1 despite a couple of earnings reports that were really disappointing, including the kraft heinz report. Management they are saying that kraft needs a plan in place. A new ceo, of course. For now, definitely a lot of selling. Symantec is up about 10 on reports that broadcom may be very close to some and a two symantec. Ith in germany, a pop on 10 year yield. Germany may be thinking about the possibility of maybe breaking the black budget, the budget. Z european bids are higher. Eurodollar leading the story. 1. 5 . Crude also up vonnie we are joined by bostick. s romaine we had these rumblings out of germany, and in the u. S. We are looking at china still. Romaine this would be a huge deal in germany, but this is something that was talked , whichall week long would be a complete game changer when we talk about the direction of rates and where they were. Obviously that is really what fed into the market selloff earlier this week. Chinaou also had providing a little bit more comfort, at least in the interim, that they are going to support that level a little more than what people were speculating back on monday. That gave a little bit of underpinning in the market. Not to throw water on it, when you look under the surface, some of the buying isnt all that optimistic. Guy decent claims number today. It supports the idea that the u. S. Consumer is still on track. The big question is can the u. S. Consumer hold up the World Economy . Romaine the World Economy, i dont know. There are some crocs in the consumer foundation, and this is what folks are looking at. Do you really want to see the business side of the equation come back into this . Right now, whether you are looking at ceo sentiment, manufacturing indicators, services indicators, you are not seeing the business side of the equation, at least in the u. S. , hold up. The u. S. Consumer is going to have to it is going to be hard for the u. S. Consumer to prop up what is going on in the rest of the world. You look at some of the sectors that got us to this point of the last couple of days, that rebound we had on tuesday and the reversal wednesday, which was impressive, but we are talking about consumer staples, defensive. Vistas, thesed arent going to lead us to the promised land. You need participation from the big players, and right now you arent seeing the big players in there. It just isnt all there. You are seeing people willing to come in and buy this dip, but they are not buying the Growth Stocks we saw in previous bounces. We are seeing the move back into defensive positions. You are still seeing a lot of volatility in the treasury market, the highest level since summer 2016. Yields still seeing bouncing off that 1. 6 level. Still seeing a lot of buying coming into u. S. Treasury. Guy what are people telling you . Are they giving you any sense that we can find a flaw in that 10 year yield . What is going to stop it from falling . Romaine whats going to stop it from fallings fiscal policy. Thats what weve heard time and time again, that this isnt any more about the Economic Conditions in and of themselves. This is about whether Central Banks are going to get support from the fiscal side, and that could reverse or put a little bit of a buffer underneath that. We see a little bit more pressure not only in the u. S. , but obviously in europe and asia as well come on rates. Romaine, thank you. That is romaine bostick. Lets check in on the first word news with kailey leinz. Kailey the National Rifle association has warned President Trump against expanding background checks for gun purchasers. Ceo Wayne Lapierre called the president after Mass Shootings in texas and ohio. The nra represents an important part of President Trumps base. Saudi arabia looking for a way to stop the sevenmonth slide in oil prices, speaking to other producers to discuss their options. The saudis have already cut production more than required on the deal between opec and its allies. In italy, deputy Prime MinisterMatteo Salvini is ratcheting up pressure on the coalition government, wanting his fivestar partners to yield to his policy demands. If not, he could dissolve the party sharing agreement. Wexner saysleslie he was deceived by former money manager jeffrey epstein. The founder of the victorias secret parent company. Epstein has been jailed on sex trafficking charges. Wexner says he was in the dark about the alleged wrongdoing. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im kailey leinz. This is bloomberg. Misse coming up, dont our exclusive interview with henry mcvey, kkr head of global macro and Asset Allocation. That is this hour. This is bloomberg. Guy from london, im guy johnson. Vonnie from new york, im vonnie quinn. This is bloomberg markets. Lets check those markets now with emma chandra in london. Emma the s p 500 up 8 10. The dow jones joining the s p 500 in positive territory this afterg, up 5 10 of 1 that big reversal for the s p 500 from negative to positive territory yesterday. Europe also looking good, the stoxx 600 heading for its best day in some four weeks. China fixing the yuan at a strongerthanexpected level. Theite the evidence of reemergence of risk appetite, traders remain a little jumpy. Other asset also getting a bit of help today. Take a look at the bond market. This came from the German Government, reports from reuters they are considering issuing new debt to finance green bonds. We are also hearing that they dont plan to abandon their plans for a balanced budget. Nevertheless, look at the german tenyear, reversing and snapping a nineday losing streak. For oil markets, the knight in shining armor was the saudis saying they are not going to countenance any further declines and are looking at ways to stem that rout. Theres a long way to go, despite todays gains for brent. Back to equities, take a look at what is happening in the u. S. Earnings still playing a big part in this story. Loss comen expected up with a lot of analysts saying this might help convert some of the skeptics. You can see a pathway to profitability. Kraft heinz down 13 , opening at a record low because of some steep sales declines in the first half, and saying they are looking for a longterm plan. Thats got to find that pronto. Guy thank you very much indeed. I want to go back to the german story and where we are with that. Over the last hour, we seen a rotors report suggesting the German Government is looking to break the black budget and spend money on green projects. Everybody is waiting for germany to deliver some sort of fiscal policy, some sort of change. Theres been no evidence thus far. Weve had a report suggesting that germany says theres no decision to give up the balanced budget. Doesnt mean they are not going to do it. There is just no decision at this point, that happen. Tina fordham, city global Citigroup Global political analyst, joining us now. The German Economy is in real trouble at the moment. Green bonds are interesting because it also satisfies a number of political objectives. Tina i think it is a very shrewd move on a number of levels. You are right, germany is constantly criticized for not spending enough. Some fiscal stimulus coming out of germany would be very welcome. , asthe politics of the move i say, are very shrewd. The green party the best in germany, and green parties across europe. It was really the untold story of the european parliamentary election. It is not the first time that the cfu would have that the cdu would have eaten the lunch, so to speak, of the green party. If you look at voters, particularly in germany, addressing Climate Change is the top concern, more than the economy or other factors. So that could be very smart politically and economically. Guy the french are certainly paying attention to it as well. Lets ask a broader question. Global bond market has been in freefall of late. Theres fear about what is happening on the trade front. Theres fear about what is happening to the global economy. When you look at what is happening politically, do you see anything that could halt the freefall that we are seeing at the moment . Yields are collapsing. Germany is negative from the front to the back of the curve. Theres negativity all over the place. What is going to change it from your perch politically . Tina hope always springs internal with traders that you will get another positive sounding tweet from President Trump about his friend chinese president xi or Something Like this. Weve looked at the impact of president ial tweets on markets. It is something that is quite new. However, i dont think i have a lot of optimism. In fact, ive been bearish on prospects for u. S. china trade deal all year, and i thing now we are not likely to see a breakthrough this year. It may not come until quite close to the u. S. Elections in november 2020. I think markets got way out ahead of the politics on china trade, and havent appreciated that theres a lot more at stake here than buying soybeans from American Farmers in the midwest or a handshake and a photo op. Vonnie just another question on germany, it is interesting timing because the ft has an editorial today pressuring germany to come up with some fiscal stimulus, saying now is the time. Then we have this reuters report that the official german spokesperson rejects. Not exactly the report, but rejects that there might have been a decision made. Where is this emanating from, and what is the reluctance from germany do not have a balanced budget . If public spending is relatively low compared to other European Countries . Tina this is the political culture of germany. You look at the way that the german press portrays language about centralbank action, etc. , penalty for savers and things like this. This runs very deep indeed. Think this is as much a religion of the changing politics in germany as anything else a reflection of the changing politics in germany as anything else. Vonnie then what they allow germany to go into recession . If that is the end game, would anything be done to avoid that, or would german politicians as a whole decide it was ok for that to happen . Certainly in the u. S. , there is a big effort to not have the u. S. Go into a recession. The dynamics are quite different between the two countries on that front. I think you would be hardpressed to find any politician who would say they are willing to let the country slide into recession. It is a question of the tools they are willing to deploy. But i think one lesson we can go back to from the Global Financial crisis is that things actually have to be quite bad. Politicians tend to have to be looking into the best before they are willing to take bold, preemptive action. Thats why i think the pressure is going to come from the need deal with the political. For example, increasing military spending, which is even more controversial in germany. Guy it is also one in the eye for the president of the united states. He has pushed back on Climate Change. Tina he doesnt believe in it. [laughter] guy to that point, in the past orn we had Economic Crises things have gotten difficult, weve had cooperation between various countries. The Climate Crisis is an obvious one. There is a g20 convened here in london. Would such a meeting be possible with President Trump in the white house . Tina i would put it slightly differently and Say International cooperation to tackle global crises isnt something that can be revived in the current environment of political fragmentation, of strained relations between the u. S. And europe and other partners. I think the answer is we would have to get to a pretty dire situation, and remember that the last couple of g20 summits, President Trump has refused to sign the communiques. Then again, he hasnt governed through an economic crisis. Guy is europe on the same page when it comes to the same thing . If the germans are going to spend money, would the italians be able to spend money . I wonder whether europe is together enough at the moment to find its way out of this crisis. The Italian Government is hanging by a thread at the moment, it seems. Tina well, the Italian Government is going to be headed for new elections, whether this autumn or the first half of next year. That seems quite likely. Italy is in such a different state politically then other countries in europe, whereby both of the mainstream parties had their worst result in 30 years in the last italian elections, and the fringe parties ended up together with a majority. That hasnt happened anywhere else in europe yet. It might happen here in the u. K. , as we now have four, in they five parties first past the post system. So the ability to reform or pass important measures like you are talking about requires a degree of political consensus. That isnt present in very many places, and also doesnt tend to emerge until things get pretty bad. Butets may be in freefall, to the man on the street and the state of the economy, that hasnt passed through yet. Guy thank you indeed for stopping by here to see us. Tina fordham, citis chief Global Political analyst. Vonnie still ahead, factor funds are popular. Our weekly factor funds discussion is next. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy in london, im guy johnson. This is bloomberg markets. Our weekly factor funds segment. Low vol factor funds are proving once again to be popular during the recent market drop. Here to talk us through it, tom psarofagis. Up. Ds go down, prices go i am in no way shocked that some of these low vol companies are doing really well right now. Thanasios ous a whats been happening, especially this year, is because all of those bond proxy sectors have been doing well, there was buying of low vol even before this drop. Even as the market was making new highs, usually you would see money come out of low vol. But money has actually been piling at ahead of this market drop. Hindsight is easy to pick this out, but it was almost a precursor of what was to come in the market. Vonnie why these instead of something alternative, tom . Athanasios to give you some context, there is one of these low vol that has 30 billion in assets. That is massive. We think these funds have taken the place of a lot of money that would have otherwise gone to alternatives. I think people have given up on alternatives, and they still want to maintain that market exposure, and low vol lets you do that. You can still play in the market a bit, but you have a cushion. When advisors or wholesalers are going out to talk to clients, it is a much easier sell and may a complex alternative fund. You see a lot of the flows that have maybe gone to low vol that would have been going to alternatives. Guy what else is the factor story producing at a moment . The market is clearly gyrating. Weve already discussed what is happening in the bond market. Weve just come through earnings season. Athanasios i think the main takeaway is defensive. Low volput quality and as the main factors. Guy what does momentum look like right now . Athanasios the issue with momentum is theres always a lag. A month from now it will go into the stuff that low vol is hoarding now. Momentum is still very heavy tech, so things that got hit during the selloff, just because it always has a lag. Vonnie tom psarofagis, thank you for joining. Tom is with bloomberg intelligence. Dont forget, you can check out factors to watch on your by. The function ftw bloomberg has learned two hedge funds want to raise 15 billion to help pg e out of bankruptcy. The california utility filed for bankruptcy back in january after damages from wildfires were blamed on its women to. Bloomberg has were blamed on its equipment. Bloomberg has learned that broadcom is set to buy a portion of symantec. Squeezed by aere supply gap. That is your latest Bloomberg Business flash. Still ahead, lift bancshares driving higher after a Second Quarter lyft shares driving higher after a Second Quarter that beat expectations. This is bloomberg. When you rest on a leesa hybrid mattress, bedtime is no longer simply the time you go to sleep. Its time to switch off and catch up. Enjoy me time, and we time. 40 winks or 8 hours solid. The leesa hybrid mattress combines two technologies to give you deeper rest and rejuvenation. 1,000 pocket springs provide edge to edge support, responsiveness and comfort, while premium foams relieve pressure. Keep you comfortably cool and limit motion transfer. Leesas hybrid mattress is not only recommended by experts, experts choose to sleep on it too. Try it yourself in any west elm store. Or order online and well ship it to your door so you can try it risk free. The leesa hybrid is american made. Built to last. And, because Everyone Needs a place to rest, we donate tens of thousands of mattresses to those in need. Experience the leesa hybrid mattress. Right now, its on sale. Order today. Go to leesa. Com. Guy some breaking news over the last couple of minutes. Unicredits chairman has died. Chairman, former the finance minister formerly the finance minister in italy. That is what has been reported by an italian newspaper. As more details emerge, we will bring them to you. The unicredit chairman has died, longterm servant of the Italian Government as well. Lets get first word news with kailey leinz. Kailey the Trump Administration a list of to finalize chinese goods for additional tariffs. Reportest jobless claims indicates the u. S. Jobs market is holding steadfast. Firsttime applications for Unemployment Benefits fell to 9000, the second drop in three weeks. Cl