Look at what to some other action was taking place in the markets. What were you watching, abigail . Abigail im going to talk about the risk assets but on a longerterm basis this comes from bank of America America lynch. He joined us for charting features. What we are looking at and yellow is the s p 500 going back to january, 2018. In blue, highyield bond index. In white, that investmentgrade bond index. We see as the s p 500 was putting an alltime high and a strong january, those bond indexes were sliding. As the s p 500 climbed into its september alltime high, they were climbing a little bit but pretty tepid. Out of the Fourth Quarter bottoming, a huge rally for stocks, investmentgrade bonds and highyield bonds. Believe a steve to new alltime high is ahead for the s p 500. Emma of course, the big move in markets today came in the oil markets. Both wti and brent crudes rising about 4. 5 . Should be able to show you a chart that shows as the highs of brent crude, the biggest intraday move since january. Wti bouncing off a five month low. Energy stocks were the laggard in the s p 500. It led the s p 500 today, all of this on the news this morning that tankers have been attacked in the persian gulf. Something the Trump Administration blaming on iran. There is fear that the rising tension will lead to declines, but they are market watchers saying todays Oil Price Moves were more muted. Than have been expected. That might reflect the weakness we have seen in oil futures through the year. Most recently, in the last few weeks, oil down 20 . Trade tensions weighing the other big thing in the u. S. Is inventories which keep coming in higher than have been estimated. Perspective on the oil move and the entire markets team, we thank you. Still with us, Michael Regan and ryan joining us. I want to go you go to you. You were mentioning earlier about how everything is about the fed and trade. If we dont get a rate cut as soon as june, do we need to have very strong verbal signals coming from the Federal Reserve that we could see one as soon as july if we will not see a fall off in stocks . Brian thats right. What the fed has been able to do simply through speaking and guidance right now is ease financial conditions. And stabilize the dollar. The dollar is weaker in june. Financial conditions are easier in june. The 10 year between the threemonth is not as inverted as it was at the end of may. Yeah, all of these things need to continue to pursue. We are still dealing with the lag, the effects of what i would characterize policy mistakes last year. Three rate hikes, we had good growth, it was clear it was going to be transitory. We tried it to do three rate hikes. It did not work. Now they will have two back away. Joe mike, if we continue to see a rally and a financial conditions ease, does that, in your view or the view of traders, take pressure off the fed . Do they need to deliver . For does that because i verbal intervention or verbal easing we have already seen accomplish something on its own . Michael think it is accomplishing it as we see the gains in stocks. One of the interesting things i noticed today was david coston was on tv saying they do not believe the fed will cut in july. Here is one of the strategists from one of the most wellknown wall street banks saying we do not buy it. I do not think it is a slamdunk that is priced into the market that they will cut 80 in the fed funds future is pretty high. It seems like it is a done deal. I think if there is resolution of the trade issues at the g20, which is probably a long shot, but if that does but if it looks like there is progress, may be the fed can push out that first cut if you meetings out. Caroline where are you putting money in the moment, where should people be putting money . Should they stay on the sideline, should they keep standing, or should they put money into areas such as emerging markets . Brian do not think investors should be sitting out. This is a secular bull market. Secular bull markets and with pretty expensive valuations and a policy mistake. Typically from the Federal Reserve. That is likely off the table. The u. S. Markets are likely to go higher. I still think we are in a growth and reasonably slow growth world. Look for the cyclicals, look for Companies Generating true earnings growth. Emerging markets start to look interesting. Emergingmarket valuations are cheap. You need a catalyst to unlock that value. Dare we say we could be coming to a confluence of factors . Fed easing or fed on the sidelines, may some truce between the u. S. And china. Chinese stimulus. Maybe you start to get some of that. Dont get me wrong, if we have a bad outcome on trade and we go further, that will strengthen the the dollar and not be good for ems. We buy when there is blood in the streets. The emerging markets, it looks like we could be coming up on a confluence of factors that is a tailwind for those asset classes. Scarlet the opposite would be Technology Given they have been the leaders. Mike, you look at Technology Trades sharing Technology Shares trading. It feels like not long ago we were worried about antitrust and how it would halt their growth prospect. No one is talking about that anymore, are they . Michael no one had thought about antitrust at all in years and then all of a sudden, it was introduced like a lead balloon into the markets and there was a nasty kneejerk reaction the day of. I think people are realizing this will take a long time and at the end of it, it may not necessarily be be any big jake be any big game changer. Joe i want to go back to. Something you said earlier we have had this long bull market. Basically about 10 years. We have had occasional many panics weather in 2011 or 2015, or q4 of last year. Talk to me about how they prolong it by do they prolong the bull market by removing some of the excesses and preventing really big financial imbalances that could blow up the whole thing . Brian went ends up happening is valuations become more compelling at the bottom of those. Policymakers have also found that they cannot proceed with their tightening. 11, 12,ng to remember 13, to your point, we were still dealing with the ecb raising Interest Rates in 2011. Then we had a deal with things like fiscal cliffs and government shutdowns. 2015, the fed tried. 25 basis points. Four rate hikes next year. The markets had no way. Dollar rallied 20 . It backed off. 2018, the 12 the Trump Administration put so we can do better than 2 growth and we have. We are growing over 3 . But it is not sustainable. The fed tried to raise rates, not sustainable, backed off, markets are doing well again. In a secular bull market, it does not mean you will not have volatility. Volatility will come around every time there is a policy decision that unnerves the market. Without inflation, and there is really no inflation anywhere in the world unless you live in one osiris or istanbul, there is no inflation anywhere in the world, why and it . Joe great question. Caroline where goes the dollar in all of this . If we see rate cuts, but the u. S. Continues to outperform, does the dollar still outperform . Brian the dollar has been stubbornly strong. You would expect if the Federal Reserve is backing off its tightening stands and it is in fact the end of the cycle, the tightening cycle i should say, and the United States is running pretty large fiscal deficits, you would expect some weakness in the dollar. And that is the idea behind all of this. Can we get a stabilization or even some weakness in the dollar . That would be the hope, that would be the easing of financial conditions that would support capital to other parts of the world and maybe get this Global Economy a little more synchronized, like we had in 2016. That is the hope. I suspect they can do it without bringing forth inflation and that is why equities are positive right now. And rewarding this. Scarlet brian levin brian levitt along with Michael Regan emma thank you. That does it for the closing bell. Taylor riggs is stepping in next four whatd you miss . The team will look at broadcom results. Should provide insight on the trade war impact as well as the state of the smartphone market. This is bloomberg. G. Caroline live from london, im caroline hyde. Taylor im taylor riggs. Joe im joe weisenthal. Caroline how u. S. Stocks closed on the day. They are rising higher. Up 4 10 of 1 . Joe the question is whatd you miss . Caroline trade wars take a toll. How will qualcomm how hard qualcomm has been hit by the chinau. S. Tensions . Crude concerns, oil rises as the u. S. Blames iran for a tax on two tankers near the persian gulf. Meanwhile, chinese president xi jinping faces challenges as protesters in hong kong. First, breaking news. Trump has just said that Sarah Sanders will leave the white house it would seem at the end of the month. She has been a voice of consistency for the white house. She became press secretary in july, 2017 through to the present day. We will see as to the reasoning of her departure but currently, the white house is saying Sarah Huckabee sanders, who was originally an American Campaign manager and political advisers, serving as the White House Press secretary. Now seems as though she is running for governor of arkansas is the latest in that news. Perhaps ambitions greater than the press secretary to the white house. We will see how the white house digests this. Joe certainly raised her profile a bit. Turning to the attack this morning, the Trump Administration blaming iran for attacks on two oil tankers in the middle east with secretary of state mike pompeo addressing the crisis earlier today. Mr. Pompeo the United States government, if the islamic public of iran is responsible for the attack today. This assessment is based on the intelligence, the weapons used, the level expertise needed to execute the operation, recent attacks on shipping and the fact that no proxying group has the resources and proficiency to act with such a high degree of sophistication. Us, professor brenda schaefer, senior fellow at the olanta Council GlobalEnergy Center where she is a specialist on energy and foreign policy. Thank you for joining joining us. What did you make of his statement earlier today . Thank you. I do not think secretary pompeo would make this statement without really concrete and explicit information. The Iranian Regime wants us to think there are two choices. These art either no sanctions or war. There is actually so many options in the middle which include extended sanctions, surgical strife, limited confrontation, but definitely the Iranian Regime is trying to up the ante and make it appear to the u. S. Administration that they are are only two options, either no sanctions or war. Caroline one about the optionality of how hard it is going to be getting oil supply . What they seem to be threatening is the straight of hormuz. They did not attack ships within it but just at the entrance. Could this be a significant supply shock to the oil market . Brenda of course, with the attack on the saudi airport, the attack on to other tankers that were in the uae, bring this picture together. Yes, at least iran is trained to create the impression that there is a concrete threat to security of supplies through the gulf of hormuz straight of hormuz. The u. S. Has the capacity and when it will be necessary to keep the waterway open. The big question we should be asking ourselves, with this threat to the center of Global Oil Supply is not why has oil gone up today . But why hasnt it gone up higher . This is hitting the center of oil at a time when a russian ne is knocked out and now physical hits on the main waterway of oil. Taylor i wonder if this speaks more broadly to our approach to iran . If this shows that it is working or if the attacks last month and the attacks today show that our coercion attempts are not the right approach . Brenda i agree with you that this is an upgrade in iranian havey or. I would say this is an act of desperation. This is the thing you do at the last minute. Clearly if there is a concrete threat to the straight, this will bring the u. S. To take action that is going to keep that straight open. This is not something that the u. S. Would tolerate. Using their own difficult ammunition at a very early stage in the game. Joe talk more about the policy response we may see forthcoming from the u. S. Nothing obviously imminently, but if there were to be more tensions, more attacks, what might we see the u. S. To do in response . Brenda i do not think at the current regime in iran understands the Trump Administration, especially on the iran question. I think they are looking at what happened last fall, before the nut the beginning of the sanctions on iran when all the declarations of the Trump Administration about getting tough on iran, they gave extensive waivers to eight countries. This highly disappointed saudi arabia. There seemed to be a risk because saudi arabia was continuing with the cutback. I think the Iranian Regime has it in their heads that the u. S. Administration is scared about high oil prices. I think thats wrong. I think november was two weeks before the midterms, Different Oil spike versus summer 14 months, 15 months before theyll let the next election. I think the Trump Administration is very serious on getting results and is not afraid about an oil price spike. Taylor caroline where does this put europe . Those that remained within the Nuclear Agreement with iran have been trying to ease their economic pain. They have not been efficient about doing that. Does this put europe into a bind on how to treat iran if we see u. S. Labeling iran as some sort of adversary and a threat to norwegian tankers and japanese ones . Brenda bright, and think we have to separate one we talk about europe between European Companies and european governments. I could say the same thing for turkey as well. In number of governments that have been against the reimposition of sanctions, have wanted to preserve the Nuclear Agreement. You are seeing serious compliance on the side of european countries, even turkish Country Companies which was an important market for iran. The sanctions are working, despite with the governments are thinking. The companies are saying we do not want to be cut off from the u. S. Market. They are not willing to risk the , they have worked better than anyone anticipated. A lot of it had to do with this being the second round of sanctions going back to the sanctions that were imposed under the obama administration. The mechanisms were in place. Compliance is much more serious. I think i ran much more serious than i think iran could have imagined. Joe what does iran do then . Obviously, the efficacy of the sanctions having devastating effects on the iranian economy, where do they go next . What do they try to do to create a breathing room or space . Brenda i think we will see more of these kind of attacks. I think they will become a new normal, it will be part of our middle east summer. I think and often iran uses its proxies. It could be terror targets instead of oil infrastructure. People, embassies, throughout the world, europe, anywhere, in order to create a fear. I think these are the kind of tools that you can only use ones. We saw this in 2006 during the israellebanon war when entially, iran overused you sent your medium raise missiles, once it is done, the threat is over. There are not that many more tools iran can pull out of the toolbox. Taylor thank you, brenda schaefer, senior fellow at the atlantics Global Energy center. I want to bring you breaking news on broadcom. These are numbers we were looking for. They are cutting their fullyear revenue outlook for the quarter they had missed on the top line, a beat on the bottom line. It is at full year revenue being lowered to 22. 5 billion dollars from previous estimates of 24. 5 billion. From aportantly, a quote ceo saying we see broadbase slowdown in the demand environment as part of continued geopolitical uncertainties. They are seeing the effects of export restrictions on one of our largest customers, i would make a guess that they are referring to huawei. They are saying their customers are reducing inventory levels and therefore, we are taking a conservative stance for the rest of the year. I think that says it all, as we know in that quarter, huawei was banned. Broadcom gets 50 of their revenue from china. Caroline one to watch. And the effects of the trade tensions. Lets have a look at the other political news. The white house, Sarah Huckabee sanders, has indeed a said she will be leaving the Trump Administration, or the white house has informed fs that. Turbulent 10year she has had. Near disappearance of the daily press rething. But she was there from july 2017 after the abrupt resignation of sean spicer. She has managed a rather effective carrier of President Trumps message. She will run for governor of arkansas. This is bloomberg. S is bloomberg. Caroline caroline a clarification, trump has said a Sarah Sanders will leave the white house as press secretary. He says he hopes Sarah Sanders decides to run for the governor of arkansas. President trump delivering remarks on a Second Chance hiring at the white house. We will be listening into the conversation he is currently having, and we will keep you abr