they have such a tough uphill climb at this point. ed: i just want -- the companies
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are going to want to get this settled. they don't want to drag it on indefinitely. what can they do to get the states over the line? robert: the ones who are litigating? will givethe states up and understand that the settlement with doj really is in their favor. it undercuts the complaint that they filed in new york. there were no damages, no risks to begin with. but if there is any doubt about that, that was removed last friday when the doj blessed this deal. i think as the states really understand and look at what is happening and what has happened and follow the approval here in washington, d.c., by the federal judge here, they will realize they have a loser of a case. it is a term of the sleep persuasive case to the court to happy to -- happy
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department of justice antitrust division go through many lengths secure the deal work and any alleged defects in it. they have the burden, and it is going to be tough. ed: thank you so much for joining me. before fcc chairman, robert mcdowell. from new york, this is bloomberg. ♪
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abigail: time now for "options insight." i'm abigail doolittle. joining me is greg of bloomberg news. happy friday to you, and what a week. a wild ride between the fed and trade headlines. vixking of volatility, the right now has an 18 handle. talk to us about the vix and the vix futures. we have a great chart that you brought for us. greg: we have seen a lot of the vix. as we talked about in previous is ans inside segments, it
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high beta hedge against a big market selloff. we have seen a bunch of people go out, by some of the upside calls to august and september. what that has done is actually turned into buying of the vix future. we have seen the vix futures, which we had in the chart, has really skyrocketed. does, creates a dealer short if you will situation where they have to go out and sell s&p futures. abigail: that will be interesting to see whether or not that happens. perhaps we can talk to you about that next week. the one trader out there who made 150% on iw and, a put spread -- iwm, a put spread. greg: one investor but a 152 strike.- bought 152 looks like he sold out today. today atp at least 2%
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one point so they monetize that trade for 150% gain and rolled that into a lower put spread out through september 6, which pre-much captures -- pretty much captures the soft september deadline president trump put on the china tariffs. abigail: going to certainly be interesting to see what comes up all of this next week and into the deadline. it could be not just the dog days of august, but exciting trading temperament thank you for joining us for "options insight." from new york, this is bloomberg. ♪
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mark: with first word news. president trump has assigned a bipartisan bill that suspends the debt ceiling for two years and allows the u.s. government to spend more on defense and domestic programs. the measure received approval when it was passed by the senate thursday. the measure suspends the debt limit through july 31 of 2021, eliminating the risk of a default until then. it also sets budget caps for two years that will prevent 324 billion dollars in additional domestic and defense spending above the current cap. senior administration
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