A handful of nations say they will back a yet to be finalized trade mechanism. The Trump Administration has introduced another round of sanctions top venezuelan officials. The Treasury Department has increased sanctions against the illegitimate regime of nicolas maduro. Son say nicolas maduros was devising a plan to pressure deny humanitarian aid. The 737 max is not the only boeing jet accused of having software issues. Pilots have reported Flight Control problems they blamed on software bugs, according to an Aviation City the database maintained by nasa. The amount of computer code in a typical commute from jet has commercial jet has grown 40 in the last decade. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Live from bloomberg World Headquarters in new york, im Darrelle Revis taylor riggs. Amanda im amanda lang. Welcome to bloomberg markets. Here are the top stories we are following from around the world. Investors await president donald jinpingschinas xi meeting at the g20. Deutsche bank passes a test and makes its new restructuring moves after it survives the feds stress tests. And we take a look at how chinas ban on canadian meat could swamp u. S. Markets. Lets check in on the major averages here. We have a little bit of weight and see from that communicate. Markets monday may have more to trade on. Thanks front and center, passing the stress tests. We can quibble on the details. Announcing by banks and dividend hikes. The big financers are the ones driving the s p 500 higher. Take a look at this as we hit the midpoint of the year. Stocks and bonds on a total return basis have had the best first half of the year since 2010. You can see pretty nice levels in terms of returns. The big question now, does it hold its ground in the back half . Often that the case. Taylor we just wrapped up real yield, and all the strategists assuming ending the year higher above 2 . Love that you tied in the bond and equity portfolio conversation. Folding that into commodities, oil has been fluctuating between gains and losses. You have some resolution of the opec plus cuts coming tomorrow. We knew that russia and saudi arabia were preparing to meet, extend production cuts. Then you have signs that oil was higher, so u. S. And are boosting more drilling activity. At least for today oil is a little bit lower but certainly a fluctuation as we await that opec plus meeting this weekend and into next week. Of course, we are watching the banks today. U. S. Bank stocks rallying in a big way after they passed the Federal Reserve stress tests. Also saying they will pump out some of that cash to shareholders. A rare win for Deutsche Bank which has failed past tests. The bank also saying it will cut half of its Global Equity jobs thanks to [no audio] note a prize to anybody. What is a surprise is how much of a raise in their pay is to investors after definitely something that was well more than expect it. Speaking of quibbling, there is some concern that banks are increasing their payouts just as the economy may be getting into a more precarious place. It is not that everyone is thrilled. Everyonee up for today, investors have something to be happy about because of the high payouts. One thing that struck me was goldman and Morgan Stanley have been able to return so much to investors, even in the year where they are doing their largest deal since the financial crisis. Taylor does this mean we are in the all clear . Once you pass the fence stress tests, we can breathe . There have been concerns about the dovish tilt, cutting rates. Can we rest assured that rates are ok . That is a great question. In a couple of weeks we have bank earnings. A lot of guidance about how Trading Operations in particular will not be so bright. Interest rates will be lowera lw trading and we will see how that impacts the lending activity Going Forward and what returns we will be getting from lending activity. Two weeks from now we will have a better picture but this is a good sign. Especially because not every bag passed last year. Amanda what about Deutsche Bank . Rumors of job cuts. . Anything that we know now that we did not know before about how they stand we know the extent of the job cuts and when they will happen. Until now its been a hypothetical. Thinking of cutting equities. Now we know that there will be hundreds at the very least globally, especially in the u. S. , where they will be scaling back on equities, according to people familiar. Taylor talk about that 20,000. They say it is global. Where should they be targeting given there are varying degrees of profitability between the u. S. And germany, for example . You are0,000 figure referring to was reported in the journal today, something that is over a number of years, and it is still a hypothetical. Already,you can see the u. S. Is cutting equities, at the Investment Bank in particular. There will be cuts in asia. This goes along with the global theme of Deutsche Bank that it is retreating to become more of a german player. Taylor we look forward to those earnings in a few weeks from now. Now, of course, its all about the g20 meetings between world leaders. How should investors position themselves as President Trump and xi meet facetoface . Win with a perspective is thin. Year to date, dollar index, strength until may. Then you have that fed dovish pivot and the dollar begins. Do you assume, given the global uncertainty, g20, trade tensions , that it is dollar weakness from here on out . That is the easy trade everyone is piling onto. I would take a contrarian view. Everyone had zero rates. Ae fed had cut and we had strong dollar trade. Now everyone is saying the u. S. Is going back down. Two things that i would caution investors. The rest of the world is also going down. The ecb is seeing up rate cuts. The markets are overestimating the amount of downward shift. The market is pricing three cuts this year, between one and two next year. Those are not insurance cuts, those are recession cuts. Yes, you have had week data here and there, but very constructive on the u. S. Economy. I dont think the fed will be cutting as much as the market ranks. Were under some nearterm pressure but once the overestimg the amount of downward shift. U. S. Outlook becomes clear, fed outlook becomes adjusted, i think it is all higher. Amanda we heard from the San Francisco fed that she is not concerned about the effects of trade wars in the data. Would that change for you if we do not see a deescalation that we are hoping to see at the g20 . Back to what your previous guest said. It is really kick the can down the road. They are starting to talk. It is a great storyline. But the two sides remain far apart. The base case that they reach a deal toward the end of q3, maybe q4. Both sides are starting to experience some serious pain. Manufacturing numbers coming out, showing some weakness in june. I am not pushing the panic button, but it has gotten the attention of policymakers here. Farmers are suffering. In china, we know they are struggling to stimulate the economy. As the pain builds, i think the deal will come. We are not there yet. Taylor i remember you from the emerging markets desk, and you really studied em currencies. Given your call that the dollar does not weaken, perhaps we see dollar strength, hold that back into your old world of emerging markets. Do we have to assume emerging markets struggle . Yes. Everyone thinks, the fed is cutting rates, that will be great for em on the rates side. Tw rebuttals. Is also cutting, india, the philippines. Many will be joining the ranks in the coming months. In january,d out the liquidity story enough is not enough for em. A big part of the story is global growth. On there constructive u. S. , we know china is struggling. You will not see a hard landing there, but as long as this turmoil continues, that will weigh on global growth. That is a negative for em at the margins. I am getting a little more wishywashy but im still at the margins negative on em. Veryr wishywashy, a official term. Amanda one of the differences in your world today, from the white house, clear indication that it is thinking hard about currencies being manipulated, held below fair value. All behaviornge at when you think about the ecb, particularly china . There is a lot of noise in the markets. The one signal that this administration is sending is continuing on his hawkish trade stance. That is spreading into the currency world as well. They are basically doubling down on that. Going back to what taylor is saying, that is another reason to be cautious on em. Get this china story out of the way. If anything flares up with mexico again. We know the japanese auto story will come back in november for the tariff deadline. It is a rolling checklist of trade turmoil ahead. Inis very difficult for em this environment, tough for analysts, that is for sure. Taylor as we know in the currency world, it is all relative. The fed cutting but the rest of the world cutting more. Into a dollareuro conversation, how do you square the two, given mario draghi and we are dovish. Do you have a call on eurodollar . Maybe down to 1. 10, getting to 1. 05. It has been a struggle. I hate to say currency war. Has been set to try to reflate the economies. Currency is the tail on the dog. Any of these countries are not the currency. Weaker Monetary Policy is part of that adjustment. Say, within this world of mostly zero rates, the u. S. , fears, these bond market the u. S. Economy, Interest Rate story is head and shoulders above everybody else. Amanda great to have your thoughts on this, win thin. Coming up next, hold the beef and the port. Chinas extension of canadian pork imports may upend meat trade inflows in america, potentially producing a glut. This is bloomberg. Taylor this is bloomberg markets. Im taylor riggs in new york. Amanda im amanda lang in toronto. From has been made imports canada. Canadian supplies intended for the asian nation may end up looking for a new home in the u. S. The problem is the u. S. Says it does not need any more pork. Michael, i want to start with, we heard from the canadian producing associations that they would look for other places beyond china in the short term. Is the u. S. The easiest, simpler destination, and does that mean that prices are likely to fall there . Yes. About three quarters of canadian pork comes across the border as exports. More of that could be coming with china not in the market. China has brought in tenfold more canadian pork than 10 years ago and there is not a ready alternative other than the u. S. At this point. Taylor the timing of this all screams escalating trade fights. How does this conversation about work and protein fold into the g20 . Is this another trade issue we have to deal with . Indeed it is. Trade issues are stacking up. Dealing with a massive outbreak of african swine fever, where millions of swine have been killed. They need more pork. We have a lot of it in the western hemisphere, but these trade disputes are getting in the way. See,a very interesting to even our minister here responsible for the file, so that there was counterfeiting going on, they dont believe it was canadian product at all, a third party to get into china. Pork,did not just block which may have been a reasonable response, but they also blocked beef, which seems like an obvious overreach. What about the beef side of the equation, do we similarly find our way to the u. S. Market . It could be coming here or just staying there. There is an awful lot of pork and beef here in the u. S. It is not exactly in need here. If prices are low enough and people on the other side of the border see an advantage, they could try to buy some cheaper supply. Of the michael, one bigger issues as we look to the u. S. Market is u. S. Producers ramping up production in hopes china would also be purchasing our pork and beef. China alone has their own tariffs as well on our products. How caught off guard are u. S. Producers now given the heightened tensions we have been discussing . Yesterday, there was a ust report that showed the hog heard the biggest since the 1940s, and a full percent larger than expect it. Today, hog futures are up sharply. Traders are getting the benefit of the doubt that something might be able to be worked out when trump and xi meet this weekend. Amanda we will leave it there, thank you for being with us. Taylor, when we talk about the business certainly in the u. S. , the vegan friendly category is a bit of a threat. And burger getting a lot of headlines. It apparently has a new champion at their open house. Who should show up but agricultural secretary sonny purdue. Asked about what he thought about it, he said it tasted pretty good. Taylor at the end of the day, what i liked about this story the answer is consumers are the ones that are right. Whether he likes it or not, its all about the consumer. The consumers, for now, certainly loving these vegan burgers. Tryve to say, i have yet to one, but every time we talk about it, i am convinced i am missing out. Amanda they are pretty good, and you cannot deny the sustainability angle on it. Here to stay, i think. You better go and try one. Taylor coming up, is there life after ive . Alreadye analysts all mourning the loss of jonny iv e from cupertino, and what it means for the company. This is bloomberg. Taylor life after ive. A new age at apple. Shares are lower today after the announcement late yesterday that chief designer jony ive, the man behind iconic products like the imac and iphone, is leaving the company to form his own firm. But he will be counting apple as a client. Here with more is mark gurman from San Francisco. How big of a loss is this . The market cap of apple took a little bit of a hit, basically putting a price on him. Will he really be missed . This is the biggest lost since steve jobs, it cannot be understated that jony ive was the product visionary. He was the one that had the rubber stamp of approval to say we are launching this or not launching this, it should work this way or not, what it would look like, everything from the software to the hardware, to the new apple park campus. Nuance wants here is here is that he has basically been out of the door the past few years. This is kind of a big moment for apple because they are doing a bit of a pivot. They need their transition to services and content to work. Is this the right time for ive to move on or the worst possible time . Think there is any good time for the most key person at a company to depart. If he was going to leave come it would happen eventually, and this seemed like a carefully orchestrated land, by plan by spreading this across four years. I have seen a lot of the discussion about this, that they dont need jony ive anymore because they are a services company. Services and software run primarily on apple devices. If they dont have any devices but they have all of this content and services, you cannot really use it unless you have the hardware to go along with it. Apple hardware is just as important as ever. I dont think its importance has ever produced, i dont think it will increase. Perspective, 90 of the companys revenues. I dont think that is everchanging. Taylor talk to me about apple moving their mac pro production from the u. S. To a plant in china. Mark this is apples lowest volume product. They previously produced the mac pro in austin, texas. People were quitting the production lines, not working out well. They say they cannot produce well in the u. S. , so they are moving to china. Amanda mark gurman, thank you so much for that. From toronto and new york, this is bloomberg. Mark im Mark Crumpton with bloombergs first word news. At the g20 summit in osaka, President Trump told Vladimir Putin not to interfere with u. S. Elections. This is the first meeting between the leaders since special Counsel Robert Mueller concluded his pressure investigation. The tone of the president s comments did little to silence questions about his relationship with russia. Assess a lotng to of different things. Weve had a very, very Good Relationship and forward to spending some very good time together. Mark bloomberg also learned mr. Trump had been invited to moscow next year to celebrate the anniversary of the end of world war ii. At a United Nations human rights council, former president jimmy carter spoke about his views on the 20 election, suggesting donald trump lost the election and was put into office because the russians interfered on his behalf. This comes weeks after special counsel mueller concluded his investigation. The Supreme Court has refused to consider alabama
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