Abigail . Abigail you were talking about energy outperformance. This leaves the russell 2000 and a positive spot in the near term, but the longer term, maybe still a bit cautious. A big fourthquarter selloff relative to the 200day moving average, the momentum indicator on bottom. When it goes above 70, overbought, below, oversold. The russell 2000 has been slipping downwards, and that slowly but surely says the buyers have been exiting in a very orderly manner. Right now, the russell 2000 back above the moving average, so in the near term, that is bullish, but it is sloping to the downtrend, and we have a series of parish lower highs, something to think about going into the end of the year and certainly into 2020. Renita . Renita taking a look at some of the big laggards, health care. Merck is dragging down most health care stocks, down during the session, and this all happened in wall street, including goldman, sounding the alarm to a potential drug pricing headlines in the coming weeks, following congresss august recess. They see there will be a focus on the amendments to the drug pricing deal. Bloomberg intelligence says they will race for a bite when congress returns, noting that lawmakers would face inflationpegged rebates to medicare. Abigail or caroline . Caroline we have got some breaking news. A rating cut to junk by moodys, now seeing a ba1 for these companies, over at moodys, ba1 overall,t, a so this is clearly one for us to watch coming from moodys, and we know autos have been under fire, whether it is tariff concerns, trade concerns, and, indeed, overall the element of a need to make money in an era where perhaps people are not purchasing as many car so quickly. Guest, sherryour paul. This is interesting. This is a time when corporates corporates when have been doing this, and are we expecting a rush . They will not think be as intense. That is a pretty easy call to make. I would say hindsight is 20 20. That was kind of the great tell, the ability to absorb that amount of slide with fairly low concessions, and how you see that reflected in the stock market, for the first time in a very long time, buybacks you look at kind of gross buybacks or the kind of sectorneutral flavors, buybacks are really outperforming. That is partially a financial story, but that is partially this Financial Engineering that is able to take place and carry on. You see the appetite for it. That is something new working in the market that has not been before. If you look at the last leg when we were down in august and then the surge to close at alltime highs, the buyback story has a lot to do with it. No stockresting, gaining over 2 . Again, its weeks to the same theme it speaks to the same theme we are seeing. In your view, could this have legs, this rotation, and some of these sectors, do you think we could see them rally for a while . Sherry yes, absolutely. Absent an outcome around china tariffs, which is putting a lid on the market when you think about how enduring this market has been, we can absolutely see that rotation. I also appreciate what luke just said about buybacks. We are in the beginning phase of a monstrous corporate quantitative easing in times of how corporations are preparing for, again, the recession that has not come. Unlike, you know, the lack of advance notice that they had come Corporate America had, in 2001 and in 2008 and two and i think we went to and 2009, and i think we want to encourage investors. I fall on the side that corporations are doing this because they believe they will be able to deploy the capital for the benefit of shareholders, typically in the form of share with Small Companies in the united states, but taking them away from tariffs and currency issues, and to that capital in a way that will benefit shareholders, so i do think that this has legs, and i also think, just quickly, one more thing we should really take that big sure view on is that we are in the biggest bond market. Like, we are not talking about the bond market bubble anymore. I think we spent a lot of time talking about the stock market bubble, but if you take a look you couldyear term, really start to argue that we have actually been in a secular sideways market with two massive cyclical corrections within that trendline versus what is inarguably one of the biggest if not the biggest bond market bubble in u. S. History, so when you start thinking about risk trade, is my point, i would much rather have an appetite for under favor, outoffavor companies that are getting politicize for whatever reason and still have good earnings and pipeline and cash flow getting politicized for whatever reason and still have good earnings and pipeline and cash flow. I would rather own a stock for 30 years, i guess is what i am trying to say, and so that is my thought. Selloff in saw the treasuries last week, and everyone said the trend is still for lower yields. We are seeing treasuries get sold off again, and it is not just the u. S. It is globally. Are you hearing Different Things in terms of how much further this rally has to go, or is it just yet another pause . Luke that is just the way it has been. I think a lot of people are watching the ecb, particularly, and we have seen this global premium continue. Bunds do can transit into treasury, and vice versa. That is certainly something. If you look at the Technical Analysis on the bund, like the gap between 40 and 20, fairly quick yields to the downside, perhaps it could happen just as quick to the upside, and about 10, 15 beats away. Joe if we are going to see all of these rotations, could global outperformance be part of that . Ubss position is that we are underweighting. Particularly, in aspen disproportionally it has been disproportionally impacted, with the politicization of the global economy, so we are staying close to home in the united states, kind of go big and go along, meaning big companies, a longterm view, although i would say one interesting thing to consider about that is whether or not we see what is essentially, in my personal view, a global reordering, and you all had a front seat to this with the handover of hong kong in the late 1990s and covering european equities and the failure of nieminen all of those front row seats in history making that these two have had , the failure of Neiman Marcus all of those front row seats in history making that these two have had. The fed takes a look at how they are going to cut rates to normalize the curve. Is the equivalent of five rate cuts by the end of 2020, but some of that might be impacted by what the europeans do, so we are in a global ing, isthat is now 2. 0 what i call it. We are in a 2. 0 moment where this tariff negotiation is changing the last 15 or 20 years of agreements, so we are sort of embarking on the conversation rather than concluding that in october. Caroline we have the ecb later this month. Can it do enough . I amy i do not know if the best person to answer that question, although i will say the policy of negative rates going more negative, just from the psychological standpoint we talked about can we will our way into good economies i think it really mentally ways on people. This is my 20 years of experience, managing money and the mentality around money, as an influencer to outcome, right . Human variables having a direct impact on performance versus fear index, so i think that the ecb would be cautious to think about that, but i do not know that they have a whole lot of room to go, and my hope is that here in the u. S. , we do not end up in the same situation. The ecb is going to cut on rates more than expected, i do not think you would be able to tell whether the euro or risk assets go up and down, and i think that is still a very open question. Scarlet thank you. Sherry paul and luke kawa. The showins that is for the closing bell. This is bloomberg. Live from bloomberg World Headquarters in new york, i am caroline hyde. U. S. Stock markets muted on the surface, but a key rotation going on. Anchor the question is, whatd you miss . Parliament set to be parliament set to be suspended, and asus brought surprising economic picture. Calling out at t, disclosing billions in a position in a Telecom Conglomerate and some critical advice. And good news for fannie and freddie. Steven mnuchin says a deal to allow them to keep some earnings is in the works. Great britishh a pound, because it is pretty since strongest level july. Boris johnson struck a rather on tone on xi jinping brexit, addressing one of the key Sticking Point standing in the way of a deal. Went minister johnson we to the border several times before the good friday judgment, and i can say now, as i said many times before, the u. K. Will never ever institute checks at the border. Caroline joining us for now with more analysis is the president of an institute. Caroline, i think part of it is that the consumer in the u. K. Is buying stuff now of there being a weaker pound and restrictions on what they can buy, and similarly, people who are buying experts exports in the u. K. Are doing this ahead of upcoming problems. I think that is a can tripping factor. The government has, her majestys government, has committed to loosening, and while the cash is not there yet, i think people are expecting it, so i think that is part of it, but i will admit that this data is a little better than i was expecting. Romaine so do you discount it, adam, that we could see the negative ramifications with what ,as been happening with brexit while in the short term, the signals may not be there, that in the long term would be . , i do not discount that at all, remain romaine. Will not bethey able to make later or will be much more expensive to make later, and therell be fiscal policy. Cannot just keep borrowing indefinitely, so i think there will be a cost paid later. Moment, int the terms of what can the bank of england do to prevent this pain being felt at a certain point, you were a member of the bank of england, have they felt too behind the curve, with the Federal Reserve easing and the ecb set to . Does the bank need to do something if we are going to deal with the payments down the road . Adam i think not, because, frankly, i think it is far more important that they do not seem to be making an opinion on brexit or ahead of the uncertainties of the exit date, so i think the bank is right to sit there and not do anything yet. That they have more room to cut Interest Rates and of theirt qe than some counterparts in europe, so the bank will be in a position to act. The constraint is more about what happens to sterling and not about being behind the curve now. It is possible that sterling could be in a very weak position, which could constrain them. Romaine when you look forward, adam, at what the government is going to look like later this year or early next year, do you think it will still be led by Boris Johnson, and if not, how do you think that changes the economic landscape . Aam i am really not qualified person to say whether or not it will be led by Boris Johnson. I have been saying for a long time that it is kind of all or nothing. You are going to end up with a coalition that is led by labour and presumably by jerry corbin , orno brexit or brexit something led by the tory coalition. I do not see an intermediate place. Obviously, as your viewers are aware, there are some pieces of the Jeremy Corbyn economic agenda that might do damage the way that brexit does, so either way, it is not looking great for the u. K. Going forward, unless the coalition constrains corbyn and avoids brexit. Caroline what do you think about the country as its future as an economic powerhouse, Going Forward . This as the end of situation as being a powerhouse . Adam there is a distinction between the prominence versus the Economic Performance of the u. K. I think just as argentina and other countries have shown, you can have something bad happen to you, and if the currency adjusts enough, you can make up for it to some degree, so in terms of the u. K. , people will be poorer, but it will not be terrible. In terms of the u. K. Position, how many people want to hold sterling assets, whether it is seen as a safe to invest or a useful place to invest, no longer being a bridge into the eu, under those circumstances, i think that is much more doubtful, and i think, frankly, either a corbyn or a johnson government will give people concerns. Caroline as we look for any type of certainty from a political perspective, what data are you going to be looking at, Going Forward, or what kind of hard facts will be you look will you be looking at, particularly 2019 into 2020 . Greatthat is a really question, but i think, frankly, for the next few months, it is going to come down to what is the election, what is the election fought on, and when is the election . I am sorry to be that simpleminded, especially since i am not good at predicting the election outcome, but, frankly, i think this is the rare occasion where this is a choice point about the economy and where they are in the world, so i am not going to be looking at anything else but that, frankly, for the next several weeks at least. Romaine all right, adam, adam the petersonent of institute. From new york, this is bloomberg. Automaker bmw is facing an increasing number of geopolitical headwinds, the german automaker downgraded, citing risks from brexit as well as global trade uncertainty. Bloombergs matt miller caught up with a representative at the auto show and asked for his outlook. It is a complex market environment, 2019, more complicated than we anticipated, but we are gaining segment share in three major areas of the world, europe, the u. S. , and asia, in this leads to our strong momentum. Tensions are not comparable to 2018. Why . Because there were things in place between the u. S. And china in 2019. What will happen in 2020 will, of course, very much depend on what is happening between the u. S. And china in the coming then will be have a hard brexit. Concerned that the trade war and slowing demand will have a downside effect on the sales of bmw cars Going Forward in 2020 . Bmw is probably best prepared for volatile markets. Why . Theuse it is clearly one of areas, particularly in production, we most focus on, because we know from the past that markets are volatile. Have had volatility, more in the last couple of years than in the previous years. Volatilee to see markets . Of course, not. Things are not predictable, but we welcome it. Why do we welcome it . Because we have Strong Production on the one side, and we invest in the u. S. , as we speak. We are strong in europe. We invest in europe, and, of course, we have our chinese production, as well. In europe, your main concern is brexit uncertainties. Have you set aside any provisions in case of a hard brexit, and do you have increased concerns of what is going to happen after the october 31 deadline, given what is happening in the now . Nicolas we have communicated over the last year at every opportunity. Bmw understands free trade. What do we do in case of a hard brexit, october onward, number make it does brexit extremely likely that wto tariffs would be introduced . Wto tariffs would mean that we have a crisis in many markets in order to offset the negative impacts, and this, of course, would have a Volume Impact, and the Volume Impact is finally leading to negative production impact, and this is why we really urge to find a solution and to avoid a hard brexit. Nicolas peter was speaking to our bloomberg reporter. Ford having its senior rating cut to junk by moodys. This is interesting, romaine, because s p and fitch have ford on a negative outlook. Amaine yes, ford made commitment last year, saying they were going to try to maintain. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. I am Mark Crumpton with bloombergs first word news. Demand the Government Hand over communications about the decision to suspend parliament it plan for a no deal its plan for a no deal brexit. Prime minister Boris Johnson is trying to make it harder for lawmakers to block his plans for a do or die brexit. He is suspected to suspend parliament until october 14. And the italian premier has won the first of two confidence votes. The vote came after a day of aelding insults during boisterous Parliament Session from the opposition that italy got a new government instead of a new election. In the senate is expected to be much closer. The International Held a meeting in geneva today amid concerns tot iran was continuing jeopardize the landmark 2015 nuclear deal. Its use offended advanced centrifuges prohibited under the deal. The acting director of the iaea will be going there. Cornel the activities in iran continue. In regards to the protocol, with my discussions in tehran, i emphasized the importance of full and dynamic cooperation. Marc the nuclear deal was intended to keep tehran from Building Nuclear weapons, something iran denies it wants to do, with the u. S. Unilaterally withdrawing from the deal last year. President trump says u. S. Talks with the taliban and afghanistan are dead after they collapsed last week amid what seem to be in imminent deal to end the war. The president tweeted he canceled his planned meeting with the taliban and afghan leaders at camp david this past and now more bloodshed. Group of attorneys general have opened an investigation into whether alphabet and googles search applications are violating privacy law. On the steps of the u. S. Supreme court today, investigating Business Practices harming competition. This investigation is not a lawsuit. It is an investigation to determine the facts, and right now, we are looking at advertising. The facts will lead where the facts lead. Marc todays announcement followed one from a separate group of states that disclosed an investigation into facebook