Transcripts For BLOOMBERG Bloomberg Markets 20160810

Julie hyman is taking a look, starting with the dollar. Julie its always a good day when i see peppa pig footage. This is how it has behaved going back to that post u. K. Vote to leave the european union. It is actually at its lowest going back to just before that vote. Yet had a lot of fed officials and we talked about this yesterday. Fed officials saying that the u. S. Market participants are underestimating the fed Interest Rate increases this year. Folks do not seem to be getting the message as we have seen the dollar come off of its highs. We have a tenure auction and we will talk about that when it happens. Rip and i put w. A. R the december chart down here on the bottom. It has not exceeded 50 . We are around 42 of a chance of a rate increase their at that december meeting. Getting back to stocks and we are seeing the same playbook today, except a little bit more of a movement than it was earlier. You have seen a little bit of a turn for the worse for u. S. Stocks here. No records hit today. The nasdaq taking the worst of it, down a half of 1 . Still not reaching that 1 level in terms of the s p 500. If you look at the intraday movement that we have seen in s p, you would see stocks started out a little bit higher and then really gave up the gains shortly after 11 00 a. M. If you look at the oil chart today, its a very similar move that we saw in that chart. We saw the oil was leading the s p 500 downward and we do have an oil chart as well. After theoil rose weekly inventories report. That was even after there was an unexpected built in inventories. Then it came down sharply. That led stocks lower. Alternative energy is also in focus today. That is as we got earnings from sun power as well as solar city. Somehow is really setting the tone, reporting what some called a guidance bomb in terms of its forecast cut. The Company Expects to lose as much as 175 million this year. In may, the companys projection was for a gay a game as much as 50 million in profits. This basically has to do with the man for utility scale solar projects. That demand has been flowing sharply. Bylyst really blindsided this change. This has to do with sun edison. That was floating the markets with assets. Reported and it was seeing a slowdown and installation. That has been weighing on that stock. Scarlet thank you so much. Julie hyman will be back on with our mystery chart. Oliver lets check in on the bloomberg first word news. Mark crumpton has more from our newsroom. Mark a new poll shows that Hillary Clinton has retained most of the bounce she received from the democratic convention. The Bloomberg Politics National Poll Shows Hillary clinton leading donald trump 50 to 44 among likely voters. When thirdparty candidates are factored in, her lead shrinks to four points. Donald trump denies he was threatening violence when he says gun owners could stop a clinton agenda. He is says he was referring to their political power. Hillary clinton wants to essentially abolish the Second Amendment. By the way, if she gets to pick her judges, nothing you could do, folks. Although the Second Amendment people, maybe there is, i dont know. Democratic senator Elizabeth Warren of massachusetts tweeted that trump mixed that threats because he is a pathetic coward. A Justice Department report out today says that Baltimore Police officers routinely discriminate against blacks, repeatedly use Excessive Force, and are not adequately held accountable for misconduct. The report also says officers make large numbers of stops, mostly in poor black neighborhoods and unlawfully arrested dozens for speech deemed disrespectful. In turkey, the president is coming up the heat on the nations banks. Lower mortgage rates, they will consider it an act of treason could th treason. Market average is 14 and the president says it should be 9 . In venezuela, the council has support for ation. Eferendum this year the review and 90 day verification that would push a referendum into the coming year. Dayal news 24 hours a powered by more than 2600 journalists and analysts in more than 120 countries, i mark crumpton. This is bloomberg. Scarlet easy money centralbank policies have pushed yields on more than 12 trillion below zero for sometime now and its starting to damage volatility, making emerging markets more appealing. Here to break what is happening is the bloomberg fx analyst and spent many years as an fx trader. The currencies, how far along is this rally . Are we in the fourth inning or eighth inning . Levelsre at free brexit and overall risk sentiment, which is a positive for e. M. And negative for some developed countries. As long as we see Central Banks at liquidity, the e. M. Sentenc e has room to run. Oliver you plotted against the s p 500. Why we looking at this chart . Vince the risk ratio as you look at the currency index, which is a batch of the currency deals we have been talking about, which is more developed countries, as the index rises, you are seeing appreciation of em currencies and people getting into yield, happy to take the extra risk with those currencies there. It tracks the same risk sentiment, which follows the s p. As risk rises, so do equities. Oliver what is interesting is the fact that you can look at that and see that the market is at alltime highs. It would suggest to some extent strengthen u. S. Economy and yet people are not going to. Where does that break down . Vince the problem with the dollar is that when you look at u. S. Assets and u. S. Treasury yields, you have the fed still in a tightening mode, whether it is not december or when you believe it. The same Capital Appreciation in u. S. Treasuries that you would get in other places where countries are easing. Even though yields or less, you have a bigger chance for Capital Appreciation and that is the draw away from the dollar toward those currencies. Scarlet speaking of countries that are easing, the british pound stuck in a range this month. Dip below a dollar . 30. What is with the bank of england challenges finding qe . Vince it is part of the confidence issue. The pound was trading off its highs, but still well above 130 and the auction announced it went well and it just collapsed. It is that relationship where we have seen people with the confidence with the bank of england to follow through with their qe. Scarlet theres also a lot a big data points coming up in the u k next week. You have got unemployment and inflation and something beyond the surveybased Economic Data points m we have been getting, which will cement whether the country is stuck in recession. Vince not sentiment votes. Oliver one thing i want to bring up real quick, moving it eastern, looking at the japanese yen, one thing im curious about is as a former trader, there was a lot of talk about when the japanese yen was weakening there was a pretty strong carry trade borrowing in japan, taking that money elsewhere. Is that now considered washed out or is there still some people using that play . Vince it has taken a lot of it out. You have seen recent months the dollar go from 107 to 11. That is a big hit in pnl to stick with carry trade. Scarlet the yen has gained 19 versus the dollar this year even as global stocks have rallied. Once upon a time it was a gauge for the appetite for risk. What is it a proxy for now . Vince every time i talk to someone about that, you just throw logic of the window. Last night it was machine to orders, which were well above expected. It is a proxy for cap x. You thought the Second Quarter was went to be dismal. That is going to spike the boj to do more easing and more fiscal stimulus. The number explodes off the top nd and everybody throws in the towel and the yen appreciates overnight. Scarlet thanks so much. That is bloomberg first were news fx analyst. Oliver this page is not need any lipstick. G pipep rejecting a takeover big. Oliver you are watching bloomberg markets. Scarlet i am scarlet fu. Rejected ant one takeover offer from itv that value the business at one billion pounds or 1. 3 billion. , it also let us talk to a manager of Livermore Partners. He is advocating that Entertainment One strengthen its board. s price the only obstacle here to a deal with itv . Good afternoon. I believe so. I believe price would be the only thing that is standing in the way here. Bid todaygiven the that is out there by itv. Scarlet you have had your steak and you have seen the stock go from just below 200 last week. Ofwant to a 10 month high 244. What kind of Crisis Management do you think it should get . David when we spoke to and you and i have spoken about this in the past several months, when the stock was going down to 160 pence a share, livermore looked at this as a very opportunistic valuebased opportunity. We took the state and have dialogue with management. Did not like the feedback we were receiving from them in terms of what the vision was and how to rewrite the equity. We of course thats a letter to the board and began further dialogue with them, pressing them to pull back on acquisition theme and pressing them to focus more on Free Cash Flow generation and building that credibility and shareholder value. It is been eight months and there has been overtures and rumors in the past. We finally see all that coming to light with this bid by itv. We feel that the shares are still undervalued. I do feel that itv would be a Strong Partner and steward of the assets. I do like their ceo and feel that the right valuation would make this deal work well. Does so david, what the new Company Look Like if the deal comes back and it goes through this time . I sort of envision the synergy of these copies working out Going Forward. David there are several different synergies. Going back to my conversations in the past, even with scarlet, i keep saying that content is king in the space. Entertainment one has some very valuable content, both on the pig aside with peppa well as some of the other scripted dramas. It do you levers itv away from an advertisingbased model into more of a contentbased. I think that is where there is great demand and Entertainment One is wellpositioned for that. It makes great sense. Scarlet following on your idea that content is king, Entertainment One acquired pig last september and they made three acquisitions in 2016. I know youre concerned about the pace of dealmaking for this company. Has a drop in the pound made it so that purchases are kind of out of the reach . David i would not look at the pound per se. Most of the sales, outside of britain. That is actually a very check the thing for a suitor. My issue along with entertainment want since we have involved has been the equitation acquisition case has been very strong. They have increased their debt profile and not producing Free Cash Flow unlike other Media Companies out there today. The issue with that is that Shareholder Equity has not risen. Been flat at that 150 pence where we acquired that state. The shares are valued at 240 pence and it looks like a great game. In reality, there is much more value assigned to the business i feel. I think a better steward of the assets again would make a lot of sense given the steps of the managements past. Scarlet i pulled up the wrong ticket. That is if youre looking at the function here on bloomberg. Oliver there are a few major shareholders in this company. Can you give us sort of an inside look at what is happening among the shareholders . We are talking with you, but theres a few other large shareholders. Scarlet a pension plan among them. Oliver theres 911 stakes in the company. What exactly is going to be the offer from speaking with your peers that would make this thing a go . David we have received a barrage of calls from holders just in the past several months as weve been a lot more public and terms of what we feel the proper Strategic Direction is of this company to remade it back to a normalized valuation. In that process, we have had discussions with the management and the board of Entertainment One and even the cpt, which is a very Strong Shareholder for this company. They are the largest shareholder, i believe. Therefore, there is always the potential for a deal to get blocked by one of the larger holders. Our view at livermore has always been that just because whether or 10n one share million shares, you are shareholder in the company and you should have a voice. If heard a lot from the minority voices in the past about how the company has been managed and why the shares are trading so low. We took the opportunity for ourselves and acquired the stake and we are happy to see the shares are rerating and it is getting validated by the offer. We feel a higher valuation is needed for a deal, but we would be happy to move forward. Oliver you are trailing the 12 month pe levels around 27. The valuation you want to see normalized is lower at about 13. Is the Growth Outlook at Entertainment One Strong Enough to warn valuation that is getting closer to the 20 range or what . David i think it is a combination of factors. I think of a company that theres definitely some synergies there from an acquirer taking on this business and i think the film library itself holds tremendous value to anyone. Their assets here to acquire as well as the operating cash flow potential of a business, especially when you do take into account the synergies. They have over 40,000 film and television titles. They have a bunch of hours of television programming. This is a very diverse and deep asset base. Therefore, its very attractive to someone not only like itv but also many other players out there today searching for content. David, they quickly, you had a short position on the valiant pharmaceuticals, but you covered it quickly. What are you moving on to . What are you using the cash for . David our letter came out a week ago and that is correct. Position. Rred our on the long side, were looking at the feeding ground for some undervalued assets. On the short side, we are looking at specific things like retailers like urban outfitters, which i believe we describe on the show. Theses not laid out our on it, but we think there is a potential to the downside. Scarlet david neuhauser, thank you so much for joining us and giving us your thoughts. David neuhausers of Livermore Partners joining us by phone from chicago. We will have more coverage of the markets, little changed. This is bloomberg. Scarlet this is bloomberg markets. Im scarlet fu. Oliver i am all of the renick. It look at the biggest business stories in the news right now. The preppy fashion brand ralph lauren posted earnings that beat estimates. The new ceo is trying to turn around the company by Closing Stores and cutting 1000 jobs and hiring new executives. Ralph lauren profits have fallen for the last two years. Scarlet fewer u. S. Housing markets are seeing doubledigit gains and prices. The National Association of realtors says prices rose 10 more in metropolitan areas in the Second Quarter. That is down from 28 in the First Quarter and 34 in the Second Quarter of 2013. Oliver apple is planning the first overhaul of its macbook pro laptop and more than four years. That is according to people familiar with the matter. They hope to boost sales after two quarters of decline. The updated notebooks will be thinner and have a powerful graphic processor for videogame is let me. Rs like me. Scarlet one of the big stories were looking at today is what happened with the bank of englands reverse auction . As part of buy gilts its expanded program, but it ran into problems. Resting bonds. Oliver what is happening is i want to put up a very basic chart. Here is what the yield is looking like a cross the u. K. Right now. Youre looking at the purple line at the bottom there. It is the 2year note. Post brexit how much more demand there has been for the shorterterm bonds. Looking at the twoyear and tenure down quite a bit since then. Scarlet we will be covering this later this hour. This is bloomberg could. Bloombergve from World Headquarters. I am oliver. I am scarlet fu. Blessed be headlines. Mark crumpton has more. Mark Delta Airlines says operations should be back to normal by midtolate afternoon, but the carrier is experiencing or expecting to cancel more than 150 flights today. Delta struggles to cover from mondays computer crash that cost more than a 200 flights to be struck. Says delta has spent hundreds and millions of dollars to avoid such failures. A Justice Department report out says Baltimore Police officers routinely discriminate against blacks and repeatedly used Excessive Force and are not adequately held accountable for misconduct. Problems in baltimore did not happen overnight or appear in a day. The pattern of practice that we found results from longstanding systemic deficiencies in the bpd. Mark mark the report also says officers make large numbers of stops, mostly in poor black neighborhoods and unlawfully arrested citizens for speech deemed to suspect both. In germany, Angela Merkels government wants tighter security after a rash of attacks last month. Among the proposals, faster deportation procedures for Asylum Seekers accused of criminal activity. Three of the attackers were refugees who had sought asylum. In brazil, the senate voted to move ahead with the impeachment of rousseff. Trial over on allegations that she is the improper loans from government thanks to pay for social programs. She said she did nothing wrong in the trial is expected to be held by the end of the month. News 24 hours a day, powered by more than 2600 journalists and analyst in more than 120 countries. I am mark crumpton. This is bloomberg. Scarlet thanks. Money cannot buy you love and love of money might make you poorer. That is according to research. The report finds that the more investors love money, the worst natural outcomes. What is behind the analysis . President senior vice and global head of research at center for applied research. Suzanne, great to see you. The thesis of your report is that those who love money have forced financial outcomes, so it can you extrapolate about investors love of money and willingness to take risk . 20anne we surveyed countries and they found something interesting. We found that the more that people love money, the worst outcomes are. The more money they actually lose as a result of their affinity for money. Getting underneath it, when you look at the height lovers of money, those who scored high on our love of money scale we developed, they make worst Financial Decisions and that is what leads to worse financial outcomes. When you think about money, it is about your emotional attachment to money, and that exacerbates behavioral biases in a significant way, so your question along the lines of risk, and what does that mean for risk assuming versus risk aversion we found those with a high degree of love of money assume more risk and that is not necessarily a bad thing, but when it becomes bad, there is a litany of behavioral biases that wreak havoc on the portfolio on a longterm basis. Oliver i wanted to bring up a chart we have to show original breakdown of love of money, which are find interesting because the u. S. Looks like it is topranked, but it might be a little higher, so can you give us details on how you define the love of money . What is the percent we are looking at . Suzanne we looked across the 20 countries. The u. S. Ranked six out of 20, and that means we have a high level of money in the country. , but the highst love of money. In terms of india, china, the most loved and at the bottom, you have the netherlands, ranked 20, and you have such and nordic countries ranked 19 at the bottom. Derived, wes created a diagnostic and it is interesting based on the money ethics scale that was developed based on professor work carried we get that toward the Investment Management industry to understand how your relationship with money motivates you to make certain decisions. When it comes to this love of money, the reason that the u. S. Ranked so high, part is the language and we feel comfortable talking about money and there is a cultural elements of this as well. Similarly in countries like india and china, whereas you look at the nordic countries, the language element is not something that should be spoken about. That can impart explain some of the variation, but when we did correlation work, we looked at the correlation between the high country with the high score love of money and things like the prosperity index, united nations, Human Development index and correlations were tight. The countries with a high love of money have lower levels of prosperity because they do not necessarily have the infrastructure and the foundation in place that the people have to focus on money instead of other things like general wellbeing. Scarlet you found no correlation between someones wealth and love of money score. By do you think that is . Suzanne, why do you think that is . Suzanne that is hard to determine. We believe that when it becomes irrelevant. It is not how much money have as a baseline but your emotional connection to money. So the money as a baseline, in terms of what you have, is largely irrelevant. It is things like, do you believe money is a status . Is it important to you and derivative of your success . It is about your emotional investment. Oliver when you talk to investors, some of the most savvy will tell you the hardest thing is to cut your losses. Say you are down 20 , 30 and you need to get rid of this. I think about this because it seems like a certain connection you have. You do not want to lose the investment you have made. Is that this idea that maybe does that kind of correspondent the lack of correlation between wealth and the love of money . Maybe those who get as lucky as they can is because they can cut their losses . Suzanne because they are in the position to do so and that is there, but we find there is a behavioral bias element around greed and fear. It is for a much grounded in those with a high degree of love of money are much more susceptible to greedbased and fearbased motives, so in the mate markets gain insignificant value, they are much more likely to buy. When they lose value, theyre much more likely to sell. Scarlet you took the words out of my mouth. Suzanne this does not end well when individuals try to find the market. They end up losing that money goes out the door. Scarlet how do you recommend users use your data . How should they all their approach on the basis of this research . Suzanne a couple. One, we are developing a diagnostic so that Financial Advisors could test. They should first about test their own love of money to see what behavioral biases, we are all human, but equally important, they should test and give a diagnostic to their clients. That is in progress. The other important aspect is that we need to become much more aware of her own behavioral biases. High lovers of money have this hyperactive behavior and trade with frequency, monthly or even more frequent, check their mobile device twice as often as low levels of money, so can we become much more aware of our own behavioral biases . Finally, we need to focus on the goal. It is not about the money. Money is a means to an end but not the end in and of itself are you if when dealing up individual investors that sells. Sells. If you are dealing with individual investors, they should they do not become shortterm and take the money now rather than to say, so what do you want your retirement to look like . Envision that and live in the moment and that makes it much more concrete as opposed to abstract, so focus on the goal and not the money. Scarlet thank you, suzanne duncan, global head of research at the center for applied research. Oliver i am afraid of what i might find. [laughter] coming up on bloomberg markets, u. K. Yields climbing back from record lows. The bank of england qe plan got back on track with a reverse auction. We are staying in europe. Prudential posted a profit that beat analyst estimates. Exclusive remarks on bloomberg, coming up. Vonnie you are watching bloomberg. I am vonnie quinn. Nejra i am nejra cehic. This is your global report. Apple is upgrading a product and it is not the iphone. Why apple plans to refresh their notebook computers. Vonnie brace for some pain. A new report detailing how much brexit could hurt britains Financial Services industry. Brazils at sign has voted to put suspended president rosus on trial. Ff annie apple is planning overhaul of their laptop and more than four years. They will revamp one of their older products and it will boost sales up to two quarters from decline. It could be thinner and a more powerful graphic processor for video gamers. Nejra disney reported quarterly expected. Ter than star performances for movies like finding dory offset a challenging time for them. They will pay 1 billion for mistaken technology and streaming company for major league baseball. Here is bob iger on the transaction. Highthey include making branded content and using technology to make the product better, the content butter and use it for production and quality reasons, but also use technology to distribute it in more modern ways, more if you could loosely and more inefficient ways so the consumer, possibly could enjoy and gravitate toward, and that is what this is. A is said to assume it is distribution play, but review it as a Technology Plan that is by both of the future of this company. Nejra a new report says brexit will hurt the british Financial Services industry, no matter how negotiations turnout. According to the institute of fiscal studies, banks may be hit hard if they lose Single Market access, but preserving the access would require membership in the European Economic carrier and that would come with regulations that the u. K. Would no longer be able to influence. Germanys biggest utility e. On reported a first hand loss you to an upcoming spinoff. The company took more than a 4 billion in charge linked to the units going public next month. They will go to fossil field power plants. Eonill putn of book will focus on retail consumers and energy. Vonnie time for background on issues of Interest Rates ills senate voted to put suspended president rousseff on impeachment trial. She is charged with documenting accounts to minimize the budget deficit to improve reelection prospects in 2014. She denies wrongdoing. In 2009, president lula proclaimed the Oil Discovery as a passport to the future. R Rio De Janeiro was awarded the olympics, but fast forward to today, half of this a. M. s, according to one poll, opposed hosting the olympics and they have slumped into their biggest economy slump. Has included members of the business and medical elites. The replacement has had three years of capital ministers stepped down over allegations related to the investigation. Heres the background. On paper, brazil looks like a powerhouse, the fifthlargest country in the world and oil reserves, including the western hemispheres biggest discovery since 1976. It is the secondlargest iron nor deserve, secondlargest producer of soybeans and thirdlargest of corn. With prices dropping, the model appears to run its course. S opponents argued that the time is over and that she bungled the economy and says that the currency tend to rise and then use seems to favor her removal. Rousseff supporters argued that they are trying to invalidate the democratic choice. They know that despite the massive carwash probe, she has not been accused of [indiscernible] unlike the legislators deciding her fate. You can read more about this island quick takes on the terminal. That is your Global Business report. Had to bloomberg. Com for more stories. Head to bloomberg. Com for more stories. Oliver i am aldermanic. Scarlet i am oliver i am oliver. Scarlet i am scarlet. Oliver we had a pretty big move down about 30 basis points in the s p 500 and part of it is to the oil complex, energy not doing well today after inventories report came out. Oil dove and stocks fell, so weighing on the market. Scarlet it is all relative. We are down. 2 of 1 and the benchmark index has not moved by more than 1 . It closed up or down by more than 1 going back to july 8, so it has been a while. Lets check in with a doolittle at the nasdaq with more. That aroundsaw 11 15 for the nasdaq and before that, it was down. 2 of 1 that we now seeing the dow jones and s p 500, but around 11 15, we saw a drop down, as much as. 6 of 1 , and moderating at this point, but the drag is biotech. This comes after yesterdays record intraday high, alltime high, and a new record closing high. The question we are asking is if it is the beginning of a string of new highs, similar to the s p 500, wheres the nasdaq going to do what it did last year . We look at a twoyear chart of the s p 500 and nasdaq, nasdaq and aqua, and the old record high of last year in that pink square. And therd i was put in nasdaq quickly came down. Another point by the chart is the idea that both indices, which have underperformed in outperformed over the last two years, have caught up. If the rally will continue both excuse me, the nasdaq and s p 500 will have to take out that top yellow line or really resist the selling pressure for the nasdaq. Otherwise, we might see a drop back down. Scarlet relative to todays trading option, what are other notable movers . Abigail big movers today, starting off with genetic shares, plunging, having the worst a since march 2000, after the Biotech Company missed fiscal fourthquarter earnings estimates and offered a 2017 view that fell short, so very disappointing. The stock is down whether 50 on the year, dragging on that biotech index. We also have sun power, solar power company, down sharply, more than 30 . The company slashed the fullyear guidance, especially [indiscernible] by as much as 45 , so too big movers for the two big movers for the nasdaq but relatively benign service, down. 4 of 1 . Oliver thanks. Moving to england. The bank of england this morning says they stumbled a bit with or rather they did not stumble a thatnd they now are saying they will try to make it up in november. Record we saw the record negative territory and we explained the response on bloomberg surveillance. We failed to buy what we tried to buy yesterday. We have two options at that point in time. There is another buying program today, so if they wanted to make up the shortfall today, they could have done that or they could say, well, we dont know why they cannot buy the bonds in yesterday, so we will put that on the back burner for a couple months and continue with the program and work out when we will buy the extra bonds in three months, which is what they did. In my mind, they are interesting dynamics because what that tells were reasonably confident this was a one off, the natural thing to do would be, say, theyre enough, i will buy more today and we move on. It is a bit more once than that and it indicates to us that it will be a challenge to buy the bonds and thereby more than gross supply and this is a bit of a warning. Holdine people want to onto them, but will it change the dynamics and how the government issues bonds . Clear, attractive is a relative term. [laughter] francine or ugly. Is if for thee people can afford to sell them because you have this area large , as your previous guest will know, very large Insurance Industry and Pension Fund Industry that needs to buy the bonds and hold on to them. The regulation environment prevents them from selling them and that is part of the challenge. Tom i love that idea, microeconomics of bond transactions. Lets bring up the chart at the yield. This is something we show every day but it really shows what the bond vigilantes are doing. There is the twoyear u. K. Notes , down we go, the lehman crisis, ever lowered yields and you can see the recent rollover. Quickly, to you just assume youre going to have negative rates in the United Kingdom . Mike we do not. No. We think that the rates will stay positive because of the challenges that it creates for the banking industry. Tom right. and has been pretty clear. If you got to the limit of paulo bonds can go, investors are looking for some kind of field and tend to stretch themselves out. One of the way qe works and it seems to be working. Tom lets go back to institutional mathematics. Maybe it is standard chart and life or whatever, but there are big Pension Funds out there and they have a slog of bonds. You have got to tell me the recent they are doing this to Governor Carney is because they are waiting for a higher price. Is that simple . Mike i think the regulator is saying, hold on to the bonds, you bought the bonds on the contract with the client to say that you will provide them with an income stream. Tom is that distinctive from germany or the United States . Not, no, but the distinctive thing about what is going on in the you care at the moment is you had a shift in the buyer base of the bank of england announcing they will buy more than the gross supply, so you have a fundamental shift in supply and demand at the point in time in the private sector owners, for various reasons, struggle to sell them and regulators same, ifa you sell them, hold against it. Tom is mr. Carney going to have to move to equity equivalents . Mike i think youll be reluctant to do that trade that is a Different Program to govern bonds to do that. That is a Different Program to govern bonds. It is whether he can do it without going outside the natural sphere. As you know, they have gone to government and a little Corporate Bonds and the bank of be and is reluctant to alligator of credit and the further you go in the more aggressive you are in that. Oliver that was pimcos mike earlier thislance morning. Time for a look at the biggest business stories in the news right now. The British Labor Union Planned seven days of strikes against euro star. A fourday walkout will start friday and another set for later in the month. The dispute is over Scheduling Program or train managers. They say it will force them to cancel todays two trains a day at most. Scarlet Global Oil Markets may last for some time. They say demand will taper off in the u. S. At the end of the summer driving season. Plus, fuel inventories remain high and saudi arabia has pumped a record amount of oil in the last month. A German Company taken over by creditors is planning and not oh ipo of this property unit, according to people familiar with the matter. They could raise 1 billion. They own more than 3 billion with the properties in germany. That is your business flash update. Scarlet still ahead, saudiiran oil rivalry heats up after an informal opec meeting. We will be speaking to the former shell president , next. This is bloomberg. . C sv scarlet it is 1 00 a. M. In hong kong, 1 00 in new york. Oliver welcome to bloomberg markets. From bloomberg World Headquarters, good afternoon. I am oliver. Scarlet i am scarlet fu. We are covering stories this hour. Oliver stocks near record highs while the dollar is weak or. Investors have been weighing u. S. Labor data against the prospect of the decline in oil prices. Scarlet saudi surprised. They broke the production record last month, putting into question of opec cutbacks. Wrote saudi arabia and iran develop grounds to market share . Oliver disney top earning estimates but concerns linger over espn. Bob iger discusses the future media and the evolution of the viewing consumer. We are halfway into the trading day. We will head to the markets desk with julie hyman. Julie we continue to see this drift that it is a little more negative than earlier in the session. We have seen it in recent days. This is the first day in a while that we have not touched a record at some point during the day as the s p 500 and the nasdaq with a record setters and were both lower. The dow jones off by 23 points. If you look at the s p 500 over the course of the day, you can see that it really gave up a lot of the games after 11 00 a. M. And we are in the midst of earnings season and a lot of mixed report. Disney has traded higher, one of the things supporting the index but not enough to keep it afloat. Scarlet what is pushing this lower . Groups, oil, trading lower, falling off after this mornings Inventory Data that showed an unexpected field last week in those crude Oil Inventories. It is back at 42 a barrel and this movement closely mirroring the movement in stocks. If you take a look at bloomberg, andgy shares are down. 91 they are followed by financials, who are also week today, down about. 6 of 1 . You are talking about heavy weighting. If you look at u. S. Thanks, you are seeing a pullback. Lower, and that is as we have seen bond deals go down once again today, so you see the yield on the 10 year down, off about three basis points, and we are just getting results as i speak of the 10 year auction, a 23 billion 10 year auction. Looks like they are joint 1. 053 . They were allotted at the hyatt 20. 45 . Looks like about those notes were awarded to direct bidders. I am looking at some of the other various metrics. The bid to cover 2. 43 versus 2. 33 at previous auction, so it looks like strengthening demand and that is what we saw in the three year auction earlier in the week, which showed the highest demand that we have seen all year. It looks like this is the lowest 10 year option since july 2012, highoks like pretty demand. This is the switch. A couple weeks or months ago, we were seeing lower demands because the outlook was, well, maybe the Economic Data in the u. S. Will be able to raise rates. That is seems to be wavering to some extent and it is chilling to do it is fueling the demand for its. Oliver not a lot going on in terms of Broad Movement but a lot of smaller movements. Thanks. Scarlet lets check in with first word news with mark crumpton. Mark an alliance of 15 progressive groups is pressuring Hillary Clinton to keep people connected to wall street out of her Transition Team and white house. That is if she wins the november election. And theyes move. Org say rejecting people connections will demonstrate clinton as serious with her partnerships. Clintonpoll shows mrs. Has retained most of the bounce she received from the democratic convention. The Bloomberg Politics National Poll shows are leaving donald trump 50 to 44 . Clintons lead shrinks to close to the margin of error when the Party Leaders are included. Chris christie texted a colleague that he flat out lie that a News Conference about the George Washington bridge lane closing scandal, according to a newly released court document. Bill moroney faces charge trial next month for orchestrating the lane closures for political revenge. Office didristies not immediately respond. In turkey, the president is turning up the heat on the nation banks. He says if they do not lower mortgage rates, youll consider it an active treason. The market is close to 14 and the president says rates should be cut to about 9 . Espn says veteran sportscaster John Saunders has died. They did not get a cause of death. A native of canada, joined espn in 1986, and was one of the networks most visible faces, hosting sportscenter and sports reporters. He was 61 years old. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Oliver . Oliver thanks. Oil prices declining after Energy Information agency reported increase inventories today. Earlier, opec reported a downward correction in single demand and expect it to taper off central inventories that remained abundant. Will it stabilize and prices strengthen . Joining us from houston is john hofmeister. The ceo and founder. Thanks for joining. Lets start with the larger take on oil. We had news in inventories today. How does this affect your outlook the commodity . John it is about in line with where i think things are likely to be. I think that until saudirussia and iran get their ask together and figure out they are all shipping oil while they are spending far more money than they are breaking in with oil revenue, until they get their Heads Together, we will continue to see overhead production from those three countries in particular. We do not need the oil. There is too much. The u. S. Is shifting production in the oversupply market, but it will take more than the u. S. Fishing production. Production. And the lack of spending capital, we are spending ourselves up for significant price rise in 2018 or 2019 when they will not be the oil that the world needs. Scarlet people worry about severe supply shortage in a few years because it takes some years for new fields to be developed so companies would have to invest now in oil prices have not recovered to keep the future oil flowing. With prices currently below 50 a barrel, is there not enough incentive for Oil Companies to invest in sufficient supply capacity additions . Do you worry about that . John yes, that is what i meant by higher prices in 2018 and 2019. Theres not enough money to keep investing now at 40 or something a barrel. Companies are not bringing in enough cash to pay bills for current production and invest in new production, so we are weting off the day, at which will have sufficient oil to cover the demand of the world and we are setting up a crisis on the other side of the price spectrum. It will be a high price crisis in so the low price crisis, but the high price crisis will affect the Global Economy and consumers in their pocket books, and it will be much more painful because people do not see the pain of the Oil Companies right now with some 400,000 odd people laid off with the deferral of hundreds and billions of dollars of spending, which affects everyone back to the steel manufacturers in the supply chain, so it is a terrible time for the oil industry, all things considered, but consumers are enjoying the consequences of overproduction. You madeack to a point when you said Oil Producing nations need to get their Heads Together. Into detail, if you can, where do you see the conflict right now in terms of countries producing and knocking their Heads Together . How does that get resolved . John i think opec is an ms. Venezuela is on the verge of collapse, nigeria is an country, other countries in trouble as part of opec but the saudis ruled the day because they have the most Production Capacity and they are on a geopolitical agenda to say to the russians and iranians, back off. The only weapon they have this oil price. Somehow, the russians and iranians are not listening or do not want to listen to the back off message and the consequence is saudi and keep and producing and so they deal the economic pain and iran and russia but they start to back off. You are hearing some rough edge talk about maybe the production freeze, maybe the meeting coming up, the informal meeting, will explore the prospect of a production freeze. That would be a signal, but whether that happens or not, we will not know until it happens or it doesnt. In the meantime, i understand the saudi point of view. They feel a mortal threat in the region and they cannot count on the u. S. For support. That is gone. This administration not support inm, so they have to fight their own terms and in their own manner on the oil prices. Scarlet you describe crosscurrents in the global oil market. It is debatable know how important or how critical opec really is. Do you see the cartels influence on diminishing oil prices . Do more to move oil prices on a daytoday basis than what opec says or when opec meets . Some opec, in total, is 30 odd Million Barrels a day and the u. S. Is about 8. 2, so in terms of the big swinger, opec remains the big swinger, led by saudi arabia. They will continue to be the big player out there. The u. S. Can help. We were at 9. 2 million a year or so ago. We can help influence global oil prices, but still, the big game in town is opec. Opec is ready wellcontrolled right now by the saudi and saudi agenda. Probably as it should be. Around by almost 11 Million Barrels a day, which is a lot of oil. Scarlet it is. John when you are a small producer, you cannot tell saudi what to do with what not to do. Oliver i went to bring it home. You are in houston, we are in new york, what is happening with Energy Companies in the u. S. , where we have seen the big drop in the price of oil when you but off the june high, 15 , stocks, the oil stock is held up pretty well, so is there a point that oil has to move below to work in flex pain on the companies or have u. S. Energy companies been been to the point where they are listing along . Ton i do not think we want see 30 price targets again. I think 40 is a very minimum and i think the share price is cold enough for most companies because nobody thinks we are going to drift back into the 30s. Because but i hope not. If you could push toward the 50 level, that would be a better sign but it does not look like that in the coming weeks. Maybe one month or two months from now, it could be different. U. S. Production continues to decline. The number of rigs moving upward is small. That are a lot of wells could be opened up, but you need money to do that. At 42 a barrel, you will not open up a lot of new wells. Maybe a few Percent Companies but it would be spotty is that occurs. I think we will continue to see u. S. Production to klein. The industry is suffering a lot of debt ridden and that debt ridden is burden is weighing on everyone. Very few companies have the cash flow they would like and in some cases, it is not enough to cover debt. About 110 billion coming due over the next couple of years in the service company, so that carries a certain amount of foray. At the same time, as we all know, the cure for low prices is low prices [laughter] the industry will have to recover, as and when, it is not producing enough oil to meet demands. Oliver supplydemand equations. What it always comes back to. , the chairmanr for citizens for affordable energy, ceo and founder. Scarlet coming up, a sign of chinese investors souring on investment. Why the air cooling demand. This is bloomberg. You are watching bloomberg markets. I am oliver. Scarlet i am scarlet fu. Buyers sold for the First Time Since 2011 and realtors say Chinese Capital control combined with currency depreciation and having an impact on buyers pulling the trigger. Chinese a young professional to see how conditions are affecting her purchasing power. It is becoming harder to become a realtor in the United States if your business depends on selling the chinese buyers. The cheaper yuan and capital control measures in china are prevented many from pulling the trigger on home purchases in the u. S. Inal sales to chinese buyers the 12 months to march felt for the First Time Since 2011 to billion dollars. Brokers say the biggest impact is felt in the 2 million to 3 million range, popular among middle to upper class chinese. I am from china. The city is famous there. Doctor, andhe is a brothersurgeon, and my used to be an engineer. She is one of the many educated chinese that want to settle down and buy a house in the u. S. Their pollution in china is serious this year, so my parents to leave after they retire. Her plans are on course because she prepares for the move for three years and has exchange all her yuan to dollars, an experience not shared by many of her chinese friends, which yian says are not struggling. The National Association of realtors say average price Chinese People paper homes rose more than sure percent on year, showing the really wealthy are still able to get money out of china. Experienced ar scenario where a transaction did not go through because of the transfer when it comes to china buyers. Those who buy in new york are affluent. They are the top of the top of china and the money is already out. It is just we need to find a way to route it to new york. It could be in the United States, europe, anywhere else. Scarlet that was bloombergs shery ahn reporting. Coming up on bloomberg markets, nine out of 10 bankers would be interested in Risk Compliance solutions but Financial Firms are not equipped properly. This is bloomberg. This is bloomberg markets. I am scarlet fu. Oliver i am all of. Increasing Regulatory Environment and many Financial Firms are concerned about budgets to go to support compliance efforts. That is according to a survey that surveyed executives with firms with 3 billion or more. The Vice President joins matt miller and cory johnson. Matt thank you. Jerry lynn, pleasure to have you. , helps companies to deal with Financial Firms, im guessing mainly, the massive amounts of regulation around trying to stop Money Laundering cyber trying to install Security Solutions and we are in a brandnew world. As the Technology Made her life easier or i think were a crosswords we are at crossroads in terms of it. There were interesting things in terms of priorities in 2016 and 2017. Essentially, what we saw was that we were able to understand what the priorities are from the Cyber Security perspective, and kyc,say wondering, aml, and know your customer perspective. If you think about a Financial Service and you think either about there may be a global money Center Perspective or from original market perspective, it is the complexity of the products, the complexity of taking an enterprise wide interview and solution in that. They challenges in terms of existing technology and stopping perspective. Corey solutioning, never heard of that. Asked, why did they rob banks, that is our money is, so hackers must be targeting Financial Institutions but we do not hear about those problems. Is that because tanks and are reporting this or because their defenses are more successful . Gerilynn i think what you see gerilynn i think what you see is the network permit are expanding. You see it from Cyber Security perspective, as well as compliances and one is protection of customer. The most important piece of information the bank has is customer information. The risk is paramount to people on the board from the reputational perspective. I would say from Cyber Security perspectives, there are deep inroads being made in terms of one containing attacks and understanding from a forensic perspective what the root cause is an getting to that. Matt i wonder about the kyc, gets an a customer, regulations we see in order to prevent Money Laundering. If i rent a Financial Institution and you are investing money with me, i have to make sure you have not gotten that money and that there no illgotten gains. How much or how deep do i have to go and how much does your Technology Help people do that . To asynn what we refer our solution in terms of either perspective is we refer to our solution as being data. O understand we refer to it as smart data, so ist the difference is essentially there is a meaning associated with certain terminology, and that is able to discover other relationships. It is similar in terms of a relational database, where it is essentially hardwired, but from the date of perspective, it understands relationships and when it is processed at execution time, it is able to extend itself and understand the relationship better. We know, we learn, we automate and we communicate, which is a tremendous advantage in the industry. Corey talk to me about moneylaundering rules and how they have changed and how difficult it is for banks to comply gerilynn. the major to comply with that. Gerilynn the major concern are the pressures that the regulations are evolving and changing. And how does an enterprise level of Financial Services company, a global money center act responsibly and minimize risk . And the deployment of that solution across the Global Enterprise is not an easy feat and complicated. Matt you did a survey of 280 highlevel executives that Financial Firms with 3 billion or more in assets. What is their main concern . What is the number one concern from executives . Numbernn managing risk, one. Number two, i would say, given the current staffing and technology, the sentiment was that it is inadequate to some degree and how responsive can they be to regulators because that is what needs to be done. Matt that is why they get paid the big bucks, take care of the problems. Thank you for joining us. Back to you. Corey and i will take it here. Andlet thank you so much bloomberg radio. A lot more coming up on bloomberg markets. Oliver were going to talk to his name. Robert iger on yesterday talking about a billiondollar investment to discuss the change in consumer fewer habits. His comments, next. This is numbered. This is bloomberg. Olivia oliver live from bloomberg World Headquarters in new york city, i am all over brendan. Scarlet and i am scarlet fu. Mark crumpton has more with our top headlines. Mark Delta Airlines says operation should be back to normal by midafternoon, but still it in to cancel more than 260 flights. The airline is struggling to recover from mondays computer causeich clause more than 2000 flights to be scrubbed. Spent hundreds millions of dollars to avoid such a failure. A report shows Baltimore Police officers routinely discriminate against blacks, repeatedly used Excessive Force, and are not adequately held accountable for misconduct. The problems in baltimore did not happen overnight or appear in a day. The practice results from longstanding systemic deficiencies in the bpd. Mark reports that officers made large numbers of stop, mostly in poor black neighborhoods and unlawfully arrested citizens for speech deemed is respectful. Russian president Vladimir Putin to andging a response attempted terrorist plot in crimea. The u. S. Has one another gold medal at the olympics. Finishing first and the time that cycle. Checking the scoreboard, the with 27ds the way medals overall. China has 17. Japan 14. Mixident obama will business with pleasure during his vacation in marthas vineyard. The white house says he will attend a fundraiser monday for the Democratic National committee. It will take place at a private residence where the first family is staying for their twoweek summer break. Global news 24 hours a day powered by more than 2600 journalists and analysts and. Ore than 120 countries i am mark crumpton. This is number. Scarlet yesterday the Walt Disney Company announced thirdquarter earnings but the news was largely overshadowed by the announcement is 10 1 billion for one third stake in bamtech. Ceo, westin spoke with the bob iger, about the investment and why he sees it as a strategic move for the company. It would be safe to assume investment,largest and what you might call distribution. The way we look at it is an investment into allergy. What we have been saying for more than a decade is our isategic priorities and making great high quality brands and using technology to make the product better, content better and use it for production and polity reasons but used allergy in ae technology to use it more effective and efficient way, ways that the consumer possibly enjoys more and is gravitating toward. That is what this is. It is safe to assume it is a distribution play. We view it as a technology play. That is vital to the future of this company. We are familiar with this technology. I certainly have watched from mlb what they have done. You would not be making this investment if you were not inclined in the direction of putting disney content on this new platform. When can we expect that to happen . First of all, we have been incredibly impressed with what Major League Ball and van tech bamtech have created. People who have been clients operate about it. Content owners as well as consumers. We did our own due diligence. Nothing comes close to what this platform offers. They have a great product from a user interface perspective. I am a big fan of mlb. It is a really great platform. We clearly are investing in this to use it as a sports platform. We have said we will launch an espnbranded Service Direct to consumer. And then adding rights that we have already acquired. We also believe this provides opportunities to jumpstart us and other branded bresnan branded businesses. Notably disney, possibly star down themaybe marvel road. We do not have specific plans. Would inevitably put us into the business. Isis it safe to say espn probably first up as you get into the process . Espn first up. We are the business that largely an. One of the big clients is hbo. Hbo now is powered by bamtech. Can be used by many different types of products. Sports will be first and espn. We think we can launch something that is a compliment to the current channel offering the current channel business that espn obviously participates in and a very big way. You mentioned hbo. Is it safe to assume you may have competitors in the content business who would be potential customers with you as an absolutely, yes. This is a whole new world where traditional distributors have gone into the content space. Comcast a great example, particularly with the purchase of nbc universal. Content owners are going to the distributors space. It is we are looking at a marketplace that is so dynamic that i do not know whether you call a strange bedfellows or whatever. There was a lot going on than what we were used to when things were kind where and gentler and meant more simple. And much more simpler. Insight into the relationship with the ultimate customer. That is often key. Ch have the relationship with the subscriber or does the content owner . Yes. It depends on the nature of the business. Espn will share. We will be the minority owner for quite some time. This is a big step for us. Most of the businesses we are in, other than the theme park business in disneys doors, we are delivered through thirdparty. Who goes to disney movies in the theaters. Know comcast subscribers. So while you could easily say we have been deprived of that, i think the better way to look at it is an opportunity to get closer to the customer, which platforms like this will enable us. We think that will be value enhancing to the customer over the long run. Scarlet how was the disney chairman and ceo, bob iger. The stock is up 1. 5 today. Oliver one insurer is faring better than competitors. That is provincial. Shares are climbing to a fourmonth high after the Company Posted a 6 increase in the first half product. Chief executive officer mike wells spoke exclusively with Francine Lacqua on business and exiting. I think the results, obviously very pleased. Up. Is up, doc is the profitability and cash generation. These are on u. K. Currency basis. Local currency is even more dramatic. We have been derisking the portfolio moving away from sensitive products for about a decade. 15 are spread based. Clientsns guarantees to. The bulk of earnings are not affected by this directly. There is some accounting noise but as far ason, pure economic value, we are pretty wellpositioned. Talk about asia specifically. As long as nothing ugly happens with the macro, it will keep climbing higher. Quite we have material elements to the asian market. Your clients buying insurance for the first time. That first time they brought bought a product. You are getting them attention for savingsconcerns from childrens education, retirement. Markets, the competition is delivery. Detached from Financial Markets to a great degree. You are competing with more sophisticated clients with more assets, so you tend to see more Asset Management products. Francine how did the company bear through brexit . Very well. Would be about 10 of the Energy Assets are based for european clients. We want to make sure we can service is. The other key issue is 265 european employees. I want to make sure their status is in question. I want to make sure my status is not in question. I want to make sure they are taking care of. Ancine are you expecting the outflows in the first half of the year to stop. They are improving. I think the interesting thing, when you saw the european flows into mmg, and that is pure scale as an asset manager in the u. K. Do a disproportionate amount of see if investors see a londonbased and u. K. Based assets as a place to be. Theink it will be part of european model Going Forward absolutely. Oliver i was mike wells eking exclusively with Francine Lacqua. Coming up, this is part of the inventory released earlier today. Should have been bullish for inventory prices but it was not. Julie hyman will explain in the mystery chart. This is bloomberg. Scarlet this is bloomberg markets. I am scarlet fu. Going out to our markets desk for julie hyman has more on the mystery charts today. Julie that chart looked at gasoline demand, which is now at a record. Think that would be good for crude oil. If there is all of this demand theresoline, that implies is a demand for gasoline as well. At the same time, we heard this talk pile so. At have this gasoline demand an alltime high. Yet gasoline is lower today. You have crude Oil Inventories unexpectedly rising. This is just a weekly change in inventory. The Third Straight week of gains syria 1. 0 6 Million Barrels for the past week. The overalltime, level of inventories. This is a seasonal chart. Here is this year compared to where we are seasonally and other years. Still running 100 Million Barrels about where we typically are seasonally. In other words, despite the spectacular gasoline demand, we are still seeing a very elevated of crude Oil Inventories in the United States. Glut of oil even with the gasoline demand. Is thatlem with that we are pretty much in peak demand. This is refinery utilization. What kind of capacity are they working at right now . This is a seasonal chart. Here is where we are with the white chart. Mid august tends to be the peak in demand. You see it spiked around thanksgiving. So if gasoline demand is at a record now, it is pretty much as high as we are going to get this year. You still have crude Oil Inventories at such a normally high level, that in theory is not very good for oil prices. Oliver it is obviously at a much higher level because inventories are high. It is still following that inventory. We still have the long inventory week of dust streak of inventory falling. Several weeks in the low and a row. Although it worked the inventories down to some extent, it did not work off the glut weve seen. Thanks a lot. Much appreciated. Scarlet a look now at some of the biggest business stories in the news right now. Opec signaling this may last for some time. In the monthly report, the cartel says demand will pay brought up the end of the summer driving season. Plus, youll inventories remain high. Upon to record amount of oil last month. Saudis say they are meeting an increase in domestic demand. Arehe British Labor unions in strikes against the euro star. Afforded work lockout will start saturday. The dispute is over as Scheduling Program for train managers. Tos will force it to cancel trains per day at most. Scarlet canada faces the heaviest month heaviest month of debt issuances and four years. The royal bank of canada and National Bank of canada will auction around just under 11. 5 billion this month. This would mark the largest monthly supply since 2009. That is the business slash update. Thing in canada, talking about a hot commodity, maple syrup. Pancakes is a favorite on the black market. Is Pamela Ritchie from toronto. Was it inevitable the cartel was going to loosen its grip on the maple syrup producers in quebec . A crazy story but seems like it, he was inevitable. Past couple of years we seen quebec, which represents 72 of the maple syrup market has been watching u. S. Producers produce more without restrictions not having a cartel crimping how much they put on the market. It was the frustration according to a government report that was put out a few months ago. Perhaps a few months ago we would see this boost. The economic actor up the world once more naturally occurring sugars. Less of a demand in many parts of the world for processed sugars. Of theof this mention black market. Talk about the role it played in maple syrup. U. S. Production of 23 from a year earlier. Quebec producers being frustrated by that. 45 growth of that from 2017. Many of the producers have been selling on the black market. This is an attempt to sell cleanly and know where they are going. Apparently feeds broken there. What is going on . It is actually a notorious tory. Back in 2011 and 2012 was noted on a routine inventory check that there did not seem to be as much maplestory as there had once been. Turns out over the course of the year and elaborate chain of thieves had gone in. They have stolen about 6 Million Pounds of maple syrup. Time, a barrel of maple syrup was worth 13 times per barrel of crude oil. They arrested most of the people. Oliver wild stuff going on with maple syrup. Result coming up, president will face an impeachment trial. This is bloomberg. Oliver this is bloomberg markets. Scarlet i am scarlet fu. Oliver results senate phone it senate voted to put the president on an impeachment trial that could last less than a month. We spoke about how the country can improve with political when Political Uncertainty is so high. Need to seee do more clarity on politics. Inflation is falling because the recession, the longrunning. Rocession, the worst ever we have not seen any sign the recession is bottoming out. That is having a very significant effect on inflation. Since inflation is one of the components of the misery index, it obviously improves a little bit the sense of wellbeing in the population. Unemployment is that they . Now the economy is still falling. The expectation is unemployment will likely continue to rise. And in light. Ear we cannot say when unemployment will reach a high. That is still depends on the political situation. If the Senate Confirms the impeachment at the end of the month is widely it acted, how would the confirmed president differ from Michelle Timmer at interim president . Think we will see very much the have seen so we far. He has been putting himself in the position where he is dealing with the Current Situation as if he were not already the jury president. I do not think we will see much of a change in terms of how he sees things, the proposal he is putting forward, the way he is dealing with congress. I think all of these things are things we will see after impeachment. Does the reform agenda lose urgency because he is now confirmed president . I dont think so. I think the questions that will arise are others. Brazil will have municipal election this year. Then in 2017 we start to have the political cycle for 2018. . Members of the may or may not run for office. These are the kinds of things that could hamper a little bit the reform agenda. Not coming from the president around, but for those him. This is where the big . Slide. Coming up we will be talking about tobias estimates on deals and steals in that space. Ms. 11 00 and San Francisco and 7 00 and london. I am vonnie quinn. Welcome to bloomberg markets. We are live at bloomberg World Headquarters in new york. Covering stories at San Francisco and washington. While the goldng rally and the dollar declines. Investor forecast will waver on taking action this year. This may be as safe that if rates will be lower for longer. Retailers Michael Cores and ralph lauren purporting Earnings Results today. What do the numbers reveal about the state of the consumer . A new bloomberg National Poll puts Hillary Clinton in a sixpoint lead ahead of donald trump while trump under fire after comments at a rally yesterday. We will discuss the tale of two campan