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tv   Bloomberg Markets Americas  Bloomberg  September 19, 2019 10:00am-11:00am EDT

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day in the u.s. i am in for vonnie quinn. to bloomberg markets. >> let's get a check on some economic data. we are waiting for existing home sales in the u.s., 5.9 million sold in august. that is your headline number. that was the survey, never in july so we had a little bit of an uptick from the july number coming in ahead of estimates here. 5.49, your headline number on existing u.s. home sales. quick check on the broader markets. the s&p 500, dow jones industrial, all the u.s. indexes trying to play catch up with european markets. you can see the two year yield here, a lot of activity here on the short end of that rate curve. we are seeing a little more flattening after the fed meeting
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yesterday. today.lls not deterred keep an eye on the bank stocks. we saw them significantly higher yesterday, getting a little bit about bid today despite a lot of the expectations for additional fed rate cuts. definitely a big factor in what we are seeing in the markets on the u.s. side. guy: thank you. front and center in europe today, stoxx 600 up. the banks execs is up. there's a whole lot of factors. we have seen the ecb and the market with another trove being kicked out. extra liquidity going into the banking sector of the ecb. the take-up was not as big as anticipated. yet the general rate policy story that is a factor as well. all of that contributing to a big bout of european banks, peripherally -- particularly
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peripheral banks. the other story is credit suisse will be charging rick clients to have a bank account, -- rich client staff a bank account, basically. more stories coming out of the gulf. romaine: we're going to begin with our big story, the federal reserve divided. policymakers lowering the main interest rate per second time with the chairman said and moderate policy moves should be sufficient to sustain the u.s. expansion. we are joined right now by nick groupsos, janus henderson cohead. we have heard from the fed and the ecb, boj, all of the more important banks. i don't think anyone can argue that bonds are cheap, but do you see any sort of reason or catalyst now where we would see a reversal in the trend we have been saying in the bond market? >> we did get to see a river vase a dust reversal in the past couple of weeks.
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the data was better, yield backed up, trade tensions have eased last week. monday, we get an oil spike and the funding issue, which is sort of a two headed monster and i think they had to change course. factors are globally, yields are moving lower. i think it is a function of structural issues in the global economy. not necessarily that issues inherent to let's say day over day news. i think what we need to focus on owning duration in these environments. not necessarily moving toward credit or riskier assets because rates will likely move lower. central banks are using policy. the likelihood of quantitative is set.lobally romaine: as we get deeper into this rally and this economic cycle, are there not risk -- i know there are risks, but are
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they -- have they been magnified enough to scare some people away? >> absolutely. the risks are significantly magnified outside of the curve. the long maturity bonds you have, the more sensitive you are to interest rate moves. in the case of owning a 30 year bond come if interest rates move higher in the next five to 10 basis points higher, then you have more of a negative return then if you own shorter data debt. from the areas we are focusing on is really the front end of the yield curve, particularly in the countries that have already eased in are going to continue to ease. countries like the u.s., australia, new zealand, canada -- these are countries that have positive yield curves and will be moving rates lower. end,ning the front and -- you will still get that defensive nature and be able to get good income by owning that front end. guy: you bring up australia. let's talk about what is happening down under. do you see the rba going further?
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datad some weak employment overnight. i see the chances of a cut coming next time around. >> absolutely. our belief has been for a long period of time the rba is a little behind the curve and they will ease policy. it looks like they're going to be moving next month. our expectation is they're probably going to move twice over the course of the next six months and really follow on to what the fed and other central banks are doing. the fed is really leading the charge. while other central banks may have cut rates first, the reality is, most central banks will be looking to the fed as guidance. if they're cutting interest rates, you better believe the rest of the world will be as well. guy: can the rest of the world keep cutting interest rates, though? look at ecb. talking about the fact we may be getting to the point where we are pushing on a piece of string. there is an expectation growing europe may deliver some kind of a fiscal impetus. what would that do to change your model?
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does that keep you awake at night when you look at the european market? really focus too much on the european market, but i will say there are some major structural issues. i think the ecb and the bank of japan are probably the outliers. the rationale is they don't have from of room to move monetary policy perspective. they are going to have to engage in nontraditional monetary policy, and that means more .uantitative easing they can't necessarily -- the ecb cannot necessarily do yield curve control because there are too many participants. i would caution people to focus too much on european debt as an asset class, and the more to other areas like the u.s., australia, new zealand where you have positive yield curves. the big outlier we are focusing on is what is happening in the funding market. i think that will bring things to life, particularly over the
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next six months as we lead into year-end. i think this can get a little more squarely in terms of the level of volatility that is input into the market. romaine: speaking of the funding market, are you taking comfort in the three repose we have gotten oversubscribed on two of those days, probably would have been oversubscribed on the first day had they been able to roll it out on time? >> yes. i think the funding stress is not getting enough attention. i think the fed downplay the repo situation. what they've done the past three days is great, but purely reactive policy moves. $75 billion is child's play. the volume and the overnight is over $1 trillion. we are functioning more rationally today but i think the story is not going to end. yes, repo is about 30 basis points titer but the markets are going to continue to push the fed. at some point we will need some proactive policy that is aimed at preventing any sort of funding stress. romaine: nick maroutsos, thank
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you for being on. let's get a quick check right now on the bloomberg first word news. >> president trump says a peaceful solution with iran may not be possible. he told fox news it could be what because a very strong hit, saying with -- we are the strongest military by far. the administration expected to release details tomorrow. it was so blower -- whistleblower, present trumps communication. it has led to a showdown between congress and the intelligence community. that is because the president sectioning -- acting national intelligence rector has refused to share details with house democrats. it is determined the whistleblower complaint was credible. president trump is unhappy with the cost of operating the u.s.
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military prison at guantanamo bay in cuba. he is considering what to do about it. he will not say whether he is thinking about closing it. the guantanamo bay prison opened shortly after the u.s. went to war in afghanistan following 9/11. in canada, it is just what prime minister justin trudeau did not need just a month before the election. he was forced to apologize for wearing brown face makeup at a party in 2001. a picture appears in "time magazine" and a conservative leaders has the photo reveal someone who is not fit to run the nation. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more 120 countries. this is bloomberg. romaine: thank you. coming up come central banks ease policy, more institutions are expressing concern over the global economy. will weigh in.
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this is "bloomberg." ♪
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live from new york, i am romaine bostick. guy: from london, i am guy johnson. let's find out what is going on in the markets. emma: global stocks in rally mode. someat the s&p 500, rising .3%. u.s. equities been driven higher by tech and particularly software, following what is happening in europe most of the regional benchmarks in the green. stoxx 600 up some .5%. we saw most markets close in the green in asia.
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hong kong closed down some one percentage point. switching the board, we will take a look at the stoxx 600 and what is leading this charge. that is the banks, rising around 1.6%. looking at over the course of five days. you can see the three middle days come all of them falling. we are breaking that three-day losing streak. maybe liking some of the signaling from the fed there may not be more cuts to come, at least not this year. if we take a look at some of the movers, i want to highlight u.s. steel, falling some 13%. the third u.s. steelmaker in as many days to one about the outlook. looking at restaurants. olive garden and longhorn steakhouse, they are down and they had a week forecast. overstock is falling again some 3.4%. this is the founder and former ceo saying he prefers gold and crypto. he may be right.
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morganowing what stanley's cheap equity strategist has said. the s&p 500's inability to reach new heights relative to gold may undermine that rally we have been seeing in equity so far this month. guy: thank you. central banks and focus in the last couple of weeks. the oecd is the latest institution sounding the alarm over the state of the global economy. >> what we are saying, even more vocally if, say, is that governments should actually leverage on the right to invest in much-needed infrastructure. globally, there is a need to invest for about six trying dollars -- $6 trillion and that is urgent. talking to us a little bit
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earlier on. talking to us now, alex stubb. good afternoon. do you agree, european governments in particular seem to have an opportunity right now to invest? we have a new commission coming as well. what is her task? what do she need to do to get the european economy going? >> i certainly agree with that thesis, we need to put money and investment into infrastructure. the european investment bank is the right thing to do that. we do a lot of infrastructure projects where we talk about bridges, airports, trains, and so on and so forth. i was a probably invest into things or focus on two things, one is climate change. she is doing that brilliantly. the other one is digital disruption, artificial intelligence. get things going on that side. she is pulling all of the right strings at the moment. guy: is that going to be enough? the challenges europe faces at the moment seems to be enormous.
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you have a slowing global economy, a sector that needs retooling. digitization needs to proceed a little quicker. the global economy is slowing down because of the trade war with china at the united states. does europe have the capability at this point in time to turn the ship around? >> first of all, their opinion is a crisis management. you go from one to another crisis. you take a breather and then choose the battles which you intend fight. i think this is europe's moment. what we're seeing in a geopolitical context is, one, the u.s., went china, and one the european union. if the european union places its cards right, stick to the americans but play ball with the chinese, i think we should at the end of the day come out of this one pretty well. that depends on whether the european union can be united. i think the messages so far have been good. we have another elephant in the room, which is brexit.
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romaine: alex, you say this is europe's moment or potential moment was to pewter talked about the unification. but how unified is europe? when you look at italy and brexit and the u.k. and hungary, is there enough unification in terms of the mindset to actually get some of these things done? >> well, probably better than normal, to be quite honest. i think the italian situation from european perspective has been contained with a new pro-european government. do we have various views on values and -- in hungary and poland in comparison to other member states? yes. do we have diverges on climate change between east and west? yes. do we have a divergence between the u.s. and china? yes, we do. but the key is art of compromise. , but atlittle bit slow the end of the day, comes with a compromise. i do think it is unified enough.
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romaine: when we talk about the potential or the need for a little more fiscal stimulus or at least a little more fiscal involvement, and you sorta think about what we have heard out of mario draghi and other central bankers around the globe really, not just in europe, do you think central bankers have enough confidence they could hand the baton off to the fiscal policy makers? >> as i always say, i'm just a humble vice president of an investment bank and i try to leave the big job of monetary policy and fiscal policy to the central bankers. i think, obviously, a lot of the central banks, including the ecb, have done and used a lot of the instruments in their toolbox and now it is up for the government's to try to make that toolbox work. we in the european investment bank are there to facilitate. in other words, we going to project 50% with a loan usually quite competitive. wantf the private entities to join in and help out come a
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we will be more than glad to help. but i will leave the job of central bankers to central bankers. guy: we will get a ruling from the supreme court in the u.k. days. you don't take a hard brexit is going to happen. all i hear is more and more politicians in europe talking about the fact a hard brexit looks like the central case now. >> i don't think a hard brexit will happen. i think the options are still there. the current you will not happen. negotiate a new deal? i think the british government and the european union is doing that at the moment. the key issue is the backstop ireland and the single market. the third option is to get an extension. i don't think anyone in their right mind wants this to lead to a hard brexit, basically, chaos. to be honest, as far as i can interpret, u.k. law, it would be illegal as well. guy: we will see. the courts are getting involved now. alex, thank you for coming to cs, alex tub, former finished
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prime minister. romaine: some breaking news in the u.s. come the latest saga in the tax return case involving president donald trump. trump is suing the manhattan district attorney cyrus vance. this is after cyrus vance subpoenaed trump's tax records. the latest of elements here, trump essentially suing the manhattan district attorney presumably to block his efforts to get a hold of trump's tax returns. this is "bloomberg." ♪
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live from new york, i am romaine bostick. guy: from london, i am guy johnson. one of the big developing stories we've been covering of late has been the outperformance of value overgrowth. here to tell us now about this move and how it is impacting .unds
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investors have been talking about this for a while. we suddenly got value coming back a little bit. has it got legs? have we made the jump? >> it looks like it. we have seen this before, but we have had a week to let the settle in and let the flow data come in. it looks like the fish are biting. one of the strongest i've seen in the last couple of years. this happened again at the end of 2018 when everyone thought values coming back, we saw aggressive flows. we are sort of sing it again. a week does not make a trend, but it seems like there's a little bit of breath. i think it is still too soon to say but it looks like the fish are biting. romaine: a lot of approaches to this style of investing. what type of names are we talking about? >> there are so many different value approaches. if you pull it up on the terminal, will get tsitsipas different etf's.
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i looked at most of these names and say, ok, where do they converge? values arey these built come you're going to get a lot of financials. that is why value has been doing better. at&t,t names like communication services, but at&t is the most owned value stock among value funds right now. guy: in the last year, earlier on in the year, warren buffett has some pretty big issues in terms of the way we value stocks . have we forgotten about that now? >> i was sort of asking the same thing. he was really aggressive. there's a lot of intangibles in stocks not being picked up by it. s, most are tf' using price-to-book. there are some other funds that don't use price-to-book. it would be interesting if funds sort of move away from those price-to-book funds and move to these more sort of pure factor
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place. guy: we will leave it there. thank you very much, indeed. you can find all of this fantastic work being done -- a on yourtf workers on -- bloomberg. romaine: now it is time for a bloomberg business flash, look at some of the biggest business stories in the news right now. we will start with target. the discount real or -- retailer announcing a new buyback program that will start when the current $5 billion program is complete that will happen in fiscal 2020. it represents about 9% of targets market cap. chinese consumers are not spending oversees the way they used to. tiffany plans on opening more stores on the mainland. upscale julie chain once to make a shanghai flagship store -- jewelry chain wants to make a shanghai flagship store. apple to one of the casualties of the trade war, at least in
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china. a survey their of the country's top brain shows the company sales from just fell from 11th to 24th. in 2017, before the trade war start is come apple was ring fifth in china. way is move -- huawei has moved up to second. that is your business flash. guy: next, we will discuss investment strategy with vanguard's francis kinniry. a quick look at the markets as well. european stocks reasonably well. bank stops -- stocks very well bid. this is "bloomberg." ♪
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♪ >> live from new york, i'm romaine bostick. guy: live from london, i'm guy johnson. this is "bloomberg markets." are nevergators
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getting market with increased volatility. unique wayest has a investors are allocating. vanguardinniry is with group. obviously you guys are kind of the behemoth on the street. let's start off with this idea about asset allocation. obviously there's been a lot of rotation among equity sectors. a lot of folks have gravitated towards bonds. you are taking more of a passive approach, can you still do those rotations, or is it better to stay where you are and just wait for whatever turmoil plays out? francis: what we've been studying, the cash flow behavior, as you mentioned the opening, for several years. we are in a unique spot because traditionally, we saw flows being momentum based, so think high equity returns, high cash flow to equity, low equity returns.
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now we are in this giant bull market for stocks, the cash flow is contrarian. a lot of investors are rebalancing their portfolios, sticking to the policy portfolio, which is great news for their outcomes. romaine: earlier this year, everyone was saying the 60-40 portfolio was dead. it's kind of back, right? it never really went away. francis: i don't think it ever went away. we've been tracking a 60-40 portfolio. just because you are 60-40 doesn't mean you are good are bad. a diversified portfolio has been very competitive versus the most competitive programs out there. guy: guy in london. more and more money is flowing into private markets. do you see a limit to that? francis: definitely. when we see the flows going into nonliquid private markets, you clearly see that as a trend that is coming. when you have high valuations in
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the public space and low yields, the search for higher returns is clearly going to some of the alternatives, including the private markets, as you mentioned. etf's over stacked mega cap companies at the expense of smaller companies? does that create distortion in the market? francis: i thing a lot of people have taken this distortion a little out of context. first off, mutual funds and etf's are only one part of the ecosystem within the capital markets, so when you hear these stories of indexing and etf's outpacing actives, the mutual aroundace is somewhere 30%. when you look at indexing in etf's as a whole part of the ecosystem, it is pretty small at this point, somewhere under 10% or 15%. romaine: is there crowding here? we had some major investors talk about this idea that with
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passive investing and indexing overtaking active, there's too many people in one corner of the investment style here, and that creates potential for a bubble and potential a crash. what is your take on that? francis: i thing a lot of people making that claim don't understand index and active. if you and i were the only two traders today and you decided you wanted to sell, we would negotiate a price. prices would drop. the index mimics active behavior, not the other way round. mimic thes going to market cap of active investors. romaine: when you look at where the allocations have been outside of just the u.s., for example, we have seen a lot of international allocations. when you talk about active managers driving indexing, do you think that with the way folks have moved a little more to the international side, that is a reflection more of the
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passive side or the active side? francis: i think investors in the u.s. had a large home bias, and they are removing that through time, which is actually great news. they are reducing be home bias. if you look at a global market cap, it was somewhere closer to 50-50. they are now being more professionally managed by advisors and institutions. . you're seeing the home bias be removed, so it is a good sign. guy: we've seen a nibble of the value sector over the last couple of weeks. is that going to turn into the markets taking a bite out of that sector? are we going to see people putting money back into work in value? the extremes between growth and value have gotten really stretched. francis: you're right, we did see that we could go. it has been this long growth momentum, where value investing has been out-of-favor. we are not here to say one week is the turning point or the
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bottom of value investing, but it is actually a good sign. there are some opportunities spaceve in the value relative to the growth space. it is another trend of investors rebalancing. guy: do you see it going further forward from here? i'm wondering what role bond markets are going to play in this. what we have witnessed is the bond proxy stocks in particular catching a pretty strong bid. these defensive names, everybody loves them. everybody seems to want to have that defensive sticker on their portfolio right now. people are talking about bond yields going even further lower from here. how do you see that rippling back to investors? seeing is a we are trend of declining interest rates, certainly in the fed yesterday. the money market and very conservative investments continuing to drop in yield. that is a headwind to
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conservatism. if your asset allocation is more towards fixed income or conservative investments, the return outlook for that is even going to be that much more muted. so that is a concern for how do investors get returns as interest rates are dropping and equity valuations are high. people are searching for higher return. romaine: obviously, vanguard pioneered the sort of pushed to more low-cost investing. we've seen the fee structure for this fall and fall. that's great for people like me, who want to invest, but i'm wondering, from a business perspective, is this a race to the bottom? is this going to be too much pressure on your company, your business model? francis: we are owned by our investors. anyone watching knows that vanguard is owned by our asset owners, so different than being a public company or a private company. the trend for us is awesome. we really want investors who have high outcomes, so this trend is really a trend we hope
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to continue, quite frankly, to give you and everyone listening today a better outcome from their investments. romaine: all right. , vanguardan kinniry senior investment strategist. let's check in with bloomberg first word news. here's ritika gupta. ritika: iran talking tough today. the foreign minister says there will be all out war if the u.s. or the saudis attack his country. they maintain that iran wasn't involved in the weekend attack on the saudi oil facility. president trump says a peaceful solution with iran may not be possible. israelis are facing the prospect of a third election. week, voters left the two main political parties deadlock, with nine dear -- with neither prime minister benjamin opponent or his
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getting enough votes to form a coalition. death --depression ml bringingn imelda serious flooding to southeast texas, sending rescuers scrambling to get those most in need. upone town, a tornado picked a 100 gallon propane tank and launched it into a house. forecasters say before eight is all over, imelda could drop up to 35 inches of rain in some areas. in the u.k., prime esther boris johnson has hinted he could suspend parliament again -- prime minister boris johnson has hinted he could suspend parliament again if the government doesn't prohibit it. johnson's team says it will comply with whatever the judges decide as he prayers for another showdown with parliament over prepares for another showdown with parliament over brexit. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more
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than 120 countries. i'm ritika gupta. this is bloomberg. guy: thank you very much indeed. let's get more on the current state of that court case. we are joined by tony aarons, who leads our legal coverage here in london. so we are done. three days, it's over. when are we going to get a ruling, and what kind of ruling are we going to get? tony: the supreme court judge, the head of the supreme court, lady hale, said they will rule as soon as they possibly can, probably early next week. that is the easy part. i'm going to quote her again. she said in the last five minutes of the hearing, "none of this is easy. question."ifficult she was really emphasizing how hard this was as a constitutional question. can the prime minister suspend parliament? the first two days of the hearing were all about whether what he did was legal or not, or lawful, in the in fish -- in the english phrase.
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the scottish court said it was unlawful. the english court said it was lawful. today there was a subtle shift. when the lawyer opposed to prorogation got up to close today, they asked him over and over, what should they do? if they rule in his favor, they said the suspension of parliament was unlawful, what do they do? they really seemed to struggle with that idea. what were the limits of the constitution and what they can say to a sitting prime minister about his actions to parliament? romaine: when we read into the decision once it comes down, whether it is next week or not, what are the longer-term implications for the elementary process over there, particularly for folks like us -- the parliamentary process over there, particularly for folks like us looking in who don't prime minister johnson has the authority to do this?
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tony: did i say this wasn't easy? that is why they are going on and on about what to do. they would have another week or two of sitting where they could do some oversight of the brexit process. in his submission, the government's submission, they hinted quite strongly that maybe they just prorogue parliament again. maybe they would just let parliament stay out. they were very unclear about what they would actually do if the government lost the case. so i think we are going to have to wonder about what the ruling says, and that is what boris johnson said in that filing. they need to know what the ruling says before they figure out what they are going to do if they lose. guy: the brexit process as opaque as ever. we will see if we get some clarity next week. tony, thank you very much indeed. romaine: coming up, at&t is exploring ways to divest directv.
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more on why after only a few years income of the telecom company may part ways with the $49 billion acquisition. we are going to talk about that next. this is bloomberg. ♪
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♪ romaine: live from new york, i'm romaine bostick. guy: from london, i'm guy johnson. this is "bloomberg markets." time now for stock of the hour. hour. here with the details, emma chandra is going to tell us why the stock is down more than 5% today. it's had a really good run, hasn't it? emma: it has had a really good run. earnings came in in line with
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expectations, and the company made no change to its full-year guidance, but what we could be seeing is traders taking some profits after this really good run for next. look at it through 2019, rising some 45%, and far outperforming the rest of retail in europe. there may be some concern among investors and traders today after we got some data from the u.k. on retail sales. they came in worse than had been expected in august, declining after two quite strong months. that could also continue into , warmer weather preventing consumers from buying warm winter clothes. another note, those retail sales were led down by lower online spending. that has been a real bright spot for next. they've really been investing in
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their e-commerce operations. a percentage of revenue growing significantly over the past few years, and now reaching nearly 45%. bloomberg intelligence saying that next's online operations is what sets it apart from other legacy retailers. that's your stock of the hour. romaine: our thanks to bloomberg's emma chandra. bloomberg has learned that at&t is exploring ways to part ways with its directv unit only a few years after acquiring it for $49 billion. the potential move could help the telecom giant raise cash and pay down debt. for more analysis, let's bring in senior telecom analyst john butler. they bought this in 2015. it was a huge deal when they did it. now they are reversing course. what is the impetus behind this? john: the impetus behind it was a letter from elliott management , the hedge fund that sent a letter to at&t's board, and said we would love to see you, among other things, pare down assets.
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they mentioned directv. it is the satellite business, and it's been in secular decline for a couple of years now. they are losing subscribers. it's been a big drag on growth, and it is sort of questionable about where it fits in the grander scheme of things at at&t. i think elliott is looking at it , and at&t is probably looking at it, saying, what do we do from here? the best answer may be we get out of the business. guy: the upside seems pretty big, john. at&t is reasonably well geared. leverage issues are certainly something that people talk about when they talk about this company. this just makes sense. it is not a drag on the growth story, and it helps with the gearing. john: you know, they might argue back that the addition of satellite subscribers gives them good cross-selling opportunities, number one. they are ther two,
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largest paid tv provider now in the u.s., so they have great leverage with content providers in hollywood. so as they move into the streaming business, they can look to that leverage to cut really good deals as they put together these new ott content services. that is the argument for keeping it. again, i sort of side with getting rid of it. i just don't see the fit. romaine: we are talking a lot about the nuts and bolts of the finances here. bloomberg news reporters had a great story about the branding for at&t, and what does the brand even mean. , assuming this report turns out to be true, what is that?mpany after where do they fit into the broader landscape with regards to entertainment and communications in general? john: i look at at&t and will continue to look at them as a wireless company. the wireless business itself is
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slowing, but it is still about 50% of at&t's revenue. their network, by the way, is getting much better. i think they are on their way to becoming a quality leader there. but that is the best way to think about it. they've made the move into content, and adjacent market that was growing at the time, to layer in new services into that wireless distribution network. but make no mistake, it really is a wireless company at its heart. guy: john, what is directv worth? john: tough to say. i would say the high $20 billion range to the low $30 billion range, based on some cable comps we looked at. but there really aren't any clean comparators there, so that is just a rough estimate. romaine: john butler, one of the smartest guys here at bloomberg. thank you. guy: that's true. still ahead, doubts over the
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speed of saudi arabia's recovery from last weekend's attacks on its facilities that continue to bolster the oil price. we will go to chicago next. futures in focus. this is bloomberg. ♪
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♪ romaine: live from new york, i'm romaine bostick. guy: from london, i'm guy johnson. this is "bloomberg markets." let's go to chicago now. futures in focus. blue line futures, joins us from the cme. the fed didn't seem to answer many questions. we seem to have a difficult journey trying to understand when exactly future rate cuts come in. how data dependent is the fed? what kind of questions are you asking? bill: i think that press conference went as good as it could. he didn't say a lot, and that's what the market needed.
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yet, the s&p and markets traded lower early right after the news. they didn't like the fact that the members don't see additional cuts. but here's the thing. i've been saying we are going to see this transition where the market goes from fed easing dependent to fat data dependent -- two fed data dependent. i put a note out for my clients, look for philly fed. if it beats today, the stock market is going to run higher. we are right near record highs, and i think we could make that transition of becoming more data dependent, and that is going to support the market making new record highs. guy: so that's equities taken care of. let's talk about what is happening in the oil market. we had a really bumpy week. no one is sure how it is going to be coming out of saudi. where does the market think we are in terms of saudi delivering? bill: the market believed it earlier in the week. we saw crude oil selloff below $58. but now with news that saudi
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arabia is buying millions of barrels of oil from iraq to help meet demand that they have for their customers, that is starting to pick things up. you still have ever present tensions with iran. there's going to be all-out war. we could wake up any day and there is sort of heightened geopolitical tension, some sort of war breaking out. that is the risk if you are fading this market, but i wouldn't be fading it here. earlier in the week, i would look at the $63 range. you could see additional premium coming in ahead of the weekend, so i would be cautious. it is ok to be wrong, just don't stay wrong. guy: absolutely. how are people protecting themselves? you've got kind of a collar on here. if saudi doesn't get it together, the price shoots higher. how do you position yourself inside of it? bill: i'm looking at the longer term trend. over the last 20 years, we've seen peaking in september through october, selling about
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8% crude oil. i thing this is a weaker time of year. i'm looking for those rallies to fade. if we get near the $62, $63 area, that is where i would look to be fading it. i don't want to wake up one night and this thing being five dollars to $10 higher because war is breaking out. i don't think crude oil stays up here though. u.s. production is right on track, and i think saudi arabia find them selves on track sooner or later. baruch of futures, thank you. romaine: the former ceo of overstock has sold his entire stake in the company he founded. he says he will put the proceeds into gold and cryptic currencies. he cashed out almost 5 million shares for about $90 million. he resigned as ceo last month. he had made a lot of comments about the deep state and the involvement in government espionage. huawei making a bid to overturn
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the u.s. law that put it on a blacklist. lawyers will be in federal court to argue that the law is an unconstitutional attempt to drive while way out of the country -- to drive way way -- to drive huawei out of the country. they spoke ceo mark zuckerberg appears to be on the charm offensive in washington -- facebook ceo mark zuckerberg appears to be on the charm offensive in washington, talking about future tech regular shoe. guy: coming up, we are counting down to the european close. we will also be talking to ing's head of fx strategy, chris turner. this is bloomberg. ♪
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♪ guy: 30 minutes left in the
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european trading day. from london, i'm guy johnson. romaine: in new york, i'm romaine bostick, in for vonnie quinn today. this is the european close on "bloomberg markets." guy: about 30 minutes before we end the session here today. stocks generally well bid, adding to the gains earlier in the session. banks are leading, up by 1.8%. a bunch of banks behind this. on the repo front and the decision that came through last night, we've had tltro's coming out of the ecb today. the take-up maybe not as big as anticipated. all of those factors into the mix. brent crude also catching a bid, up by 1.5%. maybe the saudis need to go to their neighbors to get some of the crew they need. romaine: thanks, guy. let's take a look at what is going on in the u.s.. -- s&p 500 upound


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