100 day moving average. Alixjon no conviction. Mr. Delay comes down and says right is live around 22 . I cant imagine why, given whats happened in the past, the markets wont believe them. Alix we will be watching all market it isthe sort of like all quiet on the western front before the fomc. Jon with the exception of moves and equities in europe. The ftse marginally lower come up by. 1 . In the fx market, low conviction, lack of direction. Yesterday, turn it upside down and thats what youve got. Weaknesses make him a strength today. Yesterday,ness strength today. The rally in brent crude, coming down a bit today. Citigroup saying the opec fueled rally should give you a bit of caution. Of the yield curve on treasuries, that will be in focus as well. To your notes up about one basis point. Notes up about one basis point. ,he long end of the guilt curve one or two basis points. Some superlong that over in the united kingdom. A little bit of extra supply. Alix lets go around the world and check in with our Bloomberg Team for indepth coverage of all of our cap stories top stories. Mike mckee with a preview from the fed minutes from meeting. The odds of a fed rate hike for 2016 finally above 50 . Any clarity we will be able to get today . Said the july statement the nearterm risks to Economic Outlook had diminished, but its not provide any warning that a rate increase was imminent. We did get that yesterday with dudley and lockhart. We have pulled forward the timing of the next great move from march yesterday morning to december today. You look at the chart and it defines market schizophrenia. Maybe the minutes will give us some clarity as to fed thinking. Who is on what side here in the debate . At this point, people dont know what the fed is doing. Dudley encompassed the fact that that that might not even know what theyre doing as well. You are mispricing and imminent rate hike, but it is still lower for longer. Are we looking at a total rethink of fed policy in the fed . Mike it is not a total rethink, we are getting very close to it. Sheets the feds balance since the beginning of the crisis and nominal gdp, they put a floor under the crisis in 2009. Since then, they have not been able to generate growth or inflation, no matter how big the Balance Sheet gets and how low Interest Rates are. Janet yellen will have that meeting in september. Hank you very much, mike mckee no doubt, we will see the ship continued to looking to inflation data versus the labor data. Jon we got some july jobless claims the number may not be what many expected. Lets bring in Simon Kennedy from london. We had the ilo report which a lot ofs people thought the jobless claims would rise. They did not. What is the story ech . Theres a lot of volatility that has to be taken into account. That is why the pound struggled we can talk about the resilience in the u. K. Labor market even after the referendum. Whether that continues remains to be seen. We are forecasting higher on implement, retail sales data tomorrow showing a big insight. Jon weve had the inflation data, we just had the labor market data, tomorrow is retail sales. What do you think the bank of england will be watching more keenlyn anything more than anything . Whether they are transferring onto high street or main street that is the key data tomorrow. Jon i would still call it the high street. We had the jobless claims and they dropped and most people expected them to increase. You are a ceo, what are you going to do . You have low visibility come are you going to cut jobs . Cutting jobs takes conviction, pausing hiring does not. Job openings in the u. K. Fell. Is the real story. We have other data we want to look to in the united states. Target reported secondorder earnings about 30 minutes ago. They beat on earnings per share, but there is an disappointment. Isnnon the key number comparable samestore sales. Those dropped 1. 1 , the first time they have declined for target in more than two years. The ceo said it will not get any better in the second half of the year, the company cutting their guidance for the full year and the second half of the year. Weve seen the stock down about 3 , there were some warning signs this could happen. In the first quarter, the ceo was saying they could see sales dropping a difficult consumer environment, consumers are not spending. We have seen that at some retailers but of retailers, we still seen providing strong results. Not everyone is a winner. If you have a great, strong product and great store experience, consumers will be going there. If you dont have what consumers want, people will not just go there because your doors are open. David what did we learn about lowes today . Vonnie yesterday, home depot yesterday, shannon home depot look goed good. Lowes has not been able to catch that tailwind. A very different story when it comes to Urban Outfitters. Come sales rose by a surprise 1 . The expectation was for a decrease of 1 . The stock also raised to buy at ever core. It was brand sales that jumped about 5 in the Second Quarter. Urban did use more money and spent more money on technology, didevertheless co manage to raise those samestore sales. Companyopping, this might be used for the seven chip intel is 15 of this compass revenue. Price target lowered by about 12 . Lonal that might not be demerger may not des merger might not happen. Emma donald trump is shaking up his struggling campaign yet again. Stephen been and is a former banker at goldman sachs. The Senior Adviser will become the campaign manager. All of this is seen as a demotion for the campaign manager, paul manafort. American investors have lost considerable confidence in trump. Registered voters with money in the market narrowly picked trump over Hillary Clinton. Turkey wants to free up prison space for the thousands of people arrested following last months failed coup attempt. Some 38,000 prisoners will be released. Since the coup attempt, the turkish government has detained 35,000 people for questioning. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Jon coming up, the great or not so great rate debate. Dudley and lockhart calling the september meeting alive one. Live one. This is bloomberg. Alix this is bloomberg. Fed minutes from julys meeting out later today. After the more hawkish comments history, there is now 50 chance of a rate hike this year for the First Time Since the brexit vote. Oining us now is greg peters he manages the Prudential Total Return Bond Fund and helps to oversee the firms assets good to see you. Do we need to see a real rating of the yield curve higher if we continue to see higher rate expectations . Greg its amazing to me that there is so much focus on the fed minutes this morning. Its clear that the markets have been leaning against what the fed has been saying now for the past couple of years. Now, it is the coin flip in the year end. They are data dependent. I was reading a bunch of articles last night and this morning, what to look at in the fed minutes. Im not sure its going to be a lot there to hang your hat on and into the day at the end of the day, the fed is data dependent. Jon are they . Greg supposedly. If you do get strong Economic Data here in the u. S. , i do believe you have a replay of last year, fourth quarter. Alix are we looking at a backup in the yield curve like we saw in japan a few weeks ago . Greg i dont think so. Im not overly worried about the curve steepening, im not worried about race moving higher in a meaningful way. The rates moving higher in a meaningful way. Im inspecting yields to rally the markets are dissipating the fed is tightening for no reason and leading you closer to the edge of recession. Im not overly worried about yields moving higher. Where i can be horribly wrong around that is the fiscal side. You hear a lot of chatter about physical, fiscal, physical, not only in the u. S. , but also in europe and japan. If that has teeth to it, that could be a game changer. It is too early, it is just chatter, but that is the one thing we are focused on in terms of changing the yield dynamic. Jon we have this conversation a lot on this program. These countries we talk about running fiscal, theyre running huge budget deficits. What is fiscal stimulus even look like . Were talking about fiscal stimulus in the u. K. How much bigger does the budget deficit need to be for to become stimulative . In my mind, having negative rates and not being aggressive on the fiscal side is a wasted opportunity. I understand the debt stock is too high and we are over indebted across the globe, but you the end of the day, need to see these countries take advantage of this negative rate environment in order or i think. In order to move forward, i think. Understand the need for austerity, but i dont know if austerity is the answer at this went when you are in such a negative yield environment. Alix the concern is we are seeing a lot of bubbles being created. Carl icahn weighed in on this yesterday. Moneyot of buy back is not going into capital. Think of it as a rich family that has a lot of fun, sits around the pool and keeps printing up ious to the town. You keep going until you go broke. The registries are building huge bubbles. Alix you take on Duration Risk or credit risk . Might i wonder if there be Something Else in these minutes that could come out that could change where markets react. Maybe we should change the entire paradigm you heard it from williams and bullard a few months ago. Would that change the market . Greg i think so. Im not sure its going to be out in the minutes. Jackson is attacking that same issue. Im not sure exactly what was going to come out there. Yes, it is being revisited, and i think that is a good thing. Its clear that after so many years of this stimulus type of policy, youre not seeing the boost in the thrust. I do think williams is on to something. Honestly, they are waging the wrong war. There is a different paradigm and i think the fed is slowly starting to recognize that. You, greg peters. Some breaking news for you. Potential m a wednesday, united bancshares said to be in talks to buy cardinal financial. Through. Still may fall cardinal financial moving higher by 3 . Jon we take you to the world of politics some potentially bad news for mr. Donald trump. Those with money in the markets are losing confidence in the republican nominee. We will tell you why. David this is bloomberg. Stock has been dropping, according to a new poll put out by Bloomberg Politics. Trump was narrowly picked over clinton that number is down from the advantage in the june poll win trump led by 50 30 . For more, we bring in megan murphy. This targeted registered voters with money in the market and it shows that trump is losing some of that advantage. Megan hes lost a lot of that advantage. There is a bigger split with people who have more money in the markets. More money you have in the markets, the more you are losing confidence in donald trump as your guy. He still has a narrow advantage with people with relatively smaller sums the market, but if he loses that high money, traditionally establishment leaning crowd of people, that is not a good sign for him. David you also asked specifically about tax policy. It was interesting come on the buffet role that says people who make 1 million or more should have a minimum tax of 30 , it showed a narrow majority in favor. Megan these statistics read incredibly, but it goes to highlightgoes to tax plan which does favor the wealthy. Is he really in alignment and on the right side of these issues with the majority of people hes targeting . The number ofg rates and reducing the overall tax rate, it was somewhat surprising not the support one would have thought. Megan it is counterintuitive. We think this cohort of voters would have been the most sensitive to bringing the top rates down, lowering the Corporate Tax rate. We have not seen that level of support there is still a way to go, but it does show that perhaps this trend of the perception of rising inequality that perhaps the tax system that is rigged in favor of the wealthy, this is something that is gaining traction more upanddown and across the voter covert. David there seems to be a shakeup at the trump campaign. Megan it is a shakeup. They cannot talk their way out of this one. Bannonve elevated steve and kelly and conway known to outspoken,y antiestablishment member of the party as this very senior figure in the campaign. Paul manafort was brought in to keep trump disciplined. Talking all day today whether hes been demoted or how they want to spin this one. Campaign firing on all cylinders that david rumors that roger ailes might be helping out some. Alix the fed back in focus. We will review the fomc meetings out at 2 00 p. M. Eastern today. This is bloomberg. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Alix this is bloomberg. It is 7 30 a. M. On wall street, 12 30 in london. Ciscots are coming at according to crn. They will cut as many as 14,000 employees worldwide, 20 of its workforce. Yuki labor markets and showing signs of continued resilience after the referendum on eu membership. U. K. Labor markets. Billion Sovereign Wealth Fund gained 1. 3 after losing. 6 in the first quarter. From the u. K. P property market. They had to get out of some of that due to brexit. Jon we sit here 24 hours ago having a discussion about a dovish fed, now talking about a hawkish fed. Its all about the next big meeting. The most important meeting at the fed since the last one until the next one. September 20 its endeavor 21 and september 21. Equities a little softer in todays session. 18 out of the 19 Industry Groups lower on the session. The ftse a little softer as well, down by. 25 . Dollar weakness yesterday, Dollar Strength today. The bloomer dollar index bloomberg dollar index up. 3 . We will be talking to bnp paribas later on in the program. By freezingriven output at alltime highs in saudi arabia. Citigroup saying you should take some caution. Brent down. 3 . 75are up one basis point to extra supply coming to the market, you set that up, yields up at the long end of the curve, too. Lets get to emma chandra for first word news. A monstrous wildfire has forced 80,000 people to flee their homes the fire forced the shutdown of interstate 16, leaving driver stranded for hours. The British Government plans to get tougher on accountants and advisers helping their clients avoid taxes. The treasury says these sanctions would make would be enablers think twice. At the summer olympics, the fourth gold medal for simone biles. A so stopping showstopping floor exercise. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. David the big news coming later today will be the minutes from the fomc july meeting. From mohammed elerian from Bloomberg View entitled what to expect from the feds minutes. Minutes. , productivity, low inflation, external threats iveness offect fed policy overall. What might the fed be able to tell us in these minutes about why we are not a young economist who owns a franchise on economic growth, there is something going on now that is where the argument begins. , with amost interesting lousy subpar productivity, combining that with weaker Industrial Production is, what can they do given all they need to do but not make productivity worse . David does it all come back to corporate investments in the end . Tom that is a really sophisticated question, actually. It comes back to how you jump start corporate investment, Capital Expenditures and get back to the good feeling of , a word for aing better use of capital given the amount of labor you input in. That is the heart of it. How do we spur investment . Can you do this with the great distortion of Interest Rates . David we just heard from president williams raising questions about the overall paradigms. Is that fed getting ready to think maybe the overall paradigm has to shift . The Cottage Industry of u. K. Economics mohammed came out of i think of the Great Program at Rice University as well. , they arethree basis in a bit of a prisoners dilemma. They are sorting through that with Great Respect for the yellenges jerr chair has she was handed a fed policy were none of it was in the textbook. You talk about effectiveness, you really wonder how they can regain the confidence in the markets. The dots are here and the vigilantes are down here weve never seen this data. They are in the middle of Monetary Policy trying to reinvent the entire structure. The have to be totally fixated within speeches and , keeping theents sotoric and dialogue going they are effective to the september meeting, effective to the december meeting and many suggest they will do nothing until next year. Right now, the markets are dead. You count the severals and the ews upid that sets us beautifully for those minutes later today. Lets continue the conversation on the fed with minutes outtings today paul krugman on bloomberg tv. Paula an accumulation of evidence that Monetary Policy is pretty ineffective. We came into this thinking Monetary Policy of zero rates was an effective, then along came qe, then along came negative rates. This all these other things that Central Banks can do, but its not doing much. Jon Monetary Policy is an effective, according to paul krugman. Joining us now is tom porcelli. Fascinating about