On the markets. This is a phenomenal asset. The return on those insurance those instruments could be quite spectacular. There is much more growth than a lot of the skeptics think there is. I dont think there is enough confidence today that we have broken out of the 2 growth world. Anchor it is all straight ahead on bloomberg best. Anchor hello, and welcome. Im vonnie quinn. This is bloomberg best, your weekly review of the most important business news, analysis, and interviews from around the world. Lets start with a day by day look at the top headlines. The week began with a fresh batch of Economic Data from china. Chinas secondquarter gdp data show the second economy continuing to grow at that brisk rate of 6. 9 . Gdp was better than expected. , there expecting 6. 8 estimate of economists at bloomberg. Factories are pumping out goods at a faster clip. Goods production at 7. 6 , more than a full percentage point more than the estimate. Retail sales much better than expected, 11 . We were expecting 10. 6 . This economy, even though the authorities are trying to curb excessive debt and over leveraging, they are seeing still Strong Production and growth. Overall i think all numbers suggest the economy has stabilized, led by strong fiscal policy. The heightened Monetary Policy conditions has not affected the real economy much. Anchor disappointing Quarterly Results from bank of america and Goldman Sachs, Second Quarter fixed income training had the half of Lloyd Blankfeins term. Overall trading coming in line was a little worse, but equity is better. There is a little of a tradeoff there. There were some bright spots in the quarter. Is the lowest cost ratio accrual for the first half in the public history of goldman. That shows they are doing what they can in terms of managing costs. Is very tiederica to longterm rates. Anytime you see the tenure not doing what we think it should be doing and picking up, that is bad for bank of america. The thing that really sticks out is Net Interest Income for that bank, which is core revenue for Something Like bank of america. That is something that fell despite predictions two months into the quarter saying we would at least have 35 to 50 million increasing. After two more republican senators announced their opposition to the health bill proposed by gop leadership, not only is Mitch Mcconnells effort to pass that dad, but repeal only and replace later looks like it is a no go, as that, but repeal only and replace later looks like it is a no go, as well. This bill that failed miserably, last night you have senators coming out and saying they are against it. The bill fails. That you have the Senate Majority leader saying let three vote to repeal this, and less than 24 hours later you have senators like Susan Collins saying we dont even want to have a vote to proceed. Discussionsou that are already underway for a new passport, but they are going to be relying on a very narrow path forward. Hasor Morgan Stanley reason to celebrate for the second straight quarter. On traders posted more fixed income revenue than its larger rival, Goldman Sachs. How did Morgan Stanley manage to do better than goldman yet again . Reporter one of the things we were highlighting in our stories is the commodities sector. This is something Morgan Stanley has largely gotten out of. Interestingly enough, Goldman Sachs didnt say we had a terrible loss in commodities. Anchor wasnt of the worst quarter ever for commodities . Reporter right, maybe not a loss anchor but not good. Reporter one other item was that theyve got the rates that did offset that. The bank of japan, as expected, took no steps to dial back their aggressive monetary Stimulus Program as other Central Banks around the world are looking for the exit. Anchor but the bank did surprise biotechnology it was too optimistic on achieving its 2 inflation did surprise by admitting it was too optimistic on achieving its 2 inflation target. Risks. E are a number of there are the tax hike schedules for 2019. It is pretty bad timing. I think it would be best if the government delayed the consumption tax again. Another is much bigger, much more important, the ability of Prime Minister oabe. We have seen the decline of Prime Minister abes approval. Is that goes, there goes the support for the bank of japan. Cannot maintain the current aggressive stance. That is the biggest risk. Thatr draghi said financing conditions are the last thing the firm wants. Backpedaling from all the discussions that came out is very visible. This is a very delicately worded statement. I think he is going to attempt to going to tip toe. There is quite a lot of uncertainty lurking around the r around there. Anchor Robert Mueller, the u. S. Special counsel investigating Donald Trumps campaigns possible ties to russia, is now investigating a broad range of transactions involving the president s businesses and associates. Give us the details we know for certain. Reporter we know now that special counsel bob mueller is looking at a lot of transactions that involve not president trump, but developer brand name trump going back at least a decade or further. Anything involving russian money going into trump apartments, certain individual developments , the 2013 Miss Universe pageant in moscow, as well as the sale of a Luxury Property in palm beach almost 10 years ago. The Legal AuthorityRobert Mueller has, given to him by the deputy acting attorney general, is very broad. The language is to the effect of, matters around the Russia Campaign collusion questions and any other matter. I think Robert Mueller has decided that these other matters are very much part of his purview. He was the fbi director for a long time. I would call him a prosecutors prosecutor a prosecutors prosecutor. I dont think he is going to hesitate to bring down the hammer on donald trump, donald trump jr. , anyone who might be caught up in the crosshairs of this. I think he views his business as to get to the bottom of this, wherever it leads. Anchor there is a staffing shakeup at the white house. White House Press Secretary sean spicer announced his resignation after President Donald Trump hired financier Anthony Scaramucci as his communications director. Lets get more with bloombergs chief washington correspondent. Reporter this is a very clear shakeup in the Communications Department of the west wing, something that has emerged as one of the most combative with the media, and one of the most visible. There are several sources in and out of the white house that says the president had grown frustrated with sean spicer. Sean will continue to serve the administration through august, and president has also appointed Anthony Scaramucci as communications director. I dont have any friction with sean. This is the white house in the United States of america. We are serving the president. I want to make sure our cultural template is that we put the president s agenda first, which is perfect for the american people, and that we serve his interests. If we have a little friction inside the white house inside of that, it is ok. Im a business person. I am used to dealing with friction. Anchor still ahead as we review the week on bloomberg best, Neil Atkinson of the iea produce oil prices will keep rising. Plus, barry giller has no love for president trump, but still likes what he sees of the u. S. Economy. We also have a thorough roundup of the weeks earnings report. Up next, more of the top business headlines. It is not a ceo change. It is very much acceleration of the plan. Anchor this is bloomberg. Vonnie this is bloomberg best. Lets continue our global tour of the weeks top business stories on wall street, where a looks to auyout firm future without its founders. Anchor they have just taken a moving to executives in their 40s to prepare for the cofounders no longer being at the helm. They have basically run the firm since then. This has been their shop. People wondered, as they get be inheir 70s, who would line to take over. This answers the big question not just for the public investors and shareholders, but also the institutional shareholders in investments and endowment funds that give to kkr every year. Anchor icv confirming this morning that karen mccall is , and willhe next ceo start her new position on january 8. There were rumors she wanted to go into politics. Why she going to itv . It does seem like an odd move, going from aviation to broadcast television. She is probably at a point in her career where she would like to try something new again, to some degree. Itv is trying to reinvents itself. The question is, does she still have that touch . Does she still understand that industry, having spent seven years away . Anchor the ceo of the chemical giant resigned, citing health reasons. He will be replaced of the former head of the Specialty Chemicals division. Everything is playing second fiddle to the elliott story. Will these resignations reopened the door to what is happening . Guest that is the question. Months that it can come back with a new offer. That ends on december 1. The successor is currently the head of the chemicals division. Promised the markets to do this within a year. How can the attention be retained at the head of the chemical divisions is now leading the company . Anchor it looks to be the biggest proxy flight in history. Try on has dominated its founder to the board of Procter Gamble. Of 200e a capital million. They have been talking with Procter Gamble for some time. Why did they decide to move . In july there is a meeting where they came in and presented ideas for how this company could turn around and be a little more responsive to the market changes. They suggested at that meeting that nelson get a seat at the board. The Company Directors decided that wasnt the avenue they wanted to go because they already had a plan in place. Anchor is this a restructure situation . Breakup, andnot a not a ceo change. It is very much acceleration of the plan. China moving to reduce Financial Risks and stimulate growth. Some banks are said to have been sold to lower rates on Wealth Management products. The Wealth Management products part of this push is particularly important. There were 4 trillion in total. There quite popular for retailers looking for a higher , much higher than you can get on other products. The banks like them because they are on alternative source for funding the money markets. The reason regulators are worried is because they are saying if you are paying yields that high, there is a risk you might passed on those higher funding costs to your customers and hurt the real economy. Regulators are trying to come in and put a squeeze on the Wealth Management products, cutting these banks, bring down the yields you are offering customers to make it a bit more affordable. It generally is part of this wider crackdown on containing risks. Ishor the german carmaker bands overseas recalling mercedesbenz vehicles to avoid an emissions scandal. They are saying they have not cheated in the way volkswagen did, but they have that they may have pushed the boundaries in testsof what emissions allow for. What they are trying to do is come good with the German Government and say, ok, we are going to get out ahead of this came best the state. Where get ahead of this thing. This is this fixes the problem for them, they get away pretty cheaply. Anchor trade talks in washington between the u. S. And china off to a rocky start, with News Conference is canceled on both sides after the commerce secretary wilbur ross criticized beijing over that trade imbalance. It is time to rebalance our trade and investment relationship in a more fair, equitable, and reciprocal manner. Anchor will be kind of managing expectations going into this dialogue feel more a little acrimonious than expected . The Opening Statements were. The rhetoric was reasonably sharp. China also warned the United States not to bring in geopolitics to this because any sanctions would torpedo talks, maybe a direct reference to the steel sanctions the president has threatened. The hope was that could agree to continue meeting, create an action plan for a one year of negotiations to follow their 108 negotiations that came out of the maralago meetings. We dont know if they got that far. Neither side talking yet. Anchor Deutsche Bank ceo telling employees to prepare for in a videotaped message, saying there is an offer a lot of detail to be ironed out and agreed depending on what the rules and regulations turn out to be. Basically what we are seeing is the big banks are now making decisions, assuming they will britain going into the eu. They are deciding they will have to have parts of their training businesses in the eu to be successful after brexit. They are preparing for a hard , and moving ao large portion of the trading business into frankfurt. Anchor talks between Scripps Network and potential suitors are heating up. A deal could be announced by the end of the month. Both discovery and communications and viacom have been holding separate talks with the tennesseebased owner of hdtv and the food network hgtv and the food network. Is,ne of the main factors who will control this combined company . The control of a combined company is somewhat tricky because all three companies here are owned by families, or at least control to some degree. Scripps network by the scripps family, discovery by john malone , and viacom controlled by the redstone family. Is a deal is done with a cash and stock component as my sources are telling me, both sides will have to figure out exactly who controls the votes here. Those can prevent major competitions to a deal getting done. Im sure thats what the advisors of these companies are working on right now. Vonnie welcome back to bloomberg best. U. S. Crude Oil Inventories fell more than expected, giving hope to producers and investors that global stockpiles could shrink and prices rise in the second half of the year. It is still a complicated. Complicated picture. s had spoke head spoke with lumber with bloomberg. Opec spoke with russia. Will they achieve the cuts . Guest it has been reasonably successful. For the month of june, the latest date of which we have reliable numbers, it looks as if the compliance rates have slipped a little. We will have to wait and see what they decide. Opec is responsible for its own decisions, and we are observing it just like everybody else. Reporter i know it is extremely difficult to predict the price of oil. We dont formally publicly forecast oil prices. Thatwe are able to say is based on our current outlook for supply and demand in the rest of 2017, we do expect stocks to start falling during this second half of the year. On that basis of falling stocks, you can expect the price to be supported, and expect the price to rise, but not by very much because every few dollars that the price does begin to rise, it incentivizes more oil from the United States and one or two other places. To some extent, any rise in prices is capped by the availability of short cycle oil. Vonnie coming up, more of the conversations on brexit, gridlock in washington, and the markets. This is bloomberg. Vonnie this is bloomberg best. Brexit talks between the u. K. And the European Union continued this week, but was Prime Minister theresa mays Political Support at a low ebb, some question whether she can rally the nation behind an exit plan. The former u. K. Ambassador to the u. S. Discussed the plans ahead with our jonathan ferro. Reporter can you draw a parallel between what is happening here in the u. S. With health care and what is happening in europe with the brexit negotiations . Guest there are moments when it looks a little similar. There are a lot of people who decided they would vote to get rid of obamacare without working out what they want to replace it with. I think in the u. K. , there were a lot of people who decided to vote to leave the European Union on what many would say was a pretty dishonest perspective without working out what the alternative was. Think that is one reason why there is once again talk of maybe thinking again and perhaps even holding a second referendum. Orwerent getting that two three months back, but now it seems to be back on a number of agendas. Reporter for that referendum be on . What kind of specifics with that referendum be on . Guest is not it is not for the near future at all. If there is ever another referendum, a can only have an they could only happen if parliament decided there should be one. I think it would have to be, do your do you not accept the deal do you or do you not accept the deal the government has come up with