Well see whether or not we keep our meeting in september. If we do that, fine. If we dont, thats fine. Time that somebody does what were doing. This comes after the said new tariffs on chinese imports will take effect september 1. Shattering a truce reached with the chinese president weeks earlier. Senate Majority Leader Mitch Mcconnell says Gun Legislation will be at the top of the agenda from theirers return august recess. In the wake of several mass shootings, mcconnell says the look at expanded background checks. Also on the table, socalled red to keep guns away from dangerous people. Mcconnell has opposed most gun laws in the past. A Political Drama is playing out in italy. The Prime Minister is signaling he Wont Leave Office without a fight. His deputy is trying to bring down the countrys populous a snapon and force election. They want lawmakers to vote out to government as soon as next week. He and his league party are tired of infighting with coalition allies. Global news, 24 hours a day, on air, at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. [music] from bloomberg World Headquarters in new york, this is Bloomberg Markets the close. We have 30 minutes till the trading day. Probably going to be a week that many are quite pleased to be behind us. Seen, andence weve once again, it felt like a risky move today, but were managing claw back our losses. The dow jones industrial, were actually back in the green as we speak. Seems as though perhaps the new trade of fronts coming from President Trump saying that maybe they wont have a deal or a meeting with china come talks,er and indeed the the administration delaying licensing decisions, to restart with huawei, now we seem to be trying to shirk it off before the weekend, although were not searching for a haven in the same way that we were, in italy,appened political instability worldwide. Instability worldwide, whether its italy, the u. K. , the pound hitting a low, 12048. At whats happening in the different sectors. Half ofaq is still down one percent, even as the dow has turned to the green. The s p is little changed. Onwe had, of course, plunged monday. Then we erased our losses by thursday. Today really determines where we the week. Lots of demand for tlt. Up for an 11th straight day, longest winning streak in three years. But a little bit of a pullback demand for tlt. Not for the yen, though. Thats been a consistent all day today. Lets get you now our top calls. A look at some of the movers. Downgraded to sell, after reporting disappointing results for the first half of the year. Analysts sees more potential for bad news. The shares down by more than 5. 5 . 33 to 16 fetch from dollars, after mixed second results. Earnings reflect promotional margins reflect industrywide discounts. The shares down more than 45 . Finally, momentum lifted to 70 with a strong buy rating. The huawei band had a smaller initially estimated. The shares currently down by almost 1 . Your top are some of calls. We look at g. E. Shares. Those remain lower, even as the has made its way back into the green. The off by about 10 over past month, a steady decline over the past month, especially in august, as investors continue to digest g. E. s Second Quarter results. Results of course, onetime titan to health looks to be a difficult task. Brook sutherland joins us now. Results,Second Quarter they happened a while ago, but everyone is still shifting through them. Looked ok, with g. E. Now seeing a potential to billion dollars of industrial cash flow for the full year. Despondent . Eople so weve seen this pattern with g. E. , so the headline looks great and people initially get excited, and the shares actually pop on the day of earnings. But then as people parse the numbers and with g. E. In particular, there is a lot to parse. Its a complicated company. So manye always different things. People start to get a little bit more pessimistic. Think that pattern is repeating itself. You talked about the Free Cash Flow. A lot of really make sense to some people. When you talk about whats well,g that, they said, theres slightly better performance in power. Theyre lowering their estimate for restructuring for the year, which is confusing, and then sure where ally the rest of the optimism comes from. On the flip side, you have g. E. Saying the boeing grounded 1. 4issue could shave billion off of their cash flow for the year. It just doesnt all quite add up. Thats why youre getting a number of questions about it. Larrysis hitting reputation at the moment . Because thats quite damning that people are feeling that guidance that it has been putting out is falsely based in some way. But in many ways, hes making real strides, turned this business around. Sure. If i would go so far as to say its falsely based, but there are so many questions. This has been a perpetual issue with g. E. , where its just not exactly whats happening. The fact that were sitting here weekng about this over a later should tell g. E. Thing. This is a problem the company had withnually credibility, with people being able to read the earnings for the first time and understand properly. The first goround. Transparency remains a big issue. Big wakeupbe a call for the company that they need to be clear as to what is actually happening. Ivef the things that wondered is whether theyre back to the old ways of g. E. , playing expectations, managing earnings. When larry colt first came out and said, Free Cash Flow could be negative 2 billion, that really surprised people. Modelingle had been positive Free Cash Flow for the year. To walk that back just a couple ofths later, it raises a lot questions for me, if theyre trying to overly micromanage the views their streak profits. Its all about managing expectations. Talk a little bit about how connected the stock is to Interest Rates, because they have quite a lot of pension obligations. Argue thatstually maybe one of the bigger impacts for the stock slide this week. Pension,only their which is significant. I think the last time i checked, it was the largest unfunded balance on the s p 500. They have a huge obligation there. Its also their longterm care business, the business where they took the 15 billion writedown. Interest rates effect that reserve balance. If you start to see Interest Rates come down and obviously expectations have grown for further cuts by the federal could increase the amount that germen ultimately needs to put that g. E. Ultimately needs to put into that business. Not just the banks that you on. To keep an eye brook, thank you so much. Its bloombergs opinions. Up, mattel, falling in almost six months. Whats behind the toy makers slump . This is bloomberg. Is bloomberg. [music] lets get your check on the latest business headlines. In china, the historic slump in yet. Sales, not over the market resumed its downward trend last month after a brief uptick in june. Months. 13th drop in 14 u. P. S. Is considering a Major Overhaul at its investment bank. Hundreds ofld mean job cuts. Ubs wants to boost collaboration and itsdeal makers Wealth Management unit. The return on equity was roughly of other divisions. And mattel falling the most in almost six months. Maker said it would pull intod sail while it looks aan anonymous whistleblower letter. The claims in the letter, they say, are likely material. And that is your business flash update. , now for more on this story the bond sale has been pulled and everyone is left wondering, how dire this particular letter this whistleblower the content must be, to have to pull it. Exactly. Its really unusual to see a pulled like this. I can think of one other that happened maybe that happee threeish years ago. The Company Called gogo. They lost a contract, had to pull a bond sale. Certainly investors right now are treatin treating this mater. Down about 15 ck today. Bonds off. People are worried. Its surprising that the company did not disclose anything else. Thats a part of it that wondering. Me if theyre not going to say anything more than theres a whistleblower letter but its going to prompt them to take this drastic action, people are the worse. Sume obviously you dont want to lawsuit f up by a for a lawsuit by not disclosing. But at the same time, when you just say there is a letter out doesnt reallyet know how to treat it. Thats kind of what were seeing today, i think. Has to be meaningful enough, i suppose, to affect an ability to assess merit and risk. How much, therefore, is this an in terms of itl own covering its debt Going Forward . Market activity, the point was to be able to pay down in 2020. Yes. Mattel has had struggles over year, maybe barbies and hot wheels not being the hottest toys anymore. They were trying to reduce the debt. They say theyre going to come refinance this bond later this year. That being said, in cases like this, you normally end up having a little bit more. This is a 6 bond. Maybe if they come back, they pay 6. 5, 7,o Something Like that, a little bit extra for investors for their trouble. Mentioned analysts said that jeffreys, the analyst there, saying its possibly material. Anyone else speculating anything else or giving any kind of assessment on what this could impacts mattelis down the road . I think people are sort of cautious, certainly saying, look, this does appear to be a big deal, because they felt the to disclose this in the first place. That being said, when it comes to refinancing your debt, its not like you have a massive maturity wall coming. Toy maker has been doing very well this year. There are signs that their is really working. Maybe its just a blip. Claire, thank you for keeping this mattel story. Mattel shares plunging today as much as 27 . They have paired their losses to just a 15 drop. Amazing. Our attentionturn to perhaps something you caught across them or maybe social media networks. The new York Sports Club has to it. King the news broke that the finance chains majority owner is fundraiser for Donald TrumpsReelection Campaign weekend. It had a media backlash. Had celebrities quitting ek quitting soul cycle. I think this is so genius of the ableork competitor, to be to say some instagrams they say, commit to something better. Not doingsay, were anything in southampton this weekend. Come join us to work out there. Were not doing anything. Theyre being very opportunistic. Notre basically saying, only come join us, but come over for free. Theyve also said, if you want cancel your membership and sign up for one with us, it may deal. Etter to be fair to equinox and soul cycle, they continue to just an investment. This is bloomberg. Im all about my bed. This mattress is dangerously comfortable. When i get in, i literally say ah. Experience deeper rest with the awardwinning leesa mattress. This bed hugs my body. Im now a morning person. The leesa mattress is designed for every body. Providing strong support, pressure relief and optimized airflow to keep you cool. Hello bed of my dreams. Order online, well build it, box it and ship it to your door so you can try the leesa mattress at home. Love it, or get a full refund. And rest assured, returns are free and easy. I love my leesa. Today is gonna be great. Find out why so many people love the leesa mattress, then try it in your own home. Order now to get big savings but only for a limited time. Just go to leesa. Com [music] this is Bloomberg Markets the close. Joining us at this hour, on this momentous week s joe wise thal. A comeback. What a week obviously were down a little bit today. So ok, looks like were going to end down a little bit for the week. Week,ter the start of the this just feels like the bulls have to be huge, a sigh of relief, anyone owning stocks here. Were also well off the lows of off the little bit highs too, i think. Still, it just feels like a lot of people feel lucky to have made it out of this week alive. So many reasons to be negative today. Trump escalating the trade wars, trade walks scheduled. News, italyhuawei news, the u. K. , g. D. P. Figure. And yet we still managed to claw our way higher. Its really impressive. Theres not some obvious thing. Whenearlier in the week, we started bouncing back, there was not some clear thing. Youalked about, like, sure, can imagine a positive catalyst saying thingset are back on. But we never got Something Like that. Optimism,d get was oh, the fix, slightly stronger than we expected. Expect. Youd but then again, markets have a tendency to do that. Also, it now feels like a friday. Yes. Lets remember, were in whats comeback pretty thin trading. Its quiet overall. When i look at the sector still thisre is defensive tilt, at least when you look at the best performers. Are up, health care as well, up by half of 1 . Banks catch up a bit. Just barely. Bonds are selling off, ever so slightly today. The downside, youve got chip makers. That speaks to the whole idea know whethernt they can sell to huawei or not, because the Trump Administration that slition. And energy still in the eye of the storm as well. Of grim inoked kind the morning. Off by 1. 3 at one point. All back in the red for the moment, at least on a basis, in fact on a oneday basis as well. Over the week, its been kind of days. Y couple of this is over three days. Lets pull it back to five days and that just shows the big gap lower at the open on anded and how on monday how we kind of made our way back on thursday. Exactly where we started. Endes, and really how we the week is based on how we end today. Quite amazing. Were Just Moments Away from the close. Seven minutes to go. Lets dive deeper into the market action. Started. Us well, amazon. Com is down about 1 today. Company,s such a huge that means its actually the biggest drag on the s p 500 today. Now backeans amazon is down 10 from its last high in the middle of july, even after of rebounds this week. And theres always a lot of news but one storyazon really stands out today as potentially alarming. Over a a lot of scrutiny foxconn plant in china that otherles echoes and Electronic Devices for amazon, a group called china labor watch is scrutinizing the pay that they pay workers, especially after the tariffs really compressed margins there. The group had criticized this low wagesr the already. Now saying theyve been cut the tariffs. Fter theyre saying foxconn had hired of school kids to work in these factories, kids as young and they quote, one student who was forced to at the hours a week factory, on top of going to school. So abigail, its a pretty wrinkle in the fallout from the trade war with amazon and foxconn today. Lower on the day but ridiculously lower, nektar plunging, down 29 , down 40 , lowest level since 2017, this after they reported their earnings. They alsogger issue, reported issues with a clinical study. Thoseterestingly, all of price targets that were slashed, still above and in some cases by wherehan double, above the stocks are trading today, suggesting theres optimism for the future. This chart suggests this stock may be going back to single digits. Physics, it cant hold. Take a look at the uptrend that we saw back in 2000, when the stock went from 10 to 77, all the way down to four. Cant hold. 2017, a 10 stock, it was 111 at one point last year. Now its back down to 20. This chart, scarlet, probably that we could see Nektar Therapeutics go back down toward the single digits. Pretty bearish look here, suggesting that the fundamentals could just deteriorate even more. Abigail and mike, thank you so much for those stories. Analysis, its all about trade. Like every trade headline that comes out sends markets frenzy. Whats the latest that youre hearing on the trade front . I think actually what trump in the day with huawei is really interesting, because what i was hearing from sources is that china is very much taking a hard stance with this. Will not really negotiate properly with the United States if the huawei suspension is not lifted. Thats a red line . Thats a red line. All a red line is lifting tariffs. So trumps first Statement Today that were not there with huawei sent the markets tanking. Well,en later on, saying, thats just for government purchases. It seemed like a little bit of a theyssion to china that may be willing to meet a little bit of the way to allow huawei deal with American Companies but not necessarily the government. That might be enough to get to move a little bit closer. Thewhat im hearing from meeting from last saturday a conclave of all the players in china. Guys. Big and theres never or barely an announcement that follows. The sources are telling me from meeting, that they china does not want to make any concessions to trump. They give an inch, he takes a mile. They just dont feel comfortable more concessions to get somewhere where hes gonna blow things up on them. Beenactually said its trump, since february of 2018, thats moved the goal post four where trump says china is moving it. Definitely a difference of opinion. All right. Into the market close, i want to bring in our equity strategist in massachusetts. Matt, thank you very much for joining us. Obviously ending a little bit still wayhe day, but off the lows of the week. What happened . Because i think, you know, wasably tuesday everybody like, were in for some selling for a while. Was it just that people got so extremely offsides real quickly that allowed for this surprising back of the second half of the week . Exactly, joe. You mentioned, there really catalyst, real news that changed what has been the last couple of weeks on the trade front. The thing we have to look at, market getse stock overbought, kind of drifts lower over a period of time, but when get a new development, when President Trump talked about initiating new tariffs, the stock market dropped 6 . And what usually happens is the gets very oversold on a very shortterm basis. Then people look around and say, wait a minute, this new development hasnt ch