Pick up as well. Negative rates, plus the global bond rally and the outlook for Central Banks across the world with blackrocks cio rick rieder. That is coming up later in the program. Jon, overall you are looking at equities still near the oneyear high. Positive for the year for the First Time Since january. You see it on the move today, up about. 4 . The ftse up as well, about a quarter of a percentage point. Futures in the United States possible futures in the United States positive as well, getting back to a record high. Eurosterling, that broke out to an august 2013 high at one point in todays session. Better euro strength against that pound weakness. In a commodity market, wti crude closed out last week. Positive again today, up. 3 . 44. 63. Now at friday was all about weak retail sales. Twoyear note is coming in again, down a basis point. We trade at. 698 . The week ahead, all about the fed guides with the minutes coming up, and a treasury market in focus. Asx lots of fed speakers well, how they are looking at that data. Lets check in with our Bloomberg Team for indepth coverage of all about top stories. Can mccallum is in tokyo. Guy johnson is in london, on a slew of post brexit Economic Data. Weak look ahead at the fed minutes. Ken, talk us through the disappointing numbers today. Ken the numbers were a lot worse than expected. The main thing was business spending. People were expecting it to rise. Some analysts are thinking that this is a result of the yens rise, which is causing companies to sort of hold off on making investment plans. Consumer spending is not very strong. It is growing at about 0. 2 percent. Still a drop off from last quarter. Had gdp coming in at. 2 . A weaker yen was not the case. It seems like the boj data was not weak enough. They were not going to do anything right away and what were looking at now is next month, september. When the board reviews the efficacy of the boj stimulus some far of the boj stimulus so far. The big focus is fiscal spending. The government is probably going to need to spend more to get this economy going, and we are waiting for the details of that right now. Alix thanks so much, ken mccallum, joining us from tokyo. As we get that news out of japan as well as the u. K. , on the Brexit Effect. Is in focus this morning London Property prices. I want to bring in guy johnson. Low for longer is something we associate with rates and Central Banks. We are not talking about London Property. Guy prices have been dropped and they are staying on the market for a little bit longer. In the summer, people are less inclined to put their properties on the market. But it also me a Brexit Effect. There was a start of a slowdown already in London Property before we had the brexit vote. It is just an exacerbating factor coming into the mix. We saw the survey out today year on year it is positive. It is a month on month, the 1. 2 that is catching everyones attention. The rest of the country is having an effect, but it is by no means the kind of effect we are seeing in london. Prices are a little bit softer. London prices are probably London Properties are probably taking longer to sell. Is this the new normal . Market,the effects thats in the fx market, the new normal with a slew of data coming throughout the week. It may be that those negotiations in europe are going to take longer than many people thought they would. Guy it depends on which paper you read. Times,ead the sunday we may still be talking about this in 2019. Theresa may indicating that the ministers should get on with it and get the u. K. Out of the eu the tea leaves are certainly being read. Not getting much information as to what is going to happen next. That is one story to focus on. As you say, the pound getting hit again, falling against the euro. We get a whole host of data. The big one for me is the retail sales number later on in the week. Guy. Barbecues, guy, thank you very much. The brexit story right now is the guys in europe wanted to begin. There is no team to put on the field. Guys in europe do not have that much leverage over theresa may. We are going to learn a lot more about the fed because we are going to get some insight on when they are on where they are heading. They have minutes coming up from the fed on wednesday. Thursday we will hear from the head of the San Francisco fed, John Williams. Suzanne barton, give us a sense of what we are looking at here, and specifically what might surprise us. , the the july statement fed noted that nearterm risks to the outlook have been diminished. People will be scrutinizing the minutes to find out what exactly does that mean. Was the fed talking about improving Economic Data since the previous meeting, or was the fed referring to the easing in financial conditions, or a combination of both . That is what people are going to be focused on. The second thing is people will be looking to see how the fed characterizes how the fomc members are how they characterize how the fomc members are relating to a potential fed hike. In the past, the fed has used minutes has used words such some. , many, or are they looking for a faster pace of rate hikes or a slower pace . David one of the raging debates among analysts is who is running Monetary Policy right now. Is it the fed of the markets it is it is it the fed or the markets . What will be that what will we be looking at . Makene the data does not it easy. Friday we got retail sales, and that was unchanged in july. Tomorrow we get cpi numbers, and that is not showing a robust growth in inflation. People are focused on this. The market is focused on this. The fed knows it has a little bit of room because the data is not exactly cooperating. David thanks so much. Barton. Susanne alix we get to see all the big names buying and selling over the last quarter. That leads into our first mover, activision. Dan loeb adding position to this stock. Activision also added other shops like america prize, citadel. We will get more of these after the bell today. As they trickle out. William hill is looking to be the m a rejection here. This betting office is rejecting 888 and rank. They had already been four. They had raised the bid 3 , and now william hill is saying they will not accept the second bid, calling it inadequate. Analysts state that the bid will not be raised again. Midamerica and post properties these two companies are , looking ates synergies of about 20 billion. It comes down to a little over 72. 50 a share. It is expected to be a taxdeferred deal, but it is also playing on the rental market. This will have about this will have about 105 man this will have about 105 multifamily units. To gived trump is going a speech today and he will say if elected, he will give up on nation building favor of a Foreign Policy that favors destroying Islamic State and other terrorist organizations to he is also expected propose a new ideological test for admission to the u. S. Reports of gunfire at jfk two terminals being evacuated. No shots were actually fired. As summer in olympics the summer olympics hussein his third gold medal. Checking the metals scoreboard, the u. S. Is on topic chinas second with 45. Great britain is third with 38. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more i am an muchtries, andra i am emma chandra. Jon the bank of japan, pressure builds as gdp slows. Up next, what needs to what governor kuroda needs to do next. This is bloomberg. Jon to tokyo we go, where business is slowing. Gdp at 0. 2 , less than the economist 0. 7 forecast. Michael mckee joins us. It is amazing the conversations that you have with guests. It goes from that data point to a conversation about september 21 on the boj. If it has not worked in three years, why will it work after september 21 . Mike the biggest problem that japan has is brexit. The yen is strengthened down to 101 this morning, and that is taking a real hit. They bank of japan are in a race to the bottom with other Central Banks, and they cannot win because everybody else keeps cutting as well. David how much of this is a confidence issue . Japanese businesses are not investing because they do not have confidence in the future. Can the japanese government reinstill that kind of confidence . Michael there are a couple of things that economists keep coming back to. The third arrow of abenomics which they have not implemented, allowing more immigration, more efforts to get women into the workplace, and easier Labor Relations laws so that companys can feel better about hiring and having a better slew of applicants to do it. But there is still a problem with generating inflation. An interesting idea today guaranteed higher wages to workers, almost wage and price controls in reverse, so that people spend more. Alix that is a bright spot of the gdp report. Gdp. Rength in michael private consumption is up. 2 . It is still not generating a whole lot for the economy. It keeps them sort of neutral, kept the economy from contracting, but it is not enough to generate inflation, which is what they are really trying to get to. Jon michael mckee, thank you. In theversation we had 5 30 meeting was, how do you get companies to spend . If you are the bank of japan, that is a passive whale. We arenow on japan, going to keep going with Paul Christopher, wells fargo head globalnstitute market strategist. The firm has 1. 6 trillion in assets. Welcome to the program. Lets pick up on this discussion with the japanese data. How troubled are you by what it says . Paul it is discouraging to see the low number. , a little bit under the consensus. It is ample maddock of the problem in japan and around the world that consumers it is emblematic of the problem in japan and around the world that consumers cannot drive the economy themselves. David let me raise something that has been raised before on this program. That increasedce military spending could help japan at this point . Paul yes. Prime minister abe a few weeks ago proposed additional spending, about 250 billion worth. The market was unimpressed principally because there was no real way to fund it. You can use an additional defense spending, and i think japan is wanting to head in that direction, becoming better prepared defensively. But unless the boj is willing to fund it, it will not get you much progress. Market,e boj is in the buying etf. The boj now owns 60 of the nations etf market. They have so much of certain stocks, it could grow exponentially over the next year if everything is equal. What distortion does that create in the market when it comes to liquidity and keeping some reforms off the table . Paul as you pointed out earlier, the bank of japan is part of what japan needs is a lot of corporate reform. You mentioned some of the labor reforms that are needed, and also corporate reforms to get more earnings back into the hands of investors are that will be important Going Forward. The boj is not the sort of investment that will push for that. The bank can buy securities as a way to boost wealth and make people feel wealthier and perhaps make them want to spend more, but if they are not feeling confident in the overall economy, they are simply not going to spend. That is the limit of Monetary Policy. Jon the bottom line is, look at japan as an example. When things get difficult, the increase credit. In japan, you push things aside and buy more etfs, it seems. Longer does the story a jumpt, when they reach to that more stimulus is not the answer anymore, and you get a policy mistake . Paul you head to a policy and a political crossroads. You could say an impasse. In to deal with that issue per you cannot stimulate in traditional ways. You need new reforms to implement it, and his reform simply has not taken hold yet, or in some cases has not really been tried. The next step for japan could be some sort of new political approach. Jon Paul Christopher is sticking with us. It seems the same story does not go away. We have the same answers to the same problems. Nothing changes, and we fastforward to september 21, and we say what else is governor kuroda going to do . One answers to the boj have what answers do the boj have . Alix in terms of the market moving, it is the dollar now, 1. 29, the lowest since july of 2011. S p has still advanced in six of the past seven weeks. We will debate if you ask equities if u. S. Equities can continue with the bearish call. This is bloomberg. Is is bloomberg Paul Christopher, Wells Fargo Institute head of Global Market strategist is still with us. In your most recent note, you 21. 90,ned your target, 2290. In alastair looking at revenue declines for the First Quarter. For the Third Quarter. Paul investors are looking for growth at this point. An earnings target of around 1. 19 is what were looking at for the end of 2016. But we think investors are looking into 2017 and seeing a number that is perhaps higher than that. We are looking for earnings growth, and that is what drives the markets in the current period. Alix where does that growth come from . Paul from some combination of revenue gains that we think will be modest. It will also come from energy flattening out. And probably it also comes from further costs squeezing that you may see from some firms around the industry. David wont cost squeezing come out of wage increases . Paul it will, and it will keep wage growth slower, but that is not necessarily a bad thing for longerterm investors like our clients, since if wages get to that 3 , 3. 5 per year growth rate, then you have to worry about margins being eaten into quite a bit. If wage growth can continue to improve but slowly, that is more favorable for the markets in the longterm. David isnt there a negative feedback here, though . Paul by itself, that would be true. But we are also seeing growth in hours, and growth in jobs. Paychecks are still getting bigger, and more and more people have paychecks. Jon the conversation we have had over the last couple of weeks is, when does this market top out . You have u. S. Corporate bond premium the smallest in a year versus treasury. Does credit continue to lead equity . Paul we have been watching credit quite closely. We notice for example that shortterm credit has started to exceed cash levels that have been very high since the beginning of this recovery. So that is a warning sign that we are maybe beyond the halftime marker of this recovery. We think we are somewhere in the Third Quarter of the recovery. So credit remains something to be watched, but not all firms have used credit badly. Some have used it well, and that is going to remain a positive for firms Going Forward. Alix what leadership rotation do you expect if we get the 22. 90 target . Paul we have seen a lot of progress out of the yieldoriented sectors like utilities. They have done well this year, but if you look back on the last 20 years, utilities have only done this well 99 of the time. It is very difficult to find a time when utilities did not did this well, is what i mean to say. We think utilities will rolloff. We think the cyclical stuff will roll back on. Alix thanks so much. Cyclicals watch him. Coming, janet yellen on hold for another rate hike. Betting against another increase in rates this year. From new york, this is bloomberg. Jon to the city of london with renewed sterling weakness and focus, a 31 year low, the cable rate handled very briefly,. The pound weaker on the t10 space. From london to write here in new york after a very hard weekend, we get back to work. In europe, ftse of a quarter of 1 . For 2016 for the First Time Since january. In the fx market, we talked about the sterling weakness. Stronger euro, weaker pound. In the commodity market, big gains for crude. The biggest week of gains since april. 44. 76. On lower bond market, yields was the story friday after a softer Retail Stores sprint. Treasuryly for the market last week. 10 year yield dropping the most. It is the fx market moving today we have individual movers. Kicking it off with valiant getting a neutral rating and doubling its size target to 25 a share from 11. Giving it a less chance for shares to collapse. Could see more asset sales and opportunity to renegotiate debt. Deals taking a look at more retail, h m reporting a very solid july. Shares hit a three month high over in sweden. July sales up 10 in local currencies. Wrapping it up with a potential m a for this monday. Entertainment one, kkr is considering weighing a bid that will start a bidding war. Rejected the one previous deal saying it was inadequate. I spoke to one Hedge Fund Guy in Entertainment One who says he would rather see them raise the bid. Now for what you need to know outside the world of business, and much andra is here. Second night of unrest in milwaukee, wisconsin after Police Killed a black man. At least one person was shot. Police say the man it was killed had fled from a traffic stop and then turned toward an officer while holding a gun. A dramatic scene in southern louisiana where rescuers broke a window of a sinking car to pull out a driver. Record flooding has killed at least five people and forced 20,000 from their homes. Rivers havestates crested, but some are still rising. Houses in london are taking longer to sell the naked before the brexit vote. A property are taking longer to sell before the brexit vote. Global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. This is bloomberg. David we have been talking a lot about the Central Banks cutting Interest Rates, but we dont always focus on the realworld effects like people counting on pensions down the road. Storiesing must read about how b