China has started to back off from holding u. S. Treasuries. Lets dive into the action. Lets look at the dow. It breached the 200day moving average. Will p 500 suggesting it go to the 200moving day average. A lot of People Discount the dow. This is a oneyear year chart ahead of the volatility. Thedow has been above 200day moving average, slicing through in december, climbing above it in february. Late may and june the brief exception. Today slightly below. Today, the dow put in a lower a dropich confirms towards last decembers lows. Whether that happens, who knows . If this is a bearish chart the volatility we have seen continues. Thanks. Im watching crude oil come down for a second straight session. The u. S. China trade were threatening demand. Stockpileswing u. S. At a time when we should be seeing stronger demand at the end of the summer driving season. Around 55 a barrel. It is flirting with that average , and sentiment in the market is bearish. Caroline we thank you. More breaking news. Perspective,e into falling 11 for the worst oneday lost in 11 years. Whistleblower crisis file play on accounting. News out of Applied Materials, coming out with . 74, net sales it isbillion, but for now that eps number that beats estimates, the highest testaments, lifting the stock by 3 in afterhours trade. Joe still with us is our guest, wells fargo asset management, and luke. Next week will be big, jackson hole, Jerome Powell will speak. Could this be a turnaround point for the markets, having the central bankers speak and layout their issues . Could this catalyze the move higher . August andin september is a dangerous thing to do. You want to look through all the volatility we are seeing. A lot of attention will be on any language or commentary, but there are so many factors, especially the trade uncertainty. We will have to see how that plays out. When you look at the Different Companies that have reported results, is there anything that has surprised you about how much they are willing to say or want say when it comes to the trade war are uncertainty related to policy . It is par for the course. It is interesting when you see the dollar trotted out, the old excuse. I think there was a tendency when markets were in freefall mode recently to say how bad the recent earnings season was. The earnings surprises were about the revenue surprises, assign that the margin compression is not as bad as feared, so the backdrop is not as dire as we might reason it to be. Caroline certainly not when youre looking at walmart. Still seems to be there. At what point would you worry . Consumers are 70 of the u. S. Economy. As long spending holds up, Interest Rates low will help consumers, especially in terms of carrying debt, so, so far, so good. The thing driving the volatility is uncertainty around Administration Policy and Central Banks actions. Will we see more qed . Those are the qe . Those of the questions in my mind. Caroline we did hear europe, comments being circulated by a key ecb member saying a lot of stimulus will shock people when it comes to ecb. How important is what is happening around the world with Central Bank Policy and are you looking to invest anywhere else or is the u. S. The best game in town . What you want to do is look through this. Dividend yield around the world, we were looking at 4 to 5 on bluechip names, and we want to exploit the bluechip volatility and look through this. My recommendation is dont trade this market, but look for opportunities you want to own, october, november. Caroline stay cool for the summer. Thank you. Caroline lets have more breaking news. General electric down 11 for the worst day lost in 11 years. We know that ge directors calling the allegations of accounting fraud baseless. Ge fighting that back forcefully, saying it is market manipulation. Scarlet Applied Materials out with results, Third Quarter bottomline and topline beating the average estimate. The fourth quarter, adjusted eps midpoint of its range, beating the average estimates, so the stock remains higher in afterhours, gaining 2 . That does it for the closing bell. Next is whatd you miss . We will have more on the Global Economic picture as well. This is bloomberg. Caroline live from new york, im caroline hyde. Here is a snapshot of u. S. Stock markets. S p. Ose higher on the joe whatd you miss . Caroline the bond rally marches on as investors grapple with headlines. , a fifth earnings wow game, revealing a healthy consumer in the face of the trade war. , thefends its financials stock plunges 11 as a whistleblower slams the companys accounting. Fearse recession continue to shake markets. U. S. Stocks swinging between gains and losses. Treasury yields have plummeted as investors remain on edge. Is a managing director of microstrategy joining us now from los angeles macro strategy joining us now from los angeles. N, we have seen this flight to treasuries, gold, the yen. When you look at the inversion on the yield curve, what is it secularyou, recession, stagnation, or we are panicking for no reason at all . There is some panic, but the bond market has discounted the risk of deflation in the future. There is such a decline in longterm Interest Rates, already the term premium is negative come Inflation Expectations falling sharply, so the bond market is grappling this slow will impact the u. S. Economy in the foreseeable lower,will only lead to if not a risk of deflation. It will continue for a bit, even though the tariffs are delayed, it does not look like the u. S. Economy will be insulated from the weakness elsewhere. Madefor president bullard the point that we have had volatility on the year, but still up on the year. Is there a gap between what bonds are saying and the stock market still far from pricing in a recession . There does seem like there is a gap. The bond market is clearly pricing and slower growth. Market isp, the stock grappling with that, but we still have strong returns year today. You have to take into account where we are from a year ago. We have pretty much gone nowhere over the past year. If you look at company profits, we saw a huge run up in the aftermath of the tax cut. Indid see that front runned the stock market, but since then , they have not gone much of anywhere, so the stock market is grappling the idea you are still getting growth in company profits, maybe not stellar, but still matching the return we saw last year, which was pretty strong. If growth is slower, what does that mean for companies and businesses . Becomes thepan now biggest holder of u. S. Treasuries rather than china. Many have been talking about the reason we are seeing the the long end is because we have money coming in, negative yields in japan, germany. How much of this is a Global Growth concern or global volatility concern . Those flows are expressing that, not just out of japan or europe, but against emerging markets. There are concerns that some economies are dipping into recession, said the treasury market becomes a big hedge against the global recession picture we are facing. This is why this momentum to buy the long bond is so strong. Previous episodes show a similar way when you go back the 2008 , thes or 2005 or 2000 perception was the u. S. Economy would slow down too, so treasury yields will probably declined to the lows of 2016. Romaine one thing the chart didnt show his domestic buyers, which have gone up. We have seen a lot of accounts sopping up the excess or extra supply the treasury has been pumping out. What does that tell you about the sentiment we are seeing domestically . That people are concerned and clearly putting their money into bonds, safe havens, not just fixed income, the japanese yen, when you look at gold as well, but that is why some people are saying it is dangerous to assume this time is different, but some people are saying this time could be different because the fact of the matter that you have so many foreign buyers pouring money into bonds because there is nowhere else to go. You look at the bond yields across the globe and they are so depressed, so if you want to go into a safe haven assets, you want some yield. You have nowhere else to go pretty much than the u. S. , so that argument is being made. Joe we are talking about the shortage of the yield globally as a major reason why money might flow to u. S. Treasuries. I think that is part of the reason some people say it is different this time, not quite like past inversions, not about the fed hiking rates to beat inflation, whatever. Or isdifferent this time, that something people say every time and every time it turns out to be a mistake . It is not really different. If you look at the inversion playing out today versus 2005 to 2006, or 2000 to 2001, very similar pattern. We are now getting this huge rally in the 30year. I think this is a very similar effect of how markets discount gdpng off a 3. 5 percent, 4 last year, you have decelerated, alternate ending up in contraction, which we are seeing in the u. K. , germany, and other parts, but the u. S. Is moving towards that. The real yields in the u. S. That we should watch, those are declining quickly. That is what is pointing to this growth concern in the u. S. Which comeariffs into effect in the last tranche and theres not much room to see a big boosting growth in the u. S. , it will likely contract. Ben ofank you to Medley Global Advisors and sarah ponczek. Chart that caught my eye was showing walmart signaling something similar to the yield curve. It is the ratio of walmart to the s p 500. Walmart has been climbing lately. It also climbed in previous recessions. Walmart has been a stellar performer that has outperformed the market overall, nevertheless, there is logic to it because it is the kind of company that people might shop it in a downturn when they are trying to save money, so it could be something to watch in terms of recession indicator if walmarts to meaningfully outperform the market. Romaine it is just about an economic slowdown. Think about consumer staples. 15. 6 , the thirdbest performance on a yearly basis. Secondbest performance on quarterly basis. Over the past four or five months, it is the number one performing sector, so you have a lot of people positioning into these companies. Joe great point. Will pull up the chart during the break. More on walmart, boosting its fullyear outlook after strong secondquarter sales come shrugging off the u. S. China trade war. This is bloomberg. Romaine nvidia out with earnings. It appears to be beat. Revenue at 2. 6 billion. The estimate was 2. 54 billion. 1. 24, the have adjustment was 1. 14. The Company Providing guidance for thirdquarter revenue at 2. 9 billion, plus or 2 . The estimate was 2. 98 billion, that if they get that plus 2 , they would hit that target. The shares are up about 6 . Caroline another company that did well, walmart, standup performance is it managed to wow investors, upgrading its fullyear forecast. It caught the attention of donald, tweeting as we speak, saying walmart, great indicator of how the u. S. Is doing just released outstanding numbers. Our country, unlike others, is doing great. So he clearly thinks this is a show for the rest of the retail landscape. Our Senior Analyst is with us to show thelmart going to u. S. Consumer is really there . That is hard to say because of where walmart play s. If you saw overall retail spending seems pretty good, particularly online. That was because of the sales and promotions around prime day, so walmart has invested a lot in their only channel, groceries but itannel, groceries, certainly indicates the strength of maybe the lower in consumer, or perhaps that people feel comfortable to trade down, not necessarily broad strength, because you saw the department store, the middle tier, so we have to worry also about the highend as Foreign Tourists pullback. Romaine we had the tree from the retail analyst in chief there. I could understand why he would want to celebrate the numbers for walmart. We do have good retail sales numbers, but when you peel back, there is an imbalance in terms of retailers doing well and why they are doing well. Yes. Romaine why is walmart doing better than others . You will continue to see strength at a walmart, target, amazon, multiple categories that categories, home, apparel, and theyre getting that traffic and pushing out retailers, like bed bath beyond. Know, these are commoditized products, broadly speaking, you are getting at these places, so you will go where you think is the best price value for you, and that happens to be those three retailers. Joe we know walmart is doing well on grocery, online ordering, pickup is doing well, and you mention prime day, that provided a boost, but fundamentally, ecommerce, without grocery, without fake holidays piggybacking on a competitors fake holiday, are they showing traction . They have shown growth online. Joe are they getting market share or is that keeping track . I am sure they are getting market share, maybe from offline retailers, but online is not a profitable business. That is why you are seeing this other omni channel investment in the pickup and store, and that is what the retailers are trying to do. You have to offer it, but you dont want to keep losing money. Toys and what im buying on amazon, a large part of them are from china. Are largely from china. Im wondering at what point, walmart seem to shrug it off do you think that is realistic . 15, they are able to absorb it because they have subscale . Scale . They have the scale to push back on suppliers and have been take some of that hit, but other categories will be her, t,rniture, apparel hur furniture, apparel. They will still be competitive to get the traffic in. We thank you for joining us. Lets check the business flash headlines. Worldsising for the largest shipping line delivering profit better than expected, reassuring investors it can keep its outlook despite an uncertain trade environment. 17 increase in craft beer sales for carlsberg. The danish maker raised its fullyear forecast, shows pricing the most enlisted decade. Thanks around the world have announced 50,000 job cuts, and european banks responsible for 19 of them as they brace for negative Interest Rates that have eaten into the profits for the last five years. Santander plans to live in a jobs. That is your business flash update. Romaine back to breaking news on nvidia come out with earnings. They did beat on secondquarter numbers on revenue and eps. The guidance for the thirdquarter revenue they are saying 2. 9 billion plus or 2 . , thestimate was for 2. 90 compass annual return stock, shares of 6 after hours. Caroline another company able to navigate through trade wars, china exposure come and beat, even though they are seeing revenue decline. Joe the inverted yield curve has more than market watchers worried about recession. Politicians are getting frantic. It could spell trouble for President Trumps reelection. How Bernie Sanders is looking to capitalize. We will hear from his Senior Advisor next. This is bloomberg. I am Mark Crumpton with first word news. Move to omar says the block her and Rashida Tlaib from visiting the country is an insult to democratic values, and denying intrigue limits our ability to learn from israelis, d territories. Said israel blocking her from entering is a sign of weakness. A member of the Palestinian Executive Committee agrees she had this reaction. Is their opinions or a rejection of religion, ethnicity, color, or gender, we dont know, but it is clear it is a sign of weakness that they refused to allow them to come in. Inability tohe deal with the newly elected muslim members are outspoken critics of israels treatment of the palestinians and have repeatedly sparked with President Trump. The Philadelphia District attorney set a suspected gunman fired more than 100 rounds during an hourslong standoff wednesday that left Six Police Officers wounded. All were treated and released from local hospitals. He told reporters today the suspect, reese hill, has not been charged, but he will likely face attempted murder and other charges. That multiple contacts with this man, and the system, following its policies and philosophy at those times, did things that rbc did not stop this incident. Did things that did not stop this incident. I think it is obvious because it is obvious now. It should be obvious in law with that what a lot of us to do in Law Enforcement is risk management, and there will be like it or not occasions when there are bad results. Policephiladelphia commissioner richard ross junior expressed amazement that the standoff which began when officers attempted to serve a drug warrant, ended with no winded and no threatening injuries. He added the situation could have been far worse. Nasa scientists are flying over greenland to track melting ice. Warmer air and water are eating away at greenland, causing it to lose billions of tons of ice daily. Nasa wants to know if water is playing a bigger role as scientists have thought come in meeting sea coulds be rising faster than expected. Global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. I am Mark Crumpton. This is bloomberg. Joe the inverted yield curve raising fears about coming odds aon, and increasing downturn could crush President Trumps reelection helps. Byin cirilli is standing with a Senior Advisor for one of the leading democratic candidates, who is helping the message will provide the answer. I am with jeff weaver, a Senior Advisor to Bernie Sanders campaign. A lot of folks on wall street concerned about the prospects for a recession. How is president Bernie Sanders prevent another economic recession . We are coming near the end of the obama recovery and now about to enter the trump reces