The rest of europe is open, today. It is lower, falling on the stronger euro, the highest level against the dollar since january 2015. 77 use of the u. K. Holiday, below the the french Advertising Company confirmed the industry slowdown which was signaled by wpp last week abandoning its forecast, clients pulled back agencies slashing spending and prices. The chief executive officer joining wpp inciting a slew of problems affecting the industry, from declining investment by clients, economic downturn in higher Growth Markets and hard bargaining as agencies fight for business. Ad Companies Worldwide are being hit. Shares are little changed on the day. The euro against the dollar rising to its highest level since january 2015. The euro is on such a carrot the moment that it took nothing at all on friday from the likes of mariota johnny mario draghi to drive it to its biggest gain this quarter. The concern Going Forward is it may take precisely nothing again to bring the euro back down. Bullish positioning has been building up at a arguably more rapid pace than even the runup in the spot dollar rate. Leverage funds which is this chart, more doubling the net euro longs to august 22, close to a threeyear high. That is a great ship great chart. Capital describes this chart right here as a nightmare chart for central bankers because when they see negative yield, as you can see it is creeping up, what they see is little measures to move when the economy slows down, once again. Hamstrungrs will be when the time comes to begin the next easing campaign. That is what that chart tells us. How is a looking over there, taylor . Taylor things are mostly green on the screen and those gains increasing as you were speaking. I get a sense of this push pull feel. You look at the s p up about 1 10 of 1 but gilead is helping pull entire. Kite, which gilead is purchasing, is in the russell 2000, those gains helping push russell 2000 up by about 2 10 of 1 . Nasdaq is higher, much stronger due to apple. We just heard in the last few hours that apple is planning a new iphone launch event on september 12. A lot of anticipation coming out. You are seeing a lot of that strength transition into some of these laser sensor providers. Harvey big story is bearing down on texas. We were looking at oil and gasoline. Earlier this morning, crude was higher. Oilave about a quarter of production in the gulf of mexico shut down and almost 15 of those refineries are shut down. How is that translating into some of those refineries . They are not making light of the situation by any means. Some of these refineries are seeing big gains. Wells fargo is saying prior to many of these events in the gulf, shares of these refiners outperform to the other major indices by anywhere from 6 to thefollowing the days when hurricane makes rainfall makes landfall. Some good news for the refiners. Lets recap and look at how this translates into the gas prices on your pump. You are seeing it up to about 2. 37 per gallon. When you shut down refineries and the supply, that means demand gets a boost. Vonnie thank you for that market check. Lets check in on the first word news. Here is courtney. Courtney it is being called a tragedy. Harveyl storm karl he continues to better texas with record amounts of rain. Floodwaters continue to rise in parts of houston and authorities have told residents that it was safer to stay in place when the storm hit and now thousand theyre asking to be rescued. Harvey has crippled the core of the u. S. Energy industry, halting about one fourth of oil and Gas Production in the gulf of mexico and more than 10 of. He countrys Refining Capacity to Texas Governor said Oil Companies were ready for the storm and will restart production once the floodwaters recede. Harvey has turned into an Economic Disaster for texas. Damages likely to rise into the tens of billions of dollars. Are that aates unusually large share of victims do not have enough insurance. Less than 16 oh homes in the houston area had thorough Flood Coverage and that would leave millions of homes in the area unprotected. Texas is not the only area suffering. Up to 20 could get inches of rain and the southwestern part of the state. President has declared a state of emergency for the southern part of the state. Bal news 20 howard global news 24 hours a day powered by more than 2700 journalists and analysts. Vonnie harvey has crippled the core of the u. S. And is Energy Industry and if you type on the bloomberg, you will see the projected path. You can see the blue on their operational and the red ones are out. Centers fining joining us with the latest is tina davis, Bloomberg News energy and commodities managing editor. That could be a lot worse. Tina on friday, we had about 5 of capacity shut down. On saturday and sunday, that doubled, so i dont think we are out of the woods in terms of the capacity numbers right now. We will have to see as flooding. Ontinues into louisiana that is another part of where these refineries are located. You can see on the bloomberg that if you type in u. S. , you that if that reaches louisiana and alabama, you could be talking about another 3500. Tina this is a Million Barrels of capacity, a day. That region accounts for almost half of what the u. S. Has in terms of Refining Capacity. The consumersly in houston that are going to be looking at higher gas costs. Vonnie the fact that companies are shutting refineries, it does not mean that they will be safe from the storm, because they can still get flooded even while it is nonoperational. And salt and machinery do not do well together. Talking about substantial storm surge in these facilities like we saw in 1998. Hurricane georgette the coast and at that point, they had pictures of alligators in the control room because there was a lot of water everywhere. If you see substantial flooding, it will be a matter of weeks before these come back online. Vonnie and things like cotton, soy, wheat as well. What about demand, because obviously people are not driving their cars right now. Not to be mercenary about it, how long will demand be suppressed . Tina that depends on how long the rain lasts. Without invite without an order for evacuation, you will only see a little uptick in demand. We are also heading into what is called the shoulder season for refineries where demand with declines after the summer and everyone stops driving around a vacation. The demand outlook is a little less clear. Vonnie tina davis, thank you. Is askingan red cross for your help with the disaster in texas. The organization already has dozens of shelters up and running, but it expects the crisis will grow exponentially and thousands of texans will rely on the red cross for food, water and a place to stay. All donations are taxdeductible. Mark coming up, the brexit talks have resumed in brussels as u. K. Prime minister theresa may faces increasing pressure from both the eu and the Opposition Labor Party at home. The latest next. Vonnie live from bloomberg World Headquarters in new york, im vonnie quinn. Mark and i am mark barton counting you down to the european close in 16 minutes. Lets turn to the latest on brexit talks, resuming in brussels. Makinge bonnie statements just in the but ago. To be honest, i am concerned. Time passes quickly. I welcomed the u. K. Governments pay per we have read them very carefully, but we need u. K. Positions on all issues. This is necessary to make strategic progress. Mark joining us now is and the ross thomas. The ing us now is and emma ross thomas. Says there are three things that need to be dealt with before talks can move on to trade and the u. K. Position has been about the future relationship, about a to protection and customs arrangements and what he is saying is we need to talk about the financial settlement, when you talk about the border with ireland. Need to talk about the border with ireland. Said i am concerned, time passes quickly. A very clear warning to the u. K. Mark ands the need for a transition arrangement possibly at the end of negotiations emma ,. Bys weekend was dominated the new position of the labour party. Emma we have clear blue water between what the labour party thanks and what the governing conservatives think. For a long time, the labour party had been muddling along, but bear in mind that a lot of theor supporters labour party came out and said they won a transition agreement of up to four years and what is in place right now, Single Market and a customs unit, businesses would be delighted at this came about. What this means is it sort of opens the way for lawmakers in the conservative party who want a soft brexit to make friends and perhaps table amendments. Mark which could put pressure on theresa may. If she sides with them, the more probrexiteers could be up in arms. This new labor position opens up all sorts of permutations. Emma it does, but it also opens up the debate. The labor position on brexit has meant that certain things the ship has sailed. Now the labour party has a clear position and so it is not mark and businesses will be happy with the new position. Anything solid going to be addressed in this round three of talks, or is that Wishful Thinking . Emma weve got until thursday. There have been talks behind the scenes that davis and highlevel eu officials are on board with some kind of transitional deal by which they will pay certain amounts into the budget, over three years, maintain the access and this could actually be achieved. At the moment, it is very much behind the scenes. Ross thomas,a bloombergs London Bureau chief. Vonnie so lucky to have you in. Thank you for coming in on a bank holiday in london. Still ahead, we are talking with john rogers, ceo of ariel investments. Finding opportunities in the longrunning bull market. This is bloomberg. Mark live from london, im mark barton. Theie and live from bloomberg World Headquarters in new york, i am vonnie quinn. Annual symposium in jackson hole wrapped up this weekend. Bloombergs Michael Mckee got a chance to sit down with clevelands fed president who has been more one of one of the more hawkish members but of the fomc. Monetary policy is still accommodative. The gradual path of normalization is really a gradual path and my argument of why you want to stay on that path is because we are in a more normal economy. Inflation is not yet at 2 , but what we learned is we have to move policy a little bit before we get to the goals or we are going to be behind or potentially left behind. We could find yourself in a bad spot. I would not say i may advocate of higher rates. I am a advocate of keeping on this more gradual normalization path where we are taking away some of the accommodations we needed to put in. Ofhael you think the risk higher inflation is greater than the risk of higher rates having a damping of act on the economy . Loretta there are a number of risks. The underlying momentum of the economy is very good. We have very strong labor markets and we have seen that overtime. Seen the growth has been maintained at a little above 2 or so and a think that is very important because we have had a lot of shock says the economy and the economy, but the economy has proven to be resilient. Inflation has not gone up to our 2 goal. Of can point to someone factors to some one of factors. I expect inflation to remain below 2 over the next couple of months or so, nearterm and then eventually rise up to our 2 goal. That is not that is my consistent with that, we want to have accommodations being gradually removed from the economy. Michael is there any data that would cause you to change your view of it, that the combination should be removed . Loretta one of the forecast is inflation expectations. So far, i think they have been very stable and that is a very important factor in the inflation forecast. They move down, but the kinds of i would be worried if the low Inflation Numbers were telling us that aggregate demand was falling and that is the reason prices were coming down and therefore expectations would be unanchored. I dont see that in the data. I dont project that is what is happening. That would be the factor that would be significant in my view that there is a bigger problem. Michael what do ceos in your district tell you about their Pricing Power . Loretta most i talked to in businesses and labor market are telling me they are increasing wages. They are not necessarily increasing prices yet because their margins are still constrained. In terms of the wage part of the equation, wages are moving up and i expect that will eventually feed into the aggregate numbers. A very important factor in that wage growth is the productivity growth we have seen, which is quite low. There are some firms that have been able to increase prices, which have not been able to do that for a long time and wages seem to be moving up gradually. Mester inretta jackson hole, miami wyoming. Mark time for a look at the Bloomberg Business flash. Amazon is quickly putting its stamp on whole foods. The world ticket Largest Online retailer spent its first day as owner of the brickandmortar grocery chain slashing prices. Amazon just closed its purchase of whole foods for 30 13. 7 billion. A big transaction in the pharmaceutical business. Gilead has across has agreed to buy kite. Kite has developed new technology for using the bodys immune system to fight cancer. Gilead wants to expand beyond its eroding hepatitis c drug franchise. Uber is turning to the travel industry for its next leader. Expedia ceo will be named as ceo of the ride hailing company. She is considered a he is considered a seasoned dealmaker. That is the latest Bloomberg Business flash. It is a quiet day in london. Markets closed in london because of the august bank holiday. Down for a second day, the stoxx 600 down by one half of 1 . I will leave you with the currency board as the euro inches up another milestone against the dollar. This is bloomberg. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. Mark live from london and new york, this is the european close. It is a bank holiday in the u k markets are closed here, open elsewhere in europe. The stoxx 600 fell for a second day. Stronger euro, highs against the dollar since highest against the dollar since january 2015. Billionaire planning to buy back a billion euros in stock while continuing to look for potential acquisitions in telecommunications companies. People are saying it is or was interested in charter communications. This is a interesting chart. The gap between gains in the emerging markets and losses in both is widening. Index is notmark been able to recover from that slump. Armani tries to trim a large budget deficit caused by lower oil revenue. Both indices are down by 15 trackingto a increase emerging market market stocks and i will be talking about it otcmerging markets in the in 30 minutes in botc in 30 minutes. A disclaimer, i have never watched game of thrones. What i am trying to do is improves impress you and show you the power of the terminal. The terminal shall use the reallife shows you the reallife location of Kings Landing and winter fell, all sorts of places. Unsullied . E of the vonnie i am not going to give anything away because youve got seven seasons of bench watching in front of you. You will just have to wait for those answers until you look those up but i want to have a look at those functions afterward. Btv 166. Vonnie that is what banks hot Bank Holidays are for. Here, we are processing jackson hole and harvey. Down to itsndex is january 2015 lows, just above 92. Crude oil futures are down per barrel, impacting demand for wti and pushing brent up. Natural gas is higher at 1. 5 . Gold futures have their first close above 1300 an ounce on friday and right now, we are at 1312 and change. You can see that because of the dollar being so low, janet yellen not offer anything supporting the dollar. Buteuro is stronger, currencies like the indian rupee and the yuan, some carrying trades. Mark it can be a lonely business. Buying stocks cheap means believing everyone else is dead wrong. These days, that is getting were harder and harder. Just ask john rogers, the founding chairman and chief investments,ariel here with our own erik schatzker. Erik good morning. It has never been easy being a Value Investor in a bull market. What is different this time . John this time, it has been interesting that the cheaper stocks have actually been under. Arming in down markets in my entire history of the last 34 years, if you had a low pd stocks, those would outperform and not do well in up markets. Recently, it has been kind of the opposite and that is strange to me to see these cheap stocks underperforming. Erik why is that happening . John the cheaper stocks are in the Cyclical Industries at a Financial Services industries, so those are industries that maybe dont people and be dont perceive as doing well in a declining market or if the economy takes a downward turn. Also, though stocks did not do well when the financial crisis happened nine years ago. I think history is going to repeat itself in the same way, which is which has not necessarily happened every time. Erik do you think it is going to happen that way . John i dont. I think those the those of us that stay with triedandtrue value stocks, Good Companies that have strengthened their Balance Sheets since the financial crisis will do surprisingly well in this downturn and will outperform substantially, some of these large cap as some of these largecap Growth Stocks have their comeuppanc