Trading day, lets head to the markets desk where julie hyman has the latest. Julie a mixed picture after opening lower but stocks recovered to some degree after the selling we saw yesterday, just in the past few moments, all going green, even just last time i checked my bloomberg, the doubt was lower. All switches the doubt was lower. Was lower. Will the fed discussed the u. K. Boat and should the u. K. Boat and it should be interesting. What is gaining and losing, the losing front, and what volume is showing, the 10 groups of the s p 500 worse is the 20 day average, overall volume up 5 , a surge in volume within the telecom. If you look at the telecom stocks, among the laggards, today is the deadline for bids for jan who and the final four yahoo airlines falling today, Credit Suisse downgraded a couple of an analystmerican, says it is likely that thirdquarter unit Revenue Growth will be disappointing, she says there is risk of further currency headwinds and lower trans atlantic yields because of the brexit vote. 4 andn trading lower by southwest getting caught in a downdraft, down by 1 . Strength from an unlikely source today. Julie health care and biotechs. This is a group that has been underperforming consistently, a oneyear chart, a bear market and then some, down a yearly 30 over the past 12 months, in todays session, something of a bounce back, if you look at the nbi to today, a gain. Individually, not just within biotech the within health care in the s p 500, specialty particle similar local companies pharmaceutical Companies Leading the gains. Matt we will check back in with you. The first word news. More from our newsroom. Downesident obama slowing the withdrawal of u. S. Troops from afghanistan, he said he is leaving 8400 military personnel at the end of the year to help Afghanistan Forces coping with what he calls a precarious security situation. President obama this ensures my successor has a Solid Foundation for continued progress in afghanistan. As well as the fights ability to address the threat of terrorism as it evolves. Said u. S. Sident troops will continue to focus their efforts on training Afghanistan Forces and counterterrorism missions. Frustrated republicans want to grill fbi director james comey and Loretta Lynch about Hillary Clintons use of a private email server, james comey slated to testify in an Emergency Committee hearing tomorrow, lynch will appear next week. She will face questions about her impromptu message meeting with former president bill clinton. Former british prime and mr. Tony blair responding to a new report that highly critical of the u. K. Involvement in the iraq war 13 years ago. He calls the decision to join the Usled Coalition agonizing and said he takes full responsibility. He says British Military and Civil Servants are not to blame for the many problems that developed following the 2003 invasion. Oscar pistorius has been sentenced to six years in prison , he was convicted of murdering ,is girlfriend three years ago prosecutors had asked for a 15 year sentence. His lawyer argued that he was only guilty of being irrational when he fired for bullets through a door killing his girlfriend. News 24 hours a day powered by more than 2600 journalists and in more than 120 countries. This is bloomberg. Thank you. Just two hours from the fed release of the minutes from its june meeting which happen before the brexit vote but economists say it Still Matters and could shed light on a shift in tone happening within the fed. Our next guest change his own fed outlook and slashed his yield forecast for the year from 2. 8 , one of the highest, to now. He joins us thank you for talking to us. You are not the only one who has to revise down their forecast, how difficult has it been to pretty yields this year . Really tough because i am looking at the economic fundamentals and it seems like the economic fundamentals are not driving the show in terms of bond yields, the central bank policy, not just with the fed but also on the qb going on around the world and market development, and certainly the brexit vote is the latest pickup in the road. The twoyear and 10 year yield is rising, how much has this to do with those manufacturing numbers that we got earlier today that showed strength in that sector . I think that helped, a Global People still trying to sit through the brexit wreckage a little bit but if you remember one month ago we had a bad payroll number and my thought was that people might tend to shrug it off as the date went on but we got hit that same day at 10 00 with the manufacturing. Umber, a month ago, very weak we saw a nice rebound today and that helps to give us a sense of the economy, certainly prebrexit. I have to correct myself, manufacturing composite for june 56. 5. Of the u. S. , worrying signs, italian banks look to be collapsing, if they are not bailed out or bailed in, that could cause contagion, the brexit concerns. They create so much uncertainty, people might stop investing, then negative yields all around the world and people continue to buy. Why would you expect why would you see this as a glass halffull situation . Especially in the wake of brexit, things in the u. K. And eu are up in the air, my view is that i do not think that will have a major impact on the u. S. Economy, the u. S. Fundamentals are good, the consumer powering ahead and fundamentals continue to be good, labor markets are ishtening, the u. S. Economy doing all the right things and brexit introduces more risk as the fed people have suggested. My sense is we will get through that ok. Matt what about the yield curve . I was looking at the cleveland fed series which is the 10 year yield minus the threemonth yield, i have it up here on my terminal, you can see it on the bloomberg, 19. 15 is the code, you can see we have fallen to only one percentage point difference between these. If an investor is willing to get paid the same for three months as for 10 years, that doesnt that Say Something bad about Economic Expectations . That has been the historical interpretation, you have to be careful because Central Banks are distorting these markets by intervening. The fed did a lot of qe over the last five years, now others are buying securities and driving yields down. I find it hard to sift through the difference between distortions version versus thatconomic signals markets have traditionally sent, i am not sure they are clean. Talking about economic signals, we have to talk about inflation and the fact that Inflation Expectations are not there, week as he and oil plateau. We could see an oil plateau. You are right, it Inflation Expectations are solved. Solved. Ame time are we have Inflation Expectations are soft. They will be moving higher on a yeartoyear basis as Falling Oil Prices in the second half of last year. And the Court Numbers which were running at 13, all of last year it now at 16 and also will continue to be higher forward. That clash between the data and the expectation numbers is something that will be interesting to watch over the next few months. Matt have we come to the end of the road does it feel like for Monetary Policy and need some real physical change . Physical change . If im running a diner and give discounts to bring people in eventually give to it away for free, at some point i have to redo the whole diner . That is what we need with global infrastructure. A lot of what the fed did in the later stages of the easing earlier in this decade was not very effective. Others have taken it father with negative Interest Rates and there was a time earlier this year when people got excited and it felt like negative Interest Rates were working and now i think people are becoming more disillusioned. Can the fed do anything contrary to what other central bank has done . To your original question, the broader issues in every country and major economy are not really demand based, they are supply based, that is something the Central Banks cannot do anything about. That entails fundamental, structural reform and various countries have Different Things they need to do that everybody has work to do. You, a pleasure having thank you for joining us, Stephen Stanley at amherst joining us. Coming up, our mystery stock of the day, todays pick is writing is best one day gain since march my going up from strong summer sales, it is trying to prove you do not have to be new to be good. Matt you are watching Bloomberg Markets. Lets go to the markets desk where julie hyman has the big reveal on todays mystery stock, here is a hint, it is writing its best oneday gain since march by ringing up strong summer sales, it is trying to prove you do not have to be new to be good. I should probably know this. Goodyear . Close. Something that resales part of its business is reselling something used. Autonation . Close, carmax. It has been helping the shares, they had been down over the past year, nearly 25 , an analyst today at a firm which is a Research Firm that used to be known as majestic research, says there is a strong increase in seen in thee have first two weeks of the fiscal Second Quarter. August,not end until the weather probably have a positive impact. That is helping the shares. Today, in contrast to the past year, up by almost 4. 5 , a bestperforming stock in the s p 500 or were earlier. Interesting reaction. Carmaxs salesf and profit from used cars first make up theed cars biggest proportion of it sales, two thirds, fleet sales, 19 , new vehicles ticking percent. Something else that could be the institute for supply management, nonmanufacturing report, it is a measure of Service Industries in the United States, faster expansion in june in seven months, that is something going into the u. K. Boat that show potentially a good sign for the u. S. Economy. Consumer discretionary shares, one Group Holding up well today, autonation, group 1 automotive and sonic, the auto portion of the equation, broadly Consumer Discretionary doing well. Matt thank you for the second date of car related stocks. A great sector to follow. Thank you. Time for a look at the biggest business stories in the news, the u. S. Trade deficit grew inmate by the most in almost one year, American Companies cars,ed imported more mobile phones, and industrial supplies, meanwhile, u. S. Exporters are still dealing with sluggish sales overseas. Matt for in home the u. S. Hit a threeyear low, sales to nonresident foreigners in the u. S. Fell from 54 billion to one 4 billion in the last year according to National Association of realtors, rising prices have made homes less affordable and the stronger dollar has cut into purchasing power for latin americans, canadians, asians, europeans, and britains. Definitely hear walgreens posted a quarterly profit that beat estimates, the drugstore chain was helped by cost cuts and rising sales of prescription , walgreens is waiting for u. S. Regular readers to approve its 9 billion takeover of rite aid. That is your business flash. Matt still ahead, european banks are taking another beating after the brexit vote, we will show you the chart that tells the story, this is bloomberg. Matt this is Bloomberg Markets. Turning to housing, another u. K. Property has suspended operations in the wake of the brexit boat, henderson has suspended two feeder funds with more than 5 billion in assets, this comes after three of the countrys largest Property Funds have frozen 12 billion of assets to stop investor redemptions. Or more i want to bring in jack setters. What are we seeing . The gates are coming down, investors cannot take their money out yet, not seeing these Companies Get rid of assets yet, are we . Liquidreal estate is not and it will take time for them to meet redemption requests. What is happening after the gates have come down on these funds, the managers are looking at the portfolios and thinking, what can we sell to raise necessary capital or get credit pay the order to redemption requests, now it is frantic, going through portfolios and deciding what is the most liquid asset, things in london which likely to be a bit more liquid, might attract International Investors who might be more in on monday and because of the devaluation of sterling. Matt are they levering up because when people start getting funds for their money back, they will borrow money to pay back the investors that want out, but the ones who are left over are left over with more leverage than before. Contextnk the overall is that these funds are very low if using they were punished badly last time around and have learned lessons. Happy to establish dealt lines in order to with these redemptions, whether or not that will be the auction they go for or selling assets remains to be seen. The expectation is these ,edemptions, most of them reviewed every 28 days, chances are they will be in place for several months in order to give them time to decide which assets to sell and then going through that whole process of selling a property which can take several months. Property prices, a chart that shows London Property prices in blue, the blue line going up to the volume of real estate transactions which has sharply inclined. Declined. Will we see property prices decreasing soon and how much threat would this put on Fund Managers . Ordinarily, you would expect a big falloff in investment volumes with followed by a followup on investment values, clearly the referendum, people were reluctant to put things on the market because word they may have to discount in order to get a bye so waiting until after the referendum, not that there was a lot of access in the market and not being bought, not as much on the market to buy. Interesting, a standoff between sellers and buyers, sellers who have it in their books and evaluations which is based on recent transactions which are all prebrexit, at a certain level, and buyers, if there are buyers who are thinking, if i will be buying into the u. K. , much more uncertainty, i will be looking for a discount. Our expectation is you will have three months of their a little happening before finally some investors go, we will put some stuff on the market because we need to sell to meet redemptions or because the year in is coming up and we have numbers to hit, then you will get a sense of where pricing is. There is a little bit of evidence that pricing could start to come off before the referendum. One of the brokers says they they publish a prime commercial yield and in april of this year, that went up relatively marginally, a few basis points but it was its biggest increase since 2010. There was some signs that we might be looking at some price drops anyway, regardless of the referendum which will not happen. Great talking to you. Thank you so much. Matt we have our chart chat focusing in on not the u. K. But europe. More specifically, the bank problem, the two crisis or the markets, the brexit and in what is going on in the Banking System in europe. Banks4, it shows you some want one italian bank, a british bank, unicredit in blue, Deutsche Bank in purple and barclays in pink. The interesting thing is the market cap dropped, after the brexit boat, they have already been coming down, european banks year toing crushed, date, drops of at least 27 , for santander but 63 for unicredit. The italian bank. Compare that to market cap of other companies, u. S. Companies, Deutsche Bank was less than snapchat worth less than snapchat. Out. I never figured that market cap growth lagging behind beverages, campbell soup, Deutsche Bank going in the negative when we are talking about market cap growth. , guy johnson scary was showing one earlier thats jeremy, nonperforming loans, it would scare me if i were a depositor in a italian banks, italy is the line on the top, the bottom line is u. S. , germany, the u. K. , none of these have nonperforming loans 3 compared to the entire books, italian banks have a percent of 18 of their books nonperforming. That is scary. We will be discussing more when Bloomberg Markets return. Shery live from bloomberg World Headquarters in new york, im a shery ahn. Matt i met miller lets get the headlines for the bloomberg first word news with taylor riggs in the newsroom. donald trump and Newt Gingrich are hitting the road today for a rally in cincinnati. May be a trial balloon to test chemistry. Once theaker paul ryan director of National Intelligence to deny Hillary Clinton access to classified information drink campaign. This comes as republicans continue to express frustration over her use of an email server during her time as secretary of state. Inquiryfficial british calls the invasion of iraq a failure. It criticizes Intelligence Services and the military. We have concluded that the u. K. Chose to join the invasion of iraq before the peaceful options for disarmament had been exha