Swing of 70. 5 points, the lowest in at least three months. Caroline down 12 on the dow. Romaine lets dive into the action with our markets reporters. Abigail, get us started. Abigail i am on amazon watch because it is the first day of the annual prime day sale event for amazon. Im watching the 1 trillion mark with amazon almost there, similar to earlier last week when it be fluent above 1 trillion. Same thing last september. This year, a huge run up. Now about 7 billion away. It will be interesting to see as reports come in whether it will be enough to push the shares above 1 trillion. Emma i was watching oil tumbling below 60 a barrel and suffering the worst loss in about two weeks. A couple of reasons for this, hurricane barry moving inland allowing drillers to restart production in the gulf of mexico but also the longterm outlook for prices was brought into focus with data from china. Economic growth slowing to a threedecade low. The trade dispute continuing to weigh on sentiment. It could be sometime before we see new highs for the oil market. The 60 level is a key psychological level. Fallen below it will be a blow to bowls. The last 12month hiking back in october high came back in october. im taking a look at steel stocks which got an interesting bump during the session today after President Trump said he would increase u. S. Steel usage. As a result, we saw the steel index rise a little bit during that session. Stocks,know particular the steel index rose during the session. We saw the holding up to its highest since july 8 to we saw you still up the most since june 25 during the session which looks like it ended. Throughout the entire year, u. S. Steel is down because president steels tariffs on foreign have cost you a steel more than 5 billion. That was u. S. Steel more than 5 billion. That was a significant portion of its market cap. Is ede still with us campbell and sarah ponczek. A little bit of steeping last week. It looks like the rally could resume. Do you think as we get further toward the rate cut, we will see heavy buying in treasuries or will we see a selloff . Rewardriskoint, ratio for treasuries has deteriorated. We have seen a big move so far this year. The fact that the fed is dovish will keep a lid on yields. Most of the downside is in play so i do not see tremendous opportunity in government bonds at this point. Scarlet was interesting from the Earnings Report was they are not fully positioned for a rate cut which i thought was interesting because everyone is expecting rate cuts. How do you make sense of that . I think it is sort of a bimodal thing. The key judgment is, are we going into recession . If we are going into recession, if this is too little, too late, the fed will wind up going to zero and restart quantitative easing. This is a midcycle slowdown, which is our judgment, it is more likely to be one and two and done. I think that is reflected in market pricing. Caroline even if michael does not think the market is fully positioned for a fed cut, we are still seeing money moving into stocks, particularly etfs. If you look at the largest etfs that track the s p 500, we saw combined more than 6 billion enter those funds last week. Caroline that is a lot. It is a lot. It is one of the best weeks this year and the thirdbest combined week this year. That says a lot considering we have seen a 20 rally your to date. This goes back to the idea that many investors believe we will get a rate cut. These are insurance cuts. Most not believe we are entering a recession. We would not be seeing massive inflows into stop etfs. You have to ask yourself if we are seeing optimism, whether they are traders or more institutional or retail investors. We are seeing more interest from hedge funds and in the Options Market more bullish positioning as well. Romaine where does the dollar come into play with a lot of people saying the u. S. Appears bone theying to joaw dollar lower. What is your take . I think the dollar is a key barometer to watch. One of two things would cause us to go overweight risky assets more broadly. One is if we got a pullback in the other is if we got improvement in nonu. S. Growth. In that environment, you would see the dollar decline. That would be the catalyst you need for things like emerging markets which are very attractively valued. That would be the catalyst you need to spark outperformance. Earlier aboutlked how the russell 2000 has been lagging behind midcaps. What does that say . That signals to me u. S. Growth expectations are still being downgraded. There is not that Inflection Point just yet. Given the fact that nonu. S. Economies are so far ahead of the u. S. In terms of the cycle, i would expect growth conditions to turn around there before you see anything in the u. S. Economy. I do not expect small cap outperforms to be imminent. Caroline in many ways related to oil oil moves. Oil has been a drive on the market drive on the market drag on the market. Taylor last week, we did see it up more than 4. 5 . We saw a reversal today largely due to supply concerns. You are dealing with Tropical Storm barry and gold. At the same time, when you think about the longterm implications, many have continued to point to the fact it is not demand trumping supply. If you have concern about china, Global Demand and the global economy, and at the same time we have heard the government not the government for agencies say they are worried as it relates to supply. Not from opec from nonopec entities like the United States pumping more oil. You have to take all of this into account. Scarlet taking into account the small points when we have seen in the dow. The longest since december of 2017. This is the dow at record highs. Some people are still on holiday apparently. Ed campbell and sarah ponczek, we appreciate you joining us. That does it for us. Taylor riggs is stepping in the. We will have more on chinas Economic Data and crypto concerns. This is bloomberg. Caroline live from bloomberg World Headquarters in new york, im caroline hyde. Taylor i am taylor riggs. Romaine and i am romaine bostick. Caroline u. S. Stocks closed at another record high but lacking in volume. Romaine whatd you miss . Caroline chinas data showing weak growth but some signs of stabilization. The earnings bonanza is off to an upbeat start. Warnings ring out. J. P. Morgan and wells fargo report tomorrow. Steven mnuchin joins the growing chorus of concerns about Facebooks Libra. But first, to china. It hit the weakest pace since data began in 1992. To rose just 6. 2 april june, underscore and how much pressure underscoring how much pressure chinese lawmakers are under. 6. 2 . Do you believe it . We do not believe this. I think the key is chinas gdp data is never accurate. There are a lot of reasons. It is not always political manipulation. A lot of it is lag. Sometimes it takes a long time to collect the data. When the chinese see a problem in the economy, they do not want to show the growth indicators have fallen off a cliff so they spread the weakness until later. A lot being reported his weakness we saw a earlier in the year. We are seeing much better metrics in our own data. Taylor how much better do things appear . What gauges do you look at . Signs ofing, positive retail sales and factory output. What other indicators can you look to to give you a better indicator of what is going on . It collects from over 3300 firms. Within that, we track manufacturing, services, and retail. Manufacturing and retail are outperforming. Property is fine. Major sectors are doing better than reported. The new reports are reflecting what is happening better than the ones a few weeks ago. Look at credit. When you look at official credit indicators, it takes a long time for certain elements to filter into government data. We show an extremely active credit environment for all of 2019. Theres a lot more credit going out. It should not surprise people there is more growth that will come from it because the chinese are more aggressive than people think. Romaine what do you make of the retail sales data . Some people are discounting it because it was all car sales. When we look at retail for the Second Quarter, it was a lot better than we thought. Manufacturing was better than we thought it would be. Services again down. Retail sales in june, the lowest growth in multiple decades gets the headline. The june numbers even through inicial data saw a bump industrial output, retail sales, fixed asset investment. Things are looking better. That does not mean is our great. That does not mean there is not pressure on the trade side. It means the headlines are overly confusing. Caroline that is why we saw a raise in asian stock market trading. Getting better . Can we thank the central bank or the Chinese Government for that . Part of it is the trade war is in a stalemate right now. The chinese prepare their economy in the Fourth Quarter to deal with the nightmare scenario. If president went 25 on all 500 billion, they wanted to cushion the blow. It does not look like it will happen soon. The credit support they put in the economy is more than they need. As a result, it will continue to cushion and push up what they should be doing in a neutral economy. Taylor is the worst behind us . Does that mean the u. S. Has more to lose in a trade fight been china does if they have already bottomed out . Thinkn we look at 2019, i people have been too much into the fallen off a cliff narrative. Every time the chinese do what they are doing now, they are kicking the can down the road. It means they are putting a lot of their credit into riskier borrowers. They are getting a worse return on investment. That means growth will slow in the future. We have a long sloan trajectory going forward. Shortterm, you should not believe this beautiful line that dips every quarter in gdp. Romaine you talk about the credit they are pumping to boost the economy. Ubs and j. P. Morgan talked about how that is going toward land projects rather than infrastructure which would have more of a Multiplier Effect on the economy. Do you think the money they are pumping into the economy is being utilized the right way to sustain growth . That is a tough question. Do not trackmorgan what corporates are doing. Even though the top line results looked better, unlike the first quarter, you did not see investment jump. Optimistics more coming from a bad Fourth Quarter. Second quarter, firms are still cautious. They see the trade war. This is a cautious time. That said, things are better than people think. Caroline taylor, earlier you were showing u. S. Companies we should be looking out for in earnings season that have been in the middle of the trade war. Visit seen some numbers might not be as bad as we expect . Taylor a lot of strategists said the resolution of the g20 did not come soon enough. A lot of the bad numbers will be baked into q2. There was not enough of a boost to recover from that. Chipmakers with the most exposure. And then you get the bellwether Companies Like boeing or caterpillar on the industrial side. The strategy note says outside of financials, it will be industrials. They are getting lower revisions but my continue to do well. Second half of the year might be shaky but it might be ok if we can get through it. It looks like the Second Quarter will be bad but there would be a pickup in the Third Quarter. And lookk off earnings at the effects of china on companies, is the second half want to be the bottom out as it relates to the trade affects on companies . I think unless you see a major step up in the trade war, president those harder at china, and that is not what anyone thinks will happen, i think there is a lot of credit provision in the economy people do not understand. We are not looking for the falloff in growth. Seeing a lotre more strength in our data than in official data. That is because it has not flown through. When the official data catches up with our data, i think you may see upside surprise later in the year. Romaine that is leland miller. Thank you. Why the bank is being forced to lean into cost cuts and what it could mean for the rest of earnings week. This is bloomberg. Taylor citigroup kicking off a busy week of earnings for major banks. They talked analysts topped analysts addictions despite the loss predictions despite a loss in revenue. For more, we are joined by allison williams. This morning when the earnings crossed, what struck my eye was the praise citigroup got for costcutting. We know you cannot cut wage growth. How is citigroups costcutting better from other banks we have seen . For one, there is costcutting to improve efficiency. And then there is the amount of money you have to invest. Citigroup is benefiting from the fact they are becoming more efficient in some areas allowing them to continue to invest. To some extent, the benefit this year is because Fourth Quarter was a difficult that they implemented a lot of measures. They ended up missing their cost target in the Fourth Quarter because the environment changed drastically. Now a lot of costcutting measures will come through in the second half. Costs will is their be coming down in the second half. That gives them some protection against revenue risk. Investors were worried about they were factoring in one rate cut later in the year and that is not what the market is expecting. Romaine did you think to yourself, this is more of a permanent change or shift in the trading environment or their ability to make money off trading or something temporary . The fixed trading environment does continue to struggle. A lot of that is macro. We keep waiting for that to get better and that is not happening. The positive thing from a structural standpoint is the fact we are seeing benefit on the corporate side of things. The negative that has not come through the past several years is the Asset Management clients have remained under pressure. That is going to mean less trading. Citigroup talked about strength on their derivatives business and equities as a pocket of strength. Pocket of strength was equity derivatives with corporate. That should be positive for j. P. Morgan. We will see how much. That is more a negative for Goldman Sachs. Equity trading missing is one of the reasons why you saw Goldman Sachs trading down today. Those companies are much bigger in the business. I think those results are more meaningful tomorrow. Caroline the cfo was talking about the uncertainty in Challenging Market environments. Should we be nervous ahead of tomorrow . I think it is more about the future outlook. Numbers, thes equity bar is lower. Their business is small compared to j. P. Morgan and Goldman Sachs. There could be other factors at play. The other difference with citigroup is they are mostly in currency trading. To your point, it is about the outlook. One of the positives, equity fees betterthanexpected. They said dialogues are positive, this should be a good thing. But with all the risk, we cannot count on that to continue into the future. It is about the Third Quarter and beyond. Caroline busy woman. We are pleased you are able to spare time for us. Time to look at what is trending across the bloomberg universe. They will pay about 25 nine dollars to settle allegations 25 million to settle allegations. Bloomberg. Com has a story on tankan cancun. Thousands of pounds have been piling up on beaches turning them into snowy eyesores smelly eyesores. The mexican economy is already teetering on recession. A report from the moral from the World Health Organization says sugar is not correctly advertised in baby products. Products do not reported correctly which could raise the risk of diabetes and obesity. Story on myher radar is the blackout in new york city over the weekend that crippled much of manhattan, including me stuck in the subway for 90 minutes. I could make it about me all day long. But the investor reaction has been muted and i would argue this is normal. Investors can you usually can usually shrug it off like they did with con ed. Romaine stuck for 90 minutes . Did you make any new friends . Taylor no. There was airconditioning and lights, but otherwise pretty bad. Romaine this is bloomberg. We will be back shortly. Mark i am Mark Crumpton with bloombergs first word news. 62 Border Patrol employees are under internal investigation following revelations of the secret Facebook Group that mocked lawmakers and migrants. The offices eight former members are also under investigation. Posts being looked at questioned the authenticity of images of the dead migrant father and child. It also had crude doctored images of alexandria across your chance of alexandria ocasiocortez. President trump said there were raids against undocumented immigrants printer nationwide crackdown was due to begin this past weekend targeting migrant families in cities across the country. President trump came into our country illegally. Many were convicted of crimes. Many were taken out on sunday. You just did not know about it. In fact, i spoke to the head of ice. I spoke to a couple people. We had many people. It was a very successful day. Added thatresident the truth was it started a number of days before yesterday. The World Health Organization is meeting in geneva to decide whether the continuing Ebola Outbreak in congo warrants be declared a global emergency. The agency confirmed the spread of the disease into the city. The identification of the case could potentially be a game changer in this epidemic. It is a city of 2 Million People near the border with rwanda and is a gateway to the region and the world. Measuresnfident in the we have put in place and hope we will see no further transmission of ebola. Mark the latest Ebola Outbreak has killed nearly 1700 people, mostly in congo. In louisiana, more than a foot of rain has fallen prompting new flash flood warnings in that state in mississippi. Todays rainfall was among