We want to see Interest Rates continue to rise. We remain comfortable. The valuation between the disconnect between the u. S. And europe is actually growing. We are in more of a political crisis than americans feel. The brightest minds in business drive the conversation in sun valley. We should get over the notion of the politics of repeal, and onto the notion of fixing the aca. For the industry, there is a lot of Energy Around making Net Neutrality work. It is all straight ahead on bloomberg best. Nejra hello and welcome. I am nejra cehic. This is bloomberg best. Your weekly review of the most important Business News, analysis, and interviews. Lets start with a look at the top headlines. On monday, the spotlight fell on Economic Data from china. Supplies gains holding up in june. Signaling demand in the economy there could remain robust in the face of regulatory curbs. Steady as she goes. It is a positive headline. When you look at that ppi, it suggests factory profits are heading in the right direction. As long as ppi stays positive, that is not a bad thing. Servicing debt is such an issue for china. But at the same time, we are a long way from the peak in february when we were 7. 8 . We are not seeing any correlation with the ppi story and consumer prices, which remain tepid. Overall, it is maybe a oneoff restocking of inventories by companies, which is what skewed that number. The overall theme remains ppi is probably headed downwards for the rest of the year. Nejra russia wanted to aid the trump campaign. It is official. The latest reporting is that donald trump jr. Was told in an email that he would receive damaging information about Hillary Clinton at a meeting with the kremlin connected lawyer from russia. The email says the russian government was trying to help his fathers election bid. Is it obvious that any kind of crime has been committed here . Not yet. I am sure everybody, including us in the news bureau, are trying to figure out what the Legal Definition of collusion is. There are election law issues. Youre not allowed to take anything of value from a foreign government. Regardless, it is not good for mr. Trumps son. I spoke with the source close to donald trump jr. Who said they wanted to get this information out as quickly as possible, all in one swipe so to speak. They feel they did not do anything legally wrong. The attorney statement suggests as much. There is no question that this is bad. Politics really could cloud any progress on a host of policy issues republicans want to move forward ahead on like health care. Mitch mcconnell has announced moments ago that the senate will delay the start of the august recess by two weeks. In his statement, he said after the senate finishes its work on health care they can turn to the National Defense authorization act, and a series of nominations from President Trump that mcconnell said democrats have been obstructing. It is a significant response to the pressure he was feeling from members of his own party, saying we have not gotten nearly enough done to go home to our constituents. Janet yellens semiannual testimony before congress, saying the u. S. Economy should continue to expand over the next two years. She stressed the fed continues to monitor inflation closely. We are very focused on trying to achieve our 2 inflation targets. It is not a subjective discussion. You have a lot of members of the House Financial Services committee eager to see the multitrillion dollar Balance Sheet be wound down, to be cleaned up, to be investing in treasury bonds. From that standpoint, a lot of good news. A quote today, he said it is an evolution, not a revolution. The market didnt care. They seemed to be optimistic. I think so. Overall there is a tendency, we are more comfortable with higher rates than we have been. It is more of an evolution. Vonnie the Senate Republicans have released an updated draft of the health care bill. For the most part we knew what was going to be in here. What are the compromises that were not on the original plan . 70 billion to stabilize the insurance markets. The obamacare exchanges. That is in addition to the 112 billion that was already in the original version. It would keep in place the taxes from the Affordable Care act. There is also a significant increase to opioid addiction spending. In terms of more broadly speaking, we were talking whether or not the majority leader would try to peel off support from democrats. Take a look at this bill, no democrats are going to support this. Rand paul has come out against this bill. And senator Susan Collins will not vote for it. Do you expect a vote next week . If we have lost 2, we cant lose any others. We will have to have 50. We will wait and see. Vonnie jpmorgan, citigroup, and wells fargo kicking off Second Quarter earnings season for banks. Investors are getting a sense of how wall street fared. Each bank did better in some units than the bank had forecast, which was an interesting turn. The big thing people focus on is trading. That tends to be where we get the biggest surprises. We had the bank significantly lower expectations. That was approximately a month ago. And jpmorgan coming in in line with those lowered expectations. Fixed income trading better, but Equities Trading worse, but fixed income much more important. Mark jamie dimon is venting after a busy trip overseas. He has some things on his mind, doesnt he . We have become one of the most bureaucratic, litigious societies on the planet. It is almost an embarrassment being an american citizen traveling around the world and listening to the stupid we have to deal with in this country. We all have to get our act together or we will not do it we are supposed to do do what we are supposed to do. Jamie dimon is consistent in calling for a tax reform, and how he thinks that can benefit the economy. We have been hearing from this consistently. He has perhaps exceeded expectations with his enthusiasm on the subject and his impassioned plea for actions to be done. Nejra still to come, as we review the week, the leader of france offers essential insight into the ecbs policy past. Robert kaplan shares his views on what is ahead for the fed. And conversations from sun valley on u. S. Health care reform and other hot topics. And more of the weeks top business headlines. Another opec nation may be ready to follow saudi arabia and sell shares in its stateowned oil business. Many gulf economies and Energy Companies are trying to reconsider their strategies in the face of lower oil. Nejra this is bloomberg. Nejra this is bloomberg best. I am nejra cehic. Lets continue with news from washington, d. C. President trump made plans to fill a key regulatory post at the federal reserve. David late yesterday we learned that donald trump is going to be nominating randall quarrels, who served in the george w. Bush administration. He will be nominated to be the federal reserves chief banking regulator. Quarrels would play a pivotal role carrying out President Trumps pledge to ease regulatory restraints put on banks after the 2008 crisis. This is a big move. This supervisory position, what will this do to banks . It should mean less regulation for banks, and more profit. The question is how much can quarrels get done on his own . A lot of doddfrank is written into the legislation. The fed only supervises the biggest banks. What changes he makes has to get through the fed board of governors and working with the office of the comptroller of the currency to try to standardize regulations across the industry. It would do things like have the volcker rule lightened up. He doesnt want to see banks broken up, doesnt like the Resolution Authority they have put in place to wind down banks if they are failing. He thinks capital standards are too high. He says that causes banks to raise Interest Rates to increase their profits. He says there are some good things about doddfrank. He is not going to take a meat axe to everything. Another possible change would be to lighten stress test regulations. They are considering selling shares and seeking International Partners as the producer of the most crude in the United Arab Emirates tries to expand operations. This is hot on the heels of the saudi aramco planned flotation. The difference here is adnoc does not intend to sell a slice of the entire company at the holding level. It is going to sell minority stakes in its services business. This is still a big deal for a company that was basically synonymous with the abu dhabi government and the ruling elite. It comes as many gulf economies are trying to reconsider their strategies in the face of lower oil prices. Saudi arabia isnt the only one. We have seen oman. They are intending to sell shares in their downstream energy assets. There is speculation of kuwaiti Energy Companies as well. Vonnie Abercrombie Fitch terminating talks with potential acquirers, dashing hopes. It doesnt have many stores left. It is a brand that is tarnished at this point. Part of the reason, if you take a look at the revenue and the net income of this company, it is a pretty stark downturn. Estimates are even worse on both ends. You come into this and say all right, abercrombie need new strategy. That was part of the idea. Lets try to talk to american eagle. We will try to talk to cerberus potentially and take this company private. Abercrombie probably went through the process and found from the buyer perspective there wasnt anyone there. They need to offer a certain price. Chinese authorities want to stop the use of vpns. That is a plan to get through the loopholes in the socalled great firewall of china. What are they trying to do . Virtual private networks are a form of technology that people, private technology people, businesses, they tunnel through the great firewall and access sites blocked outside of china. From the new york times, to google, facebook, instagram. It is a wide range of sites unblocked. The government has taken an ad hoc approach to targeting individual vpns for shutdown. The new move would take a more comprehensive and aggressive approach by asking chinas major state owned telecoms to block traffic that appears to be vpns. Virtually everyone in china gets on to the internet through one of these telecoms. Saudi arabia says the antiterror pact signed between qatar and the u. S. Is not enough to end the diplomatic isolation. The agreement was kept secret until it was leaked to the media on tuesday. The hand written document barred qatar and other gulf nations from supporting oppositions and terror groups. Accusations that it is violating the agreement are false. They are going to go to kuwait, get some ideas, they signed a deal, and this memorandum of understanding around Terrorism Financing would possibly unlock some doors when they go and sit down with the saudi led block later in the day. The responses we got speak to a picture that is insufficient from the qatari side. Underscoring more needs to be done. Throwing the prospect of an immediate resolution into cold water for the moment. Mark getting to breaking wage jobs data out of the u. K. Consumers seeing their spending power eroded. Feeble wage increases despite unemployment falling to a 40 year low. Wages growing well behind the rate of inflation last month. You have to say these figures underscore the dilemma that split the bank of england over whether to raise Interest Rates. The bank of england Deputy Governor says he is not ready to call for higher rates, though he sees the pressures to do so. He says there is reason to see the committee moving in the direction, but there were still a lot of imponderables, saying they make the decision tricky at the moment. The bank of england should be forwardlooking. The rise in inflation is squeezing real wages. It is slowing the economy down. As long as Wage Inflation doesnt pick up, the bank of england will be hitting their target going forward. They realize domestic inflation remains high and the global inflation story is not within its control. It is your turn, it is fiscal policy, it is the direction of travel in terms of encouraging investment that now needs to be the real focus. Amazons stock climbed after another successful prime day. Amazon isnt revealing exact figures, but analysts estimate it generated about 1 billion in revenue. The biggest day in sales they have ever had. They did a billion dollars in revenue in 2. 5 billion gross merchandise volume. Which was a pretty fast growth for them, for the Small Businesses selling on prime day. Importantly, they added the most prime members in a single day in the history of the company. For us, prime is the biggest driver of the Retail Businesses growth over the longterm. The brazilian president had the support to defeat congressional motions that would put him on trial for alleged corruption. That is according to reporting from bloomberg. The case comes as the former president sentenced to nine and a half years for money laundering. Lets start with lula. The market reacted positively to this news. Is that because they dont expect him to run in 2018 . That is exactly it. That is a very good point. We are talking about someone with a very, very Strong Political influence in brazil. Any indication lula may not be able to run for president next year is a good indication for the market. Lula is known as someone that is against all of the reforms are being implemented now in brazil including the Pension System reform just voted this week. The markets have given a clear message here. Any bad news for lula is good news for investors. Theresa mays government unveiled a landmark law that will remove britain from the european union, the repeal bill is aimed at transferring eu laws onto the british statute book when brexit takes place. The draft with hand the government two years to alter u. K. Law through a fasttrack process. Mark is this effectively something that could turn into a vote of confidence on brexit . Absolutely. It could turn into a vote of confidence on the government. You have to remember both conservatives and the labour party, they actively want brexit. Within their manifestoes they think the people voted for it. They want different forms of brexit. Certainly if you are jeremy corbyn, you think this is a way you can get into government, by drawing tory rebels over for the amendments you are planning to add to this bill. It is a litmus test for theresa mays ability to push legislation through. Nejra welcome back to bloomberg best. I am nejra cehic. A pickup in the u. K. Economy has investors wondering when and how the ecb will change its stimulus settings. This week, they guess they discussed the direction of the policy with bloomberg television. Our target is midterm inflation, self sustained, around 2 . As long as necessary, we will implement the recommended policy. What we have to do, what we started to do is to adapt the intensity of this accommodative Monetary Policy to the progress towards our inflation target, towards economic recovery in europe. If you remember, what we did last march, when we reduced monthly purchases of qe from 80 to 60, we announced one month ago that clearly we wouldnt reduce Interest Rates. In the future, this will be our decision next fall, we will go on adapting the intensity of this accommodative Monetary Policy. Do you think the discussion should move quicker though . Do you think the markets are expecting them to be more quickly . I think we have been extremely clear about the predictability of our monetary strategy. If you remember, as far as last december, we announced our Monetary Policy until december 2017, we will see what happens after that. We will clarify next fall. No impatience please. I dont say it especially for the financial markets. I say it because we are independent. Meaning being independent from political pressures, clearly, and from shorttermism and from such market impatience. Are you also waiting for the Political Risk . You mentioned that protectionist policies are a threat to global growth. Is this also what the governing council is waiting for to see how the Political Risks involved evolve for the rest of this year . This is an important characteristic of the european situation. Political risk has diminished within the eurozone. If you remember what was said one year ago after brexit, 2017 would be a dangerous year for the eurozone. Much turmoil expected, which recovery, etc. We have seen exactly the contrary. Our recovery is solid. It is domestic driven. There are Political Risks. They are more the global level outside of the eurozone. The brexit negotiation is a real challenge. The uncertainties about the new american policies. What we have to do, this is a very important stake of the g20 summit in hamburg just happening now as we speak, to go on with multilateral policy with international groups. These are the best solutions for global growth, and the best solution against inequalities. Nejra coming up, we will get a read on the fed and an exclusive conversation with Robert Kaplan. U. S. Energy policy makes green Energy Advocate tom steyer see red. Sparks flew this week when he sat down with bloomberg. Investors around the globe give perspective on the market, a heavy hitter in m a sees no signs credit is contracting. Take a look at the levels of activity, it does not show its subsiding anytime soon. Nejra this is bloomberg. These days families want to be connected 24 7. Thats why at comcast were continuing to make our services more reliable than