Destroyed its new missile. Missiles are capable of carrying nuclear warheads. And are hard to detect. Educe the warning time he declined to give details, but underlined that nato had no intention to deploy nuclearbased missiles in europe. Tonight, Democratic Candidates holder first debate hold their first debate. Elizabeth warren will be the only top democrat to take the stage tonight. The House Oversight committee has voted to subpoena Kellyanne Conway for testimony. She is of violating the hatch act. Week, the special counsels office recommended that conway be removed from federal service democraticging candidates. [no audio] tracks and off the it has raised concerns about the impact on various forms of wildlife including dangerous species. Endangered global news 24 hours a day, powered by more than 2700 journalists and analysts and at tictoc on twitter, in more than 120 countries. From bloomberg world headquarters, this is Bloomberg Markets the close. Just 30 minutes away from the end of the trading day. 500 on track for a very minor loss. Chipmakers up 3 . Have betterg is we than expected. Rallytty amazing considering how beatendown they were. Year yield hovering abound above the 2 mark. Off,e yen is getting sold the numbers continue to amaze the markets in the u. S. Some seeing the dow industrial jones higher, less than 2 10 of 4 . Also seeing Big Tech Companies higher. Half of it has come under some fire. Saying they President Trump saying they should be sued, though he did not say for what. Care. Com was one of the bigger decliners, down about 20 . One analyst on so far as to call it a red flag. Analysts saying the Machine Company up, continuing to gain, shares up 1. 5 . Anise analyst is bullish and it generates half of its [no audio]ue through seeing annalysts approved outlook and memory chip reducing. Turning to the democratic residential party candidates, they will take the stage tonight in the 2020 election cycle, but the Trump Campaign not letting. Hem deal with the spotlight i think its important the American People hear the truth because they will not get that on stage. They will be lying about tax cut and the economy. We are here to make sure American People outside the venue get the truth. The cameraspect will not President Trump for each other . See ahink we will freeforall, everything is free for all. We are confident people are going to vote to keep President Trump in office. Aboutryone is talking Elizabeth Warren. Joe biden tomorrow with bernie sanders. Were you going to look for from her . What are you going to look from her . I think the last i saw, she had over 123 trillion in new American People see how radical left the Democrats Campaign thesemp these as a four hour infomercial for why donald trump will be reelected. How is the revolt and party going to respond during the debate . The president will be on air force one. May or may not sleep tweet. We will make sure people get the ands that are out there debunking the lies coming out of the candidates mouth. Look at them as one big liberal organism and they get to face President Trump. Was our very own kevin serenity. Coming up, big tex under fire. Present from floods the possibility of suing facebook and google. Is reacting. Try tech under, big fire. The president floats the idea of. Uing facebook and google how the industry is reacting. President trump eric his grievances about social Media Companies today. He took aim at facebook and google and discussed the pop of the the possibility that federal government might sue them. Bloombergs ben brody covers tech lobbying. What, if any grounds could the u. S. Sue google and facebook . I think trump may be referring to the first formal steps and the Justice Department probings two probings for alleged misbehavior. Thing i thinkrst hes referring to where there may be court cases will stop the other thing is basically increasing the scrutiny. The president also mention the idea of a summit coming up in july with social Media Networks and executives. Do we know who is coming and the purpose of it . We dont know or at least the white house hasnt responded. On the other hand, only a handful and i think it is reasonable to think that at least most of them will be participating before or during. What im looking to is when trump met with jack dorsey, in theere three topics other two, and the online opioid sales. [no audio] it is also major issues being dealt with on a policy level. I expect those will probably be on the agenda. Noticeable that hes threatening to sue facebook and google. The eu has the audacity fining google and looking into amazon. How much will the u. S. Put pains to regulate and what of the areas you are interested in . We have been looking at privacy and antitrust trying to bill. Orward a privacy in the last days and weeks, i noticed that members of congress are very interested in getting more information about the algorithm that drives these particular companies and you have the Republican Senate to see theerday. Ontent on the platforms it is unclear, but a new level to regulate algorithms. That is bloombergs ben brody from washington. A quick check of the latest business flash headlines. Has added someone to its roster for possible restructuring. Shares of blackberry falling the most in the year. Athing acquisition less of auisition boost than anticipated. Smash. , avocado expected toocado continue to rise until mexican farmers continued to harvest the summer. He also tweeted out a great chart that shows the euphoria of bitcoin and of a condo prices. Prices. Do it is interesting. This is bloomberg. 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Joining us everyday at this time is joe weisenthal. Avocados, what can you keep an eye on today . Really is a crazy move, giving a 2017 five to the market ibe to theh market. [no audio] the underperformers. It is not a very to meditate, but it is straightforward. There are so many headlines out and the president made some and probably will be some tonight with the debate. [no audio]eason fed,ump talking about the talking about monetary policy, regulating the tech companies. It makes you wonder why we are seeing some much risk. Available, stanley fischer, the boe is always hiring. Lets look at how are doing in terms of the market. Of upuctors of 3. 5 . Proxy. Downside, a bond im not too crazy about this rally. You are not seeing the names you want. That sex has been the key performer, the s p 500 basically flat. Minutes away from the close. It has been a rough few days for shares of Companies Involved ,n forprofit prison industry the latest hit came tonight after bloomberg reported that bank of america will stop lending to the industry. That is a key group. 18 andstocks are down afterspectively, mainly Elizabeth Warren said she would make ending private persons prisons part of the campaign. Follows similar decisions by jpmorgan and wells fargo to end their relationships with industry. Days may be a couple rough for the private prisons, but not 39 . Ch for bitcoin, up joe was making the 2017 comparisons and then there was the crash. For facebookation and that is lifting some of the crypto stock. We could see a reversal coming, but right now, bitcoin on fire. Energy sector also having a , they good day bestperforming sector on the s p 500. Most at thesing the beginning of the year, putting really good days, all rising between four and 5 . Also, crude and refined product exports has had a record high as well as gasoline around a record high. We heard that the largest refinery on the east coast is close following a fire. Now. Ts get more analysis eye on the back of earnings. We have seen the names coming out to you have micron and fedex. I was a before actual earnings come up we also have to Pay Attention to the g20 of course. When they said they found a loophole resuming shipments to , for semi conductors really caught in the middle of everything going on between the u. S. And china, micron derives 13 of its sales from what way huawei, so this is a huge deal and that is why you see every single stock higher. As we head to the market you very much for. Oining us what you make of the current expectations . Do you think given all the a companyadwinds that in the s p 500 can be dumped . Its uncomfortable for many investors. Do i think it is problematic for the market . No. Were seeing a lot of analysts as a whole for the year, but at the same time seemed in standby their price sense of oneaking that is going down. I think investors are trying to understand and i headed to a recession . Not, so youe are dont necessarily need to be concerned about the price is much. Trade willdata from result in a minor change. It does not necessarily want a change because we dont view it as recessionary. Health care has been under pressure, but also tech. Oft do your sources make trumps call to sue them . This adds to all the talk we have heard about antitrust and yet, we did see facebook and google take a bit of a hit today, so it is pretty minimal and the fact of the matter is investors are saying until we actually see some for movement on this, itll probably take five years for the investigations to wrap up, it is not too much of a worry. Important from a market standpoint seeing the direction it is headed in . We are concerned of the direction it is headed in. Theres still an open field for the democratic candidate. It is a debate over a couple days. We can see what the candidate looks like, we will make a difference. We are unable to break that lower. The s p tracks we saw the number of Companies Making new highs decrease. Had these losses. They have been mild. The market repricing how much the fed will cut. Lets dive deeper into the action. What are you watching . Chart. S check in on a 500 over thee s p last 1. 5 years. That is an important level. It is a range. Each time the s p 500 has gotten above that range, it has gone back in. We are looking at a newer version that suggest a move. This chart probably supports that. You need to stay above that top trendline, suggesting nearterm bumps. Rsi comingk at that off the top. There was one close below 2 before it jumped above that level today. Worststate is the performing group in the s p 500, down 2 . Real estate tends to underperform when bond yields rise. It is also increasing borrowing costs. Real estate is down 5 over four days. The worst performance for 2018 that time period, suggesting Equity Investors betting this rally in the treasurys market is running out of steam. Now it is time to take some profit in real estate. That was the best performing group in the s p 500. Have gold retreating from its high. We are seeing a taking of breath from that rally. Analysts saying that may be the reason. Were also looking at gold above 1400 amounts. Speakheless, fed dampening down expectations of the scale of the rate cut. Also some profit taking given that big runup. Rsi still the signaling in overbought territory. It has come down. We could see gold fall further. Analysts saying the trend for the foreseeable future should be upwards. Our guests have still with us. Had a little selloff today, something we have not seen for a while. Did treasuries get overextended . They are just reflecting the Economic Data incoming. The biggest concern we have is the pace deflation in the ism. That is what the treasury market is reacting to, what the hard data is telling you. Joe that piece that came out yesterday evening tracking some of the things making people nervous about the market, some real Economic Data, some sentiment. Resonate . At did a lot of people say they were nervous . Did it feel like there are a lot of people willing to predict a bear market . This is the top for those who are predicting it. Those who are growing more nervous, absolutely. One indicator was the Consumer Confidence data we got yesterday. In the stockidence market are intertwined. They are highly correlated. The case can be made we saw the top and october 2018. Sinceday, the lowest 2017. Nothat is true, that bodes so well. There are warnings for the Overall Investment cycle. There are other indicators you can watch as well, but there is a growing sense of nervousness at this point of time. Are you telling people to do . We see it limited upside from here. When we look at the data, is it decelerating . Yes. What does the pace of deceleration look alike to the next several months . Will we careen 30. Inflation data is soft. Consumer data is healthy. The labor market remains healthy. I think the reading in july will give us a better indication. You have two pillars of the economy still doing well. In julythe fed does cut as the market expects, what does that do . Does that give a boost to the real economy, or is that largely something that works to the financial channel . Is not looking to materially boost the economy. Theyre looking to adjust policy around the long end of the curve , reset liquidity conditions around the 10 year or 30 year, as opposed to cutting in the sense that we have a recession and need to do a stimulus of the economy. It is something to move the needle, but not necessarily stimulate the economy. When we are looking at the Economic Data, in addition to Consumer Confidence, we head home sales data in terms of sales and pricing suggesting some weakness. We are awaiting kb homes earnings today. Lennar said they are having problems. Have a similar issue . We are seeing more buyers because we have lower mortgage but the this time, Economic Data has been slowly softening. It has not completely fallen apart. This is why people are saying the fed should come out with a preemptive cut, but now im seeing . Isaround the fact whether it going to be an insurance cut. But now im seeing talk around the fact whether it is going to be an insurance cut. Caroline what are you making of the moves in oil . Our downgrade of earnings was reflecting the fact that oil has fallen over the past several months. The geopolitical backdrop thinks oil will move higher, energy will do better. It is really a beta play on oil. If we get an indication demand is increasing or geopolitical tensions are rising, it is likely that to bode well for the energy sector. Romaine id like to go back to this fed cut on this idea that we get the cut as the market expects it to be that that would add fuel to the fire. Is the cost of capital really holding this market back right now . We agree. We dont believe it is the cost of capital. Clients are programmed to say yield curve converts, i need to understand what the problem is. Its not that you occurred reflects a problem, but signals telling investors you should be concerned. Signal, iting that removes that discussion from the table and brings confidence back. Or 50 in july . It is out of my league to say. I dont know. Caroline great to have you with us. That is it for the closing bell. Whatd you miss . Is up next, where we will look at President Trumps comments and much more. This is bloomberg. Caroline live from new york, i am caroline hyde. Joe i am joe weisenthal. The question is whatd you miss . Caroline the president threatens tariffs and says mario draghi should head the fed. Senator john kennedy tells us why he is concerned about facebooks crypto coin. And the state run oil giant is looking to restore its finances and move beyond the scandal that rocked the company and country years ago. Romaine breaking news. Kb homes earnings are out. Fall, butd eps did less than expected. . 51, quarter eps at estimate . 38. 1. 02 billion. No guidance, but shares up 6 . Caroline it all comes down to the g20. President trump warning he made have to resort to plan b if there is no progress on the trade deal. A,t plan b sounds like plan more tariffs. The president threatens 10 tariffs on all remaining goods from china. We have the story. There isnt some kind of handshake and resolution. The mood music is so mixed. On one side we have Steven Mnuchin and seeming so optimistic. We are getting conflicting signals. A seeming bearish. Steven mnuchin and things were 90 of the trade deal that will be completed by the end of the year. Robert lighthizer speaking with the chinese vice minister in charge of trade, speaking positively, hoping the meeting scheduled for saturday between president xi jinping and President Trump would be positive. We have three positive things in one negative thing. I will say it is a positive thing. Is the realistic expectation for this weekend . Joe sunday night to come are going to open. What will set the tone for this . The market would be happy if it saw Something Like a noncombatant coming out of both sides, something along the lines of trump saying we will hold off on that plan b or plan a. We are going to hold off on new tariffs and we will give negotiations another chance. That would be very positive for markets. R