Grandmother in west bank on humanitarian grounds. On twitter, the michigan Lawmakers Said silencing me and treating me like a criminal is not what she wants for me. It would kill a piece of me. Israel said today that it will let her visit her family one day after refusing entry along with fellow congresswoman ilhan omar. Trump administration has informed congress it plans to sell f16 fighters worth a billion dollars to taiwan, a move that issue to escalate already high tensions with china. Two u. S. Officials and a congressional aide says the administration have informally notified lawmakers of the proposed sale. The deal would behind the controversial because china loosely opposes all arms sales to taiwan, which it regards as a renegade province. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Live from bloomberg World Headquarters in new york, i am vonnie quinn. Amanda live in toronto, im amanda lang. Welcome to Bloomberg Markets. Here are the top stories that we are following from around the world. U. S. Stocks are rallying to close the week, rebounding from the massive midweek selloff. We will talk to one market watcher who says equities will go much higher in the next four months. Deere is in the doldrums. They lower their Earnings Guidance for a second straight quarter. It is reviewing their costs as u. S. Farmers are battered. Bearish on oil. Opec is giving a downbeat oil market for the rest of the year as Economic Growth slows and trade tensions simmer. Lets get a quick check on the u. S. Major averages. We are definitely seeing some enthusiasm, markets across the board are up. The broader s p 500 has every subgroup higher. Financials and tech as the leaders. 1. 5 move. Goldman sachs is one big influence to the upside. Financials getting a relief rally here. To note, one stock that stands out in a positive way is deere, getting some support from analysts. We will talk about what that is telling the market. In terms of volatility, which has been one piece of the story, take a look at the s p 500. These are the times in the past month it has moved more than 1 in a single session, up or down. For anybody that does not like big price swings, these are tough markets to stomach. Vonnie that is for sure. There was talk about recession looming, what the fed should do, jackson hole, so i decided to look at a chart that shows previous recessions, and where households have stood in those times. If there is a recession coming, households are in a better position to whether it. The blue line is a look at personal income, and its been higher than any of the past five recessions. At the same time, Debt Service Ratio is lower than its been in the past five recessions, so that bodes well for the u. S. Household if recession is on the horizon. Recession came up this morning when we spoke exclusively to Brian Moynihan. He is not concerned about imminent recession, but is concerned about the impact fear could have on the consumer. To fear abouthing recession right now except for the fear of recession. You are seeing a lot of people look ahead and say, if trade war continues, if this does not get solved, you can see this getting to the Consumer Confidence, in the u. S. , which is the critical thing to maintain. Any fear as see how recession is affecting our next guest moves in terms of strategy. Joining us is Charles Lemonides us. Seems like we have been bubbling around the idea of recession for a while, but it has become a real possibility. Has it changed for you, the idea that recession is coming soon . Charles no, it has not. We have focused on the idea over the past couple of weeks for two basic reasons. We saw a lot of volatility out of the stock market, and that creates fear, makes you wonder what is going on. Ofondarily, there is a lot focus on the fact that the yield 10s between 2s and inverted for a little while. The Bigger Picture for me is the difference between 20 tens has narrowed over the past six months ago, has been really narrow, but more important is the fact that overall Interest Rates in the u. S. Have declined a lot in the past six months, so you have an economy that has had positive trajectory and momentum, and over the past six months, you have added the stimulus of much lower Interest Rates. The market is trying to find fear out of its own volatility and focusing on the question of whether recession is coming. Lets get specific about the parts of the market you like right now. Obviously you are saying stay in the market. Where should they be . Charles its an interesting place because overall, the market is not expensive but not radically cheap. The sectors and groups in the market that are likely to lead arehire into a bubbly top the ones that have already had a lot of momentum. If you are just talking sectors and groups, its tricky. The growth expensive sectors are unreasonably high prices, and they will lead you into a bubbly top. If you dont own those, youll have the challenge of not participating. ,f you go into the value stocks and the name of our shop is valueworks, as a group, value stocks will have a miserable run into a bubbly top. Three or nine months were that trend reverses, but for the next two to six years, what leads you to a bubbly high are really exciting, vibrant Dynamic Companies that are changing the world. Those are no longer cheap. You have the choice to either get on board with those, get into the value stocks that are dead, or try to do some sort of stockpicking. We do stockpicking. The notion of stockpicking has by those whoslayed believe the average guy is average, and therefore nobody should do stockpicking. Vonnie proved them wrong. Give us a few names. Charles a couple names easy to buy, right in front of your face. If you are not buying apple with 12 times earnings with 5g coming, you are leaving money on the table. Qualcomm is another wil wellknown name. Earnings will be growing dramatically beyond that. Names to own. Big in the midcap space, we love newell corp. Lovee smallcap space, we bed bath beyond, tidewater. Amanda they often say it is easier to decide what to buy than what to sell. What should you sell at these levels . Apple would be an expensive name, but some are with owning. What dont you want to own right now . Charles a couple of themes that are going on right now that are overextended. A couple companies that have grown through acquisition and costcutting, hollowing out the businesses. Those are Great Stories while they are working and going up. While you could buy a new company and hollow it out, generate margin. In the biggest cap space, broadcom is definitely in that category. 150 billion equity cap. Another one that is very similar but in a different space is transdigm. 14 billion worth of debt. It has a single be plus rating on it. The Credit Rating agencies think there is a credit risk in it, yet, the equity cap is two times the debt outstanding. They have grown by acquisition. What about the idea that value has not been in vogue, and the matter what, we are not getting there . Charles it is not going to get there. Valley will not be in vogue. The trend to growth is the trend to growth. What you have to do in this environment is buy value and cell growth. Find real diamonds in the rough that are being misperceived by the market today, and will be perceived different they in six months or the year. Vonnie but that is always value, right . Charles no. Listen, the russell value index stock is dominated by low multiple stocks, be it financials, Real Estate Investment trusts, cable, whatever. Value stocks in that index will always treated lower multiples than true growth stocks. Those Boring Company that dont have great Growth Prospects are going to underperform into a market top. What we try to do is find the ones that are in the index entry that way but dont really belong there. That is hard work. Amanda always good to talk to you, charles. Ides valueworks ceo. As we watched stock prices swing wildly, many investors are taking cover, so where are they minding up winding up . Money market mutual funds. 18 billion of inflows, pushing assets to 3. 30 5 trillion. Here with the story is our money market reporter alex harris. It is fascinating to see. To me, the most interesting thing about that chart is that long printer in the middle where money markets were unlocked, taking us back 10 years to crisis levels. What does that say about sentiment . Money markets and cash, even though people are blasting it as an investment, is good right now. Money market funds rose with the rate hikes. Those yields are higher. Positive rates with the banks did not go with. You are seeing 2. 3 on a young for a money market fund. That is great. They hurt during the zero Interest Rate period, but assets are up. It is a good place to put your money, if you are afraid and a not sure what is coming next. Fewie you say there are places to park cash, this is one of them. Remember when there was a problem with money market funds . Would that ever be a possibility again . The Security Exchange commission enacted money market reforms, in place. 16. Since 2016. You also saw a big shift in that time to government money market funds. These are funds that invest in treasuries, collateralized by treasuries, treasury bills, things that are perceived a little bit safer and sounder. Actually, they look really attractive right now because tbills, the rates are supposed to rise with treasury coming with all of this supply. Yesterday, treasuries sold four week treasury bills at 30 . You can actually see pockets were this is really attractive. If you are not just looking for yield and looking for a place to ine out, you can find Value Addition to that safety and soundness. Amanda lets make some forecasts. If we continue, if treasury yields fall, we have that Goldman Sachs 1 call, some saying zero negative is possible for the u. S. In that would happen, but we expect to see massive inflows into the money market . You can. Money market yields tend to lag fed Interest Rate cuts. You will see higher yields even as the fed continues to cut, and that is why you are seeing two plus percent on these money market funds. You can still see money flow in. Look at 2008 during the financial crisis. We had a lot of inflows into the prime side, which tends to be riskier, and then the government side as well. People wanted to feel safe and secure. Better to be there and earning 10, 15 ining equities. Vonnie as always, Great Stories on your bloomberg. Harris on our fixed income team. Nothing runs like a deere. John deere gaining despite a miss. What are the bright spots in the report boosting the stock . This is bloomberg. Vonnie this is Bloomberg Markets. Im vonnie quinn in new york. Amanda im amanda lang in toronto. John deere reported its thirdquarter earnings this morning before the bell. Despite missing estimates, shares of the worlds top tractor maker gain the most in seven months in the session, climbing as much as 5. 1 at the high water mark. To walk us through the numbers is our agricultural reporter from chicago. Lets start with what deere is saying. There is obviously something up with, they saw customer orders delayed. The big question is whether they are temporarily delayed or not, whether there is so much uncertainty for farmers. There is a lot of uncertainty for farmers. They did say they had their early orders were flat versus last year. That is actually a good sign, given all of the uncertainty. That is partly maybe why the shares are up. Actually good demand in the circumstances. Lydia, how curious, much were they able to talk about the outlook, how much visibility did deere give . In terms of the fourthquarter outlook, things look pretty good. Surprisingly. Growth expected for both their agriculture and construction segments. Part of that is assuming that farmers are going to spend a lot money on large equipment, which is debatable. Farmers, withy all of the uncertainty in the ag environment, they are going to pay down their debt, or save it. It remains to be seen. You say they kept their outlook for ag levels. They lowered the Construction Outlook from 11 to 10 , which i see as pretty robust. Is there a danger they are overly optimistic on the Construction Side . Side, on the construction the construction segment did really well this quarter. Ofcourse, there are fears Global Growth slowing. Theirid also pullback forecast for u. S. Gdp growth, so i think there are some questions there. Up 3. 7 right now, year on year, 8 . Our thanks to lydia mulvany. Bearish, opec stays more from the latest oil market. This is bloomberg. Amanda this is Bloomberg Markets. Im amanda lang in toronto. Vonnie im vonnie quinn in new york. Time for the latest Bloomberg Business flash. Flywheel is shoving done more than a quarter of its cycling locations. The new yorkbased fitness location will close 42 locations, four studios in los angeles. It is the latest sign boutique exercise businesses are struggling to keep up with home exercise. Companyal agreement applied for a nasdaq listing. The company aims for a 1 billion ipo in september. A new owner for the brooklyn nets. The alibaba chairman is paying about 3. 5 billion for the team and its arena. Stakeviously bought a 49 and had until 2021 to exercise his option to take control of the club. Latest business flash. Amanda opec says Global Oil Markets face a somewhat bearish outlook, amid a slowing economy and a trade war that may drive prices higher, with saudi arabia shouldering most of the burden in production cuts. Here with some insight is jessica summers. Lets start with opec is saying, and obviously we have a lot of crosswinds, including the slowdown in china. Is it surprising bit of pessimism from opec . Jessica absolutely. When i dived into the report, i saw they were signaling this bearish outlook for the rest of the year. What it meant to me is now saudi arabia will face so much pressure in terms of whether or not it will choose to cut production, and even is already cutting more production that it promised. Bottom line, saudi arabia and other opec producers dont want to see oil below 60, they want to see it at 80. We are far away from that number for them to balance their budgets and recover some of the government spending. They have a lot of thinking to do. Meane what does it all for u. S. Shale producers with oil below 60 . If opec decides to continue cutting production or cudmore, that will make u. S. Producers even happier and drill faster. Right now they are showing below 60 a barrel, they are just fine. Crude production is at record high levels. Crude production in north dakota is at record high levels. They are showing they can operate in this price environment. Amanda what about the socalled opec plus . Will russia stay in agreement with holding cuts . If they have not already, will they cheat . Jessica that is up in the air right now. What i want to point out, saudi arabia did allegedly have some calls with opec producers last week about oil policy in response to these falling prices. So we will need to Pay Attention to the september meeting in abu dhabi, where russia will be meeting with opec members, and we will need to see if they change their policies. Vonnie we have seen a lot of your your action on trade headlines. It appears the oil market is also trading in that kind of pattern. Jessica it is. The market is so uncertain right now. These trade headlines cause worry over oil demand. Says heame time, trump may talk to xi jinping. We are seeing all of this backandforth and forth trading up of headlines. When i talk to traders and analysts, they are concerned about this trade war. Vonnie i think we both want to say thanks. Monday,mming note on days ahead of the jackson hole annual meeting of the kansas city fed, an exclusive interview with boston fed president eric rosengren. That is coming up wednesday. Thanks to our oil reporter jessica summers. At 54. 7t now is trading 0 a barrel. This is bloomberg. On ritika gupta. Lets get the first word. President trump is meeting with National Security advisor to talk about the Peace Agreement with palestine. Talks have been regularly taking place in qatar although afghan authorities have been sidelined in the process. Have refused to hold talks until it reaches a finding with the Trump Administration on withdrawing forces. The congo Ebola Outbreak is showing no signs of slowing down. It has spread to a near province with one death. More than 1800 people have died since the latest outbreak began. Workers have struggled to contain ebola despite the use of a vaccine. Many people in eastern congo do not trust doctors and medics. The russian pilot who managed to land his disabled plane in a cornfields has a quick landing was his only chance to keep his passenger safe. He spoke to reporters in russia today. He landed his plane so gently that just one of the 233 people on board was hospitalized. People across russia hailed him as a hero and the kremlin said he and his crew will be given high awards. The government of greenland says it is happy President Trump has taken an interest in the nation, talking to a thin allies about buying the island for the u. S. But it is not for sale following reports trump has spoken about the notion of buying greenland. The danish territory issued a statement to clarify it is not on the market. The white house commented it would not be the first time an american leader tried to buy the Worlds Largest island. In 1946, the u. S. Proposed to pay denmark 100 million to buy agreement. Global news 24 hours a day on air