Dow coming off a high and the s p and nasdaq coming off. They are sort of mid range is what we are looking at. The risk off attitude has resumed to some extent. It is the nasdaq doing the worst of the bunch. Losses double what we have seen for the s p 500. We have bounced off the lows as the nasdaq traded down. Here is the today chart and the bounce we are seeing even yesterday. We saw the nasdaq close off the lows of the session. If you look at the percentage declines in the nasdaq 100 three of the four worst are not even tech stocks. Ats to neutral firm davidson, the analysts saying there is a deteriorating nearterm business fundamentals if you look at the company, and the companyceo had presented a thoughtful Strategic Land but were lacking, as was execution specifics. Dollar tree is down as well as we saw forecasts disappointing perhaps. It is interesting that it is not just tech and the nasdaq. You look at the 52week highs versus lows, we are at 44 . Just last week where the nasdaq was high. On techocusing specifically. We are looking at less than 5 today. Has deteriorated considerably test considerably. , we can janet yellen inflation is temporary and investors seem to disagree. Market is telling you something clearly. It is saying maybe the fed should pay a little closer attention to inflation data. A little more serious and if the fed continues to hike edges straight joining us now is the manageso manager which 160 5 billion in assets. Great to have you on the show. Are you disagree with what he says that actually janet yellen is doing right to look through some of the weaker data prints at this stage . The fed seems to be hellbent renormalizing interestrates overtime. One of the most important issues yesterday is we saw the treasury yields all and despite the relatively hawkish view in the notsection, the yield did on pup at all and we saw a recovery in the dollar but not the treasury yields. Is exactly right that the market is disagreeing with the feds perception at this point. From where you said, was yesterdays data point weaker than expected, a game changer . I do not think so in terms of the way the fed will risk on. I think the disconnect we see here is the real risk to the market is on the macro side. If this is for telling something more insidious as it relates to inflation, and thus the syncopation of fed hikes here on out, there is a bit of a game changer in their. A sense ofk there is something a bit more serious out there analysts are saying we do not understand why inflation is paving that way. The sames having problem. Yes, but i think the addition of the Balance Sheet issue where reducet seeing the fed the size of the Balance Sheet, i think that is an unprecedented piece of the puzzle and they will do it perhaps a soon as september, i think that is where the Game Changing nature of this occurs. Time, we are doing something the fed has never done before. Where do you want to be in this environment . People see equities as no other alternative if youre looking for a yield. Do you want to be in u. S. Sec at ease, or do you want to look overseas and is the trade getting too crowded, the switch out in emerging markets . From the perspective of europeanrade, the trade is definitely crowded. The u. S. Equity side of the puzzle, i think there are opportunities in the u. S. The crowded trade in the u. S. Is the safety trade. That is the bond trade where you yield seeking investors have gone to sectors in the market, whether it be utilities, Consumer Staples, and really got them back up to peaks in valuations we have not seen since this time last year. We look at the financial sector, we look at the Energy Sector from an absolute valuation standpoint as being quite attractive at this point. We were talking about bond proxy traits there and what we see out there, how vulnerable are they . If you are not in them, you do not get them, but if youre sitting in these traits, do you have it in here . Say thatte tough to these trays look crowded. Unfortunately, they still have to make money. It is interesting. If you go back almost a year to the day back to june right before the brexit vote, we saw the Consumer Staples sector start trading at 24 times for very little growth and that was a good indication to us here that things had gone a little crowded and when you want to utilities or other areas that looks like wants, i think that was the best indication, how much you are paying here growth multiples for stable dividend paying stocks. We have taken the opposite view, that we believe rates are on the move and we are not in the safety trade. Andre looking in financials other rate sensitive areas for opportunities, particularly given on performance so far this year. What is your take on volatility . The vix back above 11 right now. It has picked up a little bit in recent days. The index measures volatility and treasuries still at its lowest and quite a number of months. Does it pick up of the summer depending on how the data roles in . Or, are we looking at more of the same, with very low volatility . It is a great question. I think volatility, at these levels, has nowhere to go but up. From the vix perspective, on the equity side of the market, the most important thing we should think about is how earnings plays out over the summer. When we look at secondquarter earnings, that is really the holding up the equity valuations in the u. S. Market. From the treasury side, the way anymarket reacts to decisions made on the Balance Sheet, if you remember going back to the taper tantrum, the milton the mere mention by ben bernanke you have the fed was considering slowing the bond purchases was enough to send the treasury yield up over 100 basis points over three months. We are doing something unprecedented and i think that will drive volatility, certainly in the bond market. Trying to be so clear about communication. Great chatting with you. Portfolio manager in boston. Thank you for that. Tomorrow, bloomberg real yield will be live from the black rocks blackrock trading. Jonathan ferro will sit down with black rocks they will give their perspective on the fixed income market tomorrow at 12 00 p. M. New york time, 5 00 p. M. In london. Lets check on the bloomberg first alert news with mark crumpton. Mark President Trump said today that wounded republican congressman steve is quoted here in some trouble. He says he will be ok, we hope, offering that assessment as a shaken u. S. House gavel back after a day a shooting. The president and the first lady visited at the hospital wednesday night. Vice president pence and his wife this morning. Lawmakers sought a semblance of normalcy even as they offered prayers for the wounded and echoed the president in pledges of unity. To be Crystal Clear there is not any room in our society for hate. There is not room for violence. Stand, we must act in a peaceful and orderly and nonviolent fashion. Mark a home inspector from illinois has several minor determine the Republican Party over social media, he criticize the president and the gop. He was shot and killed by Capitol Police. The senate has voted overwhelmingly to increase sanctions on russia and iran and. Ive congress the power that is as President Trump wants to confirm relationships between washington and moscow. A response to russian involvement in last year passes president ial election. Reaffirming the u. S. Commitment in the alliance. Let them believes it has lost a criminal investigation into the highrise fire that killed at least 17 people. Prime minister theresa may earlier ordered a full inquiry. They expect the death toll to rise and said they have little hope of finding more survivors. Jury and bill cosbys Sexual Assault trial is deadlocked after 30 hours of deliberation over four days in montgomery county, pennsylvania. Cosbys charge with aggravated indecent assault for allegedly drugging of molesting a woman in 2004 p are each carries a maximum prison turn. Jurors were told to continue deliberating. Global news 24 hours a day 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. Scarlet coming up, tensions scalate as Robert Mueller investigation between the Trump Campaign and russia. From new york, this is bloomberg. Julia this is bloomberg markets. Scarlet we want to turn to the latest from washington. Expanding the scope of his russian meddling investigation by looking into whether or not President Donald Trump was obstructing justice. The correspondent joins us now from the white house. Walk us through how the investigation was supposed to begin with the investigation with the ties to Trump Campaign and russia has now gone far beyond that. Right. Look. The white house is saying the investigation has not found evidence of collusion with russia that reaches the overall oval office as of now. Now they are drifting into whether the president has obstruction of justice when james comey told general flynn, told comey to let it go in regarding the investigation to general flynn. That is where the investigation is right now headed. Until this there is actual evidence or until these reports are made public, the white house has a winning game but no question, i semiget broken record but this is every single time there is a new trick, but they want to talk about, and apprenticeship program, test reform, and health care. You are witnessing the greatest witchhunt in american political history led by very bad people. This feels like a good thing. Issuggests the investigation moving quickly and the hope is they can draw a line under it and the administration could move on as you alluded to. Where the to know information has come from because trumplittle game suggesting this is another fbi week. Right. That has been the argument. When the attorney general had to his ability is called into question. Day, until allhe the facts are put out there, and lets be blunt, the white house has refused to say whether audio betweengs exist director comey and the president himself. To make a case but they do not necessarily follow their own attacks. He will roll back some of the sanctions. Well with the contingency with the republican moderatecularly republicans as well might be against that. Yesterdays tragic events. I believe the congressional events, the Charity Event is set to go ahead. Can you give us details on that . His condition in the hospital is much worse than people previously thought. The president and the first lady visited him last night. The Vice President s wife were at the hospital today. The game is scheduled for tonight, a huge Charity Event. It will ball be all about Capitol Police and how they keep washington, d. C. Safe. He called the campus and this event i think really underscores why they call it a campus. Because of things like this. A very large building were a lot of people work. We wish the congressman the best wishes. We wish him well. Thank you so much. Still ahead, can American Airlines continue to fly higher . We will speak after this are from new york, this is bloomberg. Scarlet this is bloomberg markets. Fighting to remain profitable. Earlier today, American Airlines ceo spoke to vonnie quinn about the challenges facing the industry. Collecting has been difficult for our team of late. One thing that is important is making people realize we have people doing phenomenal things for customers every day. Sometimes put the team in difficult situations and that is our fault and not the team members fault. We love taking care of customers. That is what they are good at, so you can get the tools to do that. And you are right, we heard from customers and we heard from our team. We need to take care of those customers and you are making a harder for us and that is not the goal. Potential situations that might arise . Much as anybody, if not more. Are letting them know our views they tell us [indiscernible] or we are dependent upon the u. S. Government, who has the intelligence to let us know what their view is about a safety risk. We stay close and we stay informed but they have the intelligence. If they come to the conclusion that that is required, we will of course increment it. We are to work with them to make sure everyone understands the ramifications. Vonnie why would the air soffic control initiative badly received in congress question mark is that a good idea . I think it is a good idea. Some of his of congress are struggling with it. We think eventually as people learn more about it, we are actually trying to come push it here, simply to improve the air Traffic Control system for the benefit of the public. In a way that will allow us to out of the very difficult funding mechanism of the u. S. Government and allow us to move into vonnie it is one of the major interest russia pushes that have actually been announced so far. Know, d you is early. Ok. Believe they will find other structure bills, to get that done. Vonnie we have seen terrorism activities. Changing the demand based on events around the globe. They would make trips they would otherwise, not the extent weve seen elsewhere. Ofthat was doug parker, coo American Airlines speaking with vonnie quinn. Still ahead, the commodities close in todays trading. From new york, this is bloomberg. Scarlet from bloomberg World Headquarters in midtown manhattan, this is number markets. Commodity markets are closing and lets begin with gold. Metal is down at the lowest price in about three weeks as investors digest the fed announcement yesterday. Data showed inflation missed estimates for a Third Straight month at least on the consumer level. Gold will strengthen in the second half of this here. The forecast that prices will reach 1300 an ounce in 2018. Earlier this year, no dice. Is largelyo oil, wti lower after poking into the green, trading near a sevenmonth low as supplies cast doubt on opec plus his ability to reduce the global supply. I want to put the daily moves into context. This is 7347. 22 be exact. The white line there has put it in their market territory. Precious metals and Industrial Metals in yellow, Precious Metals and purple doing much better, keeping their heads above water. The best performing his Precious Metals. Julia now lets shed some further light. Renewable energy dropping so much that it could push natural gas plants out of business faster than previously forecast according to a new report by Bloomberg New Energy Finance team. Joining us now is i just want to start by getting you to explain what is pushing the cost down . Is it technology and skills . What is going on . Ex of three things. Technology in scale and competition. Solar, onlyind and affordable if subsidized by governments over the last number of years. Solar panels had gotten more efficient. More electricity per square inch. Wind turbines have got much bigger and more powerful. As the technology has spread around the globe, companies that make equipment, they built bigger and bigger factories. That pushed down costs. Lastly, governments have held to buy power from developers, which caused these really intense bidding wars. That has squeezed a lot of money out of the cost of billing. Things meant costs come down radically. These technologies are still subsidized, they are the cheapest forms of power on earth. Im glad you bring that up because that would be my next question. The needle atove all . Absolutely. They matter in the u. S. But less and less. It depends i market. If you look at wind, energy, in texas, it is about as cheap as you can get. It probably will not stand on its own two legs without subsidies. Solar already rivals the cost of new coal power plants in germany and the United States. When you say call, you think of china but that 2021, you think it will be a similar case in india and china . That is what bloomberg is predicting, yes. It is incredible. The costssuming continue to decline. In storage advances technology. One of the big hurdles that they still have to overcome is they are intermittent. Solar power is not so useful here the same happens with wind. What about natural gas . And its role as removals rise . Obviously, it benefited, or coal Natural Gas Prices have made it a preferred source of fuel. The way they see it is the role of natural gas will vary around the world. In the u. S. , where we have a lot of cheap shale gas more than we know what to do with. Natural gas will continue to play an Important Role in the electricity mix and really act as a bridge as we move from electricity that was based in Coal Production toward wind and solar. Natural gas will be a bridge between those two, and eventually, analysts see it as acting as a source to balance out wind and solar. This flies in the face of energy everything the International Energy association risingng about carbon for years to come and what is the biggest risk here . The biggest risk is that cost will continue to go down and that we will see Storage Technology pickup at the rate it is projected to do so. Right. Thank you so much. Interesting predictions for the future. Lets get you a check of the headlines with mark crumpton. HousePresident Trump says majority whip, wounded in yesterdayshooting at a baseball practice in arlington, virginia, may have brought some unity to the lawn divided country. Speaking to a white house event, the president gave this update on his condition. It has been much more difficult than people even thought of the time. He is in some trouble at he is a great fighter and he will be ok, we hope. The president and the first lady visited him and his family in the half the last night. Highest is the third ranked House Republican and was shot in the heaven listed in Critical Condition. The 51yearold underwent emergency surgery and dr. Say more operations will be needed. Rex tillerson is in miami today speaking with leaders of some Central American nations about how to improve their economies. This comes as the Trump Administration has proposed a to cut in foreign assistance honduras and el salvador and quality moller. Guatemala. Also taking a hard line on immigration on whether to end temporary protected status for around 200,000 Central Americans in the United States. An American College student was released by north korea in a coma and suffered what is being described as a severe nor logical injury according to a spokesperson at the university of Cincinnati Medical Center who he is in stable condition after arriving at the hospital two days ago. The 22yearold was serving a 15 year prison term with hard labor after he tearfully confessed a bannerried to steal while visiting north korea. Operatingl with the and advertising blimp at the u. S. Open said the pilot is ok after the blimp crashed, but he was taken to a hospital. The Associated Press said a Sales Manager for floridabased verisign said the companys is Operations Team on the ground reported on the pilotstatus and says no Additional Information on the crash that occurred during the opening round today in wisconsin was available. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Julia thank you. Coming up, emerging markets have out performed the last year and a half. Do they have more room to run and what throws them off course . We will dive into the Global Markets next here at from new york, this is bloomberg. Focusing on producers with Raw Materials specifically, im looking at filmmakers, and it is down about. 9 , which includes all kinds of different materials makers. It is really within the metals that we are seeing the weakness here. Big bump in got a hopes there would be a terrorist action is some before u. S. Still makers. Were taking another leg downward today. That Company Forecast trailed analyst estimates and said its products were more challenged than than expected because of aggressive competition. It did talk in part about imports from other countries. Other steelmakers, Steel Dynamics u. S. Carpenter technology it is not just steelmakers within the Materials Group is doing poorly today. It is one of the worst performing groups in the s p 500 today overall. Our next guests say we do have more year to run. Theyve only begun to put a dent into that. Joining us now is the head of Investment Strategy. You are confident about emerging stage. Stepping back for a second, the news yesterday, i am frankly amazed a personal. Ashley hit the tape there. Alls pretty happy to save the money on the cell phone bill. Tocaused chair yellen declare these effects transitory, mentioned it twice which is my boeing. Mind blowing. This will eventually go back to emerging markets, but the risk game on a 10 year should be Something Like a 2 real return. 1. 5 and not two. They can be a little sensitive as well. We need Commodity Prices to be stable to support continued emerging market returns. The run we have seen for 18 months has not even put a dent in the under par the financial crisis. The s p is up about 320 purity markets are up about 60 in that time. A big difference there. I want to take a look at basically tracks etf flows. Topil is right at the followed by taiwan and mesko in russia. You can look at it over a onemonth time, you can look over at her over one year, and the bill is pretty high, and over three years, the bill is pretty high. I bring this up because brazil has his own problems it is going through. He mentioned Commodity Prices will help determine where within emerging markets that you want to be. A country like brazil is pretty dependent on Commodity Prices, will it be trading on things like commodities, or its own internal politics . It is a big deal in returns not quite, it was correlated to oil prices. From our perspective, one thing we think will work is not necessarily a focus on specific geographies and emerging markets, but going back to a strategy that has worked in developed markets, nations of quality and growth, companies that consistently grow dividends or companies that continually grow earnings. Those are story ethic will be resilient emerging markets because there can still be oil pure oil is not going to the roof anymore. There will be a little pressure. Forilization probably ok brazil written large but i think quality stocks and dividend earners, perhaps a better bet across countries and the emerging markets. Lets talk about europe. What are your thoughts . Got the second round of parliamentary elections in france. A lot of optimism about what we are seeing. What are your views, taking on relative valuation . What you just said is the key. Relative valuation perspective. It is easy to be cavalier and say europe is always cheap. We can talkand about all the structural reasons and all of those issues, but the average discount of europe versus the u. S. Is about 30 . It is currently close to 50. The sixmonth that we see, the first rotation into developed markets and mostly europe and a little the u. K. With the pound notwithstanding. It has the left europe at a greater discount on a relative basis than the historical average. There is certainly room for outperformance and the flows are just starting to react. Wehow concerned are you that have a lot of these conversations and people say the same things . Uniform atre pretty this stage in terms of what is going on in the world. You think there is a crowded trade . Yes. Well, on the equity side, i think you are a little bit right. There is a lot of agreement on equities side. But on the fixed income side, i am not so sure. You can see with the bond market is doing. Nobody is listening to what chair yellen said. When we talk to clients, there is a lot of skepticism about whether or not rates can rise. Pathetic the economist disagreeing with the markets, not the players within the market disagreeing. I am saying there are crowded trades. But i think it is traders disagreeing. Look at the last year. We have had Interest Rates go from 1. 322. 6 on a 10 year and now, 2. 2. There is division out there. Opposed to the equity markets with the vix down somewhere around 10, if we use fortility as a surrogate agreement or disagreement, i would then agree with you a little bit more, agreement on the equity side, but not so much on the fixed income side. What is your most confident trade . Quickly because we have to wrap up. Interest rates will rise. The yield curve has flattened. It is cheap right now. Thank you so much. We appreciate it, head of Investment Strategy banking. Coming up, the german discount opens its first u. S. Tores the pressures facing the grocery industry next. This is bloomberg. Scarlet lets focus here on the markets as we have been and get a check of the Grocery Stores. Julie hyman has a closer look at julie apparently everything except avocado, one of the reasons under pressure today, the Largest Grocery Store Chain in the u. S. Is coming out with a decline in tech and samestore sales for the second straight quarter. It also cut its forecast for the full year. It seems as though food deflation is part of the problem but price wars can be a part of the issue. There is a new entrants in the market you will talk about as well. Shares are down 19 , a huge decline. The way back all to 1999 come trading at their lowest since 2014. Were seeing this affect other Grocery Store stocks today. Also declining after the stock was downgraded today, whole foods was down and walmart was down. Walmart is part of this. The likes of supervalu and target, supervalu taking it harder than some of the others. Lets take a look specifically. We have got the Consumer Price index here. This gets to the heart of what is going on. This is the yearoveryear change in food inflation. Positivenot seen a read on it since the end of 2015. It is abating to some extent but the question is what will happen if indeed these pricing wars heat up even more . Will you consider that a negative number . Subject in the grocery industry, at this time of intense come petition, seeking julie, a german Discount Food market chain is helping is first 10 u. S. Stores partner,s now is a great to have you on the show. Model the Hard Discount disrupt the u. K. Market with intense power. How successful do you think these guys will be in the United States . Question we think they will be incredibly successful. We think this model is real and it is here to stay. Theyll grow between 8 and 10 in the next five years, five times the rate at which traditional brochures if they do not act quickly, they could and the between 30 billion 45 billion in the next decade of incremental sales are those are huge numbers. Looking at supermarket locations, you can see the yellow dots are all the locations and the blue dots represent trader joes and whole foods and some of the existing brochures people are familiar with. I know they are beginning with North Carolina South Carolina and virginia, are they still you away from the trader joes, or are they really going headtohead with all of these . With everybody frankly. They will go after the but isensitive customers, think old and trader joes shoppers are interested in this. Of twoseeing the rise macro trends in the United States, the first is the economy are people are really looking for a discount and a deal. The second thing is the acceptance of private label. They so almost all their own brands. Ofy used to be the kind knock off white label not very sexy products. Now, the brand is on their own and people really like them. We did a study and 85 of american shoppers are open to the idea of rival label, which is huge. The quality isy equal or better the national brands. And you are licking your chops at that. It is fascinating. We talked about an element of snobbery particularly in the United States. Is this a point where goods get so cheap that people go, i am not sure that will be good quality. What is interesting is we talk about Premium Products and the quality. Things going on with organic ducts, we do not sign it an agreement was signed about an upscale line of womens intimates. Letting people think there is a quality here, im getting a cheap product. Not grotius did they did not react so fast. How do the u. S. Respond to this . Hey need to the Research Shows that is not true. 61 , i would try one of one comes to the area. To takelegal they have it seriously. The second thing is they have to be quick. They have to be as competitive as they can using their own private label brands. You mentioned people are more open and embracing the private label. There are people who love brands. It is the older generation. Younger folks today are ok with the private label. Millennials, it is all about experiences. Thank you for coming on and giving us your insides insights. Americas biggest banks, it is increasing. Talking about it come we look jpmorgan, pretty high on the list. We are making it. From new york, this is bloomberg. Julia it is it 00 p. M. In london. Scarlet welcome to bloomberg markets. We are live in bloomberg World Headquarters in new york or the next hour. Covering on the bloomberg and around the world, in politics, the white house plans to roll back regulation of banking. As much as 2 trillion in capital. It may be good news for investors. In corporate news, a new look at the c suite. Bloomberg was told about promoting women, forced to buy the biggest us banks of limit in the session. Taking a closer look at Chinese Investment in the United States. Why china can join a group of nations whose companies would undergo extra scrutiny for National Security risk. That is ahead here we are in our from the close of trading. We have a correction to make. We have an aluminum aluminum situation. A dialogueis just thing. Apparently little is the way you say the company, the Grocery Store train and brittle in britain. They say legal little. There are many examples. Exactly. Lets get to the markets. We are seeing stocks continue coming off the lows of the session. The dow is getting close to positive here, still down 19 selloffs we see the continue. Even bouncing off the lows. It is still of course in the red. Take a look at the fiveday chart of the nasdaq here. Since the selloff, it is down about 2. 6 . Lowse it housing from the of the session today and yesterday it closed off the lows a little bit. Got tech heavyweights tracking considerably on the s p 500. Similar names we have heard so much about. Barclayshlighted by which said the most optimistic expectations for the next version of the iphone might not he met. It is similar to the sentiment weve heard from other analysts in the past few days. Tech heavy hitters are trading lower and then there is the case of snap. Shares falling as low as 17. The ipo price earlier in the session just shy of 2 00 p. M. Public just in march. It is 17 per share. There was a surge in volume. Its secular and perhaps that someone came into support shares at that price, though we cannot confirm it. We have been on watch for the that level. Ll below outside of stocks, well talk about the yield curve today in the wake of the fed Rate Decision yesterday. You are looking at the 35 spread between the 30 year note and the fiveyear. In the fiveyear to twoyear spread as well. We are continuing to see a flattening or tightening of the bit of a a little widening of the shorter end. But either way, you have seen the overall trend, and that has been a flattening of the yield to indicate the markets do not see much inflation, even as chair yellen reassures people it is in the transitory, that we dont have much inflation. Banks rate news for the looking for that yield curve. Thank you so much, julie. Administration released a plan calling on the government to ease many of the rules imposed after the financial crisis. If President Trump gets his way, according to some estimates come the plan would unlock 2 trillion at angst. Joining us to explore who stands to benefit, so 2 trillion, is that a low number or is it kind of an estimate . Good question. It is an estimate. An hour after the Treasury Department put the plan out late monday night, after the news cycle had died down, wall street analysts scrambled to calculate what this meant. Analysts at bank of america came up with 2 trillion number four Balance Sheet or lending capacity. A huge number, and, it looked to be back of the envelope a little bit. Which is to be expected. They only had a few hours to work on it. The real question is do banks need capital release . Bankers with how you yes, we do. The capitals holding our way higher than it needs to bp we make more loans if we do not have to hold so much. They already have given a lot of capital back to shareholders. I went out and talked to people after it and said ok, banks can bring the capital down, will they lend it out into the economy and support growth as President Trump would like, or will they give it back to shareholders . Several analysts said to me they will more than likely give it back to shareholders in the form of higher dividends and higher buybacks. Which i to wrestle with the question of, is that really what the Trump Administration wants and is it what is best for the economy . In order to do that, they would have to pass the government stress tests, Something Else they are taking a close look at. Yes here the big stress test is what is coming in a few weeks, theyve talked about going from that being a oneyear test to a twoyear test, which would give banks additional flexibility. They have talked about rolling back the qualitative portion of is one part where the fed looked at stress testing and said this is not good enough, or this is good enough, and so a lot of banks had trouble getting over the qualitative portion because it is a little softer, it is basically the fed coming in and giving their opinion. It is very subjective, exactly. That, it wouldof open a more capital the banks could do something with. There is a balance to be found here whether you push that money out in terms of dividends or buybacks and how much you make available to the real economy here. You look at it and you can see auto loan delinquencies, credit card dealing with these rising, there has to be a calibration and a balance with regard to how much you push out if you can, that much money available for shareholders. Should there be conditions attached . I dont know. It would be tricky. Weve heard some Bank Executives talk about how they are reining in their lending. Any of theore Treasury Departments proposals take affect. Banks have money and they decided maybe they should not be lending out as much as they have in already. Becomes, will have a more excess capital actually lead to more lending, or will it go into the pockets of investors . Toit makes sense to tie it Infrastructure Spending or housing reform. If you it can but also, are doing those things but not changing the cash available that the banks could push out, people want to borrow money in order to finance house purchases or create infrastructure products and it does not make sense to tile these things together . I think you might get some argument against that in some circles in washington who would argue that is the government getting too involved in the Banking Sector by deciding what loans should and should not be made. I did not mean that the just the timing. If you have the Infrastructure Investment or reform housing finance, and at the same time, you are coordinating the availability of credit. Perhaps here at one thing to know about the report is they did look at different parts or different types of lending. The Treasury Department came up with specific postals for example. There has been a lot of talk for nearrime borrowers are prime borrowers, there is not enough credit available for them or banks have been too tight. Some proposals in the reports giving banks more flexibility, or lenders, it could be nonbank lenders as well, more flexibility and underwriting and things like that. In that sense, they targeted it and said, were not talking about lending in general are saying housing lending, what can we do to tweak that . There were parts of it that got it that. Increasing the supply and demand is the question. Thank you so much. The story is available on the bloomberg and bloomberg. Com. You can point to the rise in auto loans because these guys are not regulators in the same way. There are Credit Card Companies that hebdo with more bad loans as well. Right. Where those things have come tom, they are not regulated the same extent. Lets get a check on the headlines with mark crumpton. Mark during a speech tomorrow in miami, President Trump is expected to announce he is rolling back part of the obama administrations plan for relations with cuba. Did notckabee sanders provide specific details about the announcement but other people familiar with the administrative discussions have said the president plans to impose new limitations on commerce. Herald reports the goal is to deprive the cuban government of cash flow from American Travel to the island. As to percent of americans believe the president interfered in the russian probe according to the Associated Press and a survey, mostly democrats and independents take the president obstruct or impede the investigation. The polls are also split on whether the justice departments investigation can be fair and impartial. Only 22 support mr. Trumps decision to fire former fbi director james comey. Former brexit talks between the u. K. And the European Union will begin on monday as scheduled. A decision was made after discussions in brussels. That was concern negotiations might be put on hold after Prime Minister Theresa Mays Conservative Party lost its majority in parliament. Thousands of elderly demonstrators marched through for cutsthens today imposed by the greek government. The outrage of the shrinking sign of this, which many say they can no longer survive on. The cuts are part of efforts to ensure that greece gets its next installment of rescue loans from the european creditors. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am mark arkin mark crumpton. Up, Brian Moynihan toss about his views on diversity and inclusion in the workplace. Too, a woman could lead major u. S. Bank. That is next. This is bloomberg. Scarlet this is bloomberg markets. Julia lets turn to our segment where we look at the issues of diversity and inclusion. Hiringere focused on practices at big banks. Erik schatzker have the opportunity to discuss the topic with the bank of america chairman and ceo, Brian Moynihan. Listen in. We hear all kinds of argument for why banks should hire and promote more women. They make better risk managers, generate higher returns, they are less greedy, is that true . [laughter] is half the population at half the talent base you are dealing with. Those are interesting sideshows to the real reason. Are you going to draw your account from one half of the population . If you think you will get what you want, put any analogy out there, you are nba draft any want to choose half the people and others get half the people, you get five picks, he will not fare as well. I think all of the ideas get me, we payieve people very well if they are male and very well if they are female. It is on the job and what they do and how they perform. Soundbites here the real question is, are you going to draw from 100 of the population in an industry and a company that is completely dependent upon talent . People andy talented big machines and the way they operate in terms of Artificial Technology and data and machines like call centers. We do not make things. If you are messed up and you are in trouble. Come out and say why do you do these things. For those types of reasons. I had never thought of it that way. 10 people sitting there, and you want to get the best. Have you figured out a way to isolate diversity passes impact on the bottom line . Another pet peeve, i do not think it is a relevant question. To not serve half the customers in United States, females people of color . Then you are not going to get your talent. There is no bottom. So everybody came in, for years people come in and try to just just fight economically and im saying, you know, why are you bothering wasting our time trying to justified is economically . I could do to i can do math with anybody you do not have to prove to me that half the population should be excluded truck just trust executive, youre going to scoot half of the population coming think that will be any good . Things, i know some people take a completely different view. To me, it is the most irrelevant question at all. If he will not address talent and consumers, youre out of business. That was ryan moynihan, chairman and ceo of bank of america speaking with erik schatzker. Lets stay with hiring a big banks and turnout to a story that the other woman being ceo are now greater than zero. It is a good start. I will start with j. P. Morgan as an example. Recently left. I am looking at the mgm function on the bloomberg. Look at Senior Management, is there a number of senior women wealth matt management, credit card in business, and the ceo of consumer banking, that is a number of women in senior positions. That is a good thing but you normally do not see that many. Right. Leavinghe said he was the bank last week, it let everyone to start looking at who are the contenders to take over jamie dimonspot once he steps down as ceo. Two women are on that short list and that is a good sign because there is research that says once you get more than two women in odds godidate pool, the from zero to 50 higher that you will get the position. So it is a game changer. Wait, so if there is one woman outperforming the candidate pool, odds are zero, is that what youre saying . If you have one woman and the rest are men, you see a difference in gender. Foright be a riskier option a hiring manager to go with a woman. One more woman takes away the gender difference and now you are looking at the qualifications and not looking at, this is a woman to request him in when there is one woman, reasons andversity you are politely not saying that the when there are two, and this is statistics saying this. I should not be laughing but it does make me laugh. The good news is that four out of five banks now have more than one woman in the executive order or at least surrounding the ceo, which makes it more like a we see a woman at one of these banks of the future. Islets of the five biggest banks in with other Senior Management and operating teams and looked at those conditions that usually lead to the ceo, and how many women are in those positions . Coo, assetld be cfo, manager. Left auditors out of the analysis. For of five banks have at least he does women in those types of business that could lead to ceo. Which types . Goldman sachs. Interesting. It has some work to do. The diversity and management reporter for Bloomberg News, thank you. Lets all be judged equally. Exactly. Still ahead, looking for trade todays options insight, we are looking to trade and netflix. From new york, this is bloomberg. Julie julia this is bloomberg markets. Me for todayss options insight, chief operative strategy at interactive brokers. We were just talking about how volatile volatility had picked up a bit. Today, we see a pattern that has become all too familiar. In the last hour or so of trading, you get a phenomenon where stocks come off the lows. How much of this is a factor in day to day trading . It has become a real feature of the market. One of my colleagues and i looked at each other and said, what point do they get the market back to unchanged . It was not because we felt there was any real buying coming in. It just felt like the selling had come out and when that happens, i think investors, whether we talk about them being automated or not have got conditions conditioned to look for opportunities because it worked. Why not do so the that worked for you for years, even if it may not be the thing that works tomorrow, it has been working so well. Is that one of the elements that has helped to suppress the volatility, it has become predominant in the market. It is a feature of it. We do not have time to get into it here. A lot of strategies dampen volatility in one of those would the just the interest available in all the options going into quarterly expiration tomorrow. He by stock against it, at some point, it provides a dampening effect. Ofhink because of the amount customers and professionals who are long, the pressures desk professionals provide a lot of the dampening effect for the market. It has been largely concentrated in tech. We talk about the stocks coming down. Heres has to do with one that you see we have a chart of netflix versus the moving average. It is right at the 100 day moving average. Why is this important . It bounced off at this morning. It definitely seems to be the laggard. It is one of the only ones against a major longterm moving average. The reason i see that as being weak so to speak is their Business Model is not that different from the others. Think about it here facebook has a commanding presence in social media. Three of the others are in and competing. A oneey are more or less trick pony. It makes them more acceptable to a downturn. Inot in a position happen to like netflix personally, as a consumer. You have a bit more risk. As the concentration narrows, you have gone from broader index. It is not hard to imagine the one who has got the weakest Business Model would be the one to drop out. That is why i would say to look for traits that protect against that in case it is broken. We are out of time but we did show you the trade on the screen. Thank you. Chief operating strategist at interactive brokers, back to you. Still ahead, the fed is forging ahead with raising rates but the old curve is flattening. Chief u. S. Economist tom weighs in on the action. From new york, this is bloomberg. Mark it is time now for first word news. And a look annual congressional baseball game which dates to 1909 and is a summertime tradition on capitol usualwill be played as tonight despite yesterdayshooting during a practice. House Speaker Paul Ryan has assured lawmakers that the gang will go the game will go on, prompting a standing ovation. , stevese majority whip scalise, remains hospitalized and in Critical Condition following the shooting. Second baseing onto with serious injuries as the bullet traveled through his pelvis and injured internal organs. For other people wounded before police shot and killed the gunman. Health care deductibles and copayments will be higher in 2026 under the House Republican bill. According to they would average 61 higher for those buying their own policy. The government report calculated higher costs despite lower underlying payments. The Trump Administration says
vimarsana.com © 2020. All Rights Reserved.