Julie hyman is taking a look, starting with the dollar. Julie its always a good day when i see peppa pig footage. This is how it has behaved going back to that post u. K. Vote to leave the european union. It is actually at its lowest going back to just before that vote. Yet had a lot of fed officials and we talked about this yesterday. Fed officials saying that the u. S. Market participants are underestimating the fed Interest Rate increases this year. Folks do not seem to be getting the message as we have seen the dollar come off of its highs. We have a tenure auction and we will talk about that when it happens. Rip and i put w. A. R the december chart down here on the bottom. It has not exceeded 50 . We are around 42 of a chance of a rate increase their at that december meeting. Getting back to stocks and we are seeing the same playbook today, except a little bit more of a movement than it was earlier. You have seen a little bit of a turn for the worse for u. S. Stocks here. No records hit today. The nasdaq taking the worst of it, down a half of 1 . Still not reaching that 1 level in terms of the s p 500. If you look at the intraday movement that we have seen in s p, you would see stocks started out a little bit higher and then really gave up the gains shortly after 11 00 a. M. If you look at the oil chart today, its a very similar move that we saw in that chart. We saw the oil was leading the s p 500 downward and we do have an oil chart as well. After theoil rose weekly inventories report. That was even after there was an unexpected built in inventories. Then it came down sharply. That led stocks lower. Alternative energy is also in focus today. That is as we got earnings from sun power as well as solar city. Somehow is really setting the tone, reporting what some called a guidance bomb in terms of its forecast cut. The Company Expects to lose as much as 175 million this year. In may, the companys projection was for a gay a game as much as 50 million in profits. This basically has to do with the man for utility scale solar projects. That demand has been flowing sharply. Bylyst really blindsided this change. This has to do with sun edison. That was floating the markets with assets. Reported and it was seeing a slowdown and installation. That has been weighing on that stock. Scarlet thank you so much. Julie hyman will be back on with our mystery chart. Oliver lets check in on the bloomberg first word news. Mark crumpton has more from our newsroom. Mark a new poll shows that Hillary Clinton has retained most of the bounce she received from the democratic convention. The Bloomberg PoliticsNational PollShows Hillary clinton leading donald trump 50 to 44 among likely voters. When thirdparty candidates are factored in, her lead shrinks to four points. Donald trump denies he was threatening violence when he says gun owners could stop a clinton agenda. He is says he was referring to their political power. Hillary clinton wants to essentially abolish the Second Amendment. By the way, if she gets to pick her judges, nothing you could do, folks. Although the Second Amendment people, maybe there is, i dont know. Democratic senator Elizabeth Warren of massachusetts tweeted that trump mixed that threats because he is a pathetic coward. A Justice Department report out today says that Baltimore Police officers routinely discriminate against blacks, repeatedly use Excessive Force, and are not adequately held accountable for misconduct. The report also says officers make large numbers of stops, mostly in poor black neighborhoods and unlawfully arrested dozens for speech deemed disrespectful. In turkey, the president is coming up the heat on the nations banks. Lower mortgage rates, they will consider it an act of treason could th treason. Market average is 14 and the president says it should be 9 . In venezuela, the council has support for ation. Eferendum this year the review and 90 day verification that would push a referendum into the coming year. Dayal news 24 hours a powered by more than 2600 journalists and analysts in more than 120 countries, i mark crumpton. This is bloomberg. Scarlet easy money centralbank policies have pushed yields on more than 12 trillion below zero for sometime now and its starting to damage volatility, making emerging markets more appealing. Here to break what is happening is the bloomberg fx analyst and spent many years as an fx trader. The currencies, how far along is this rally . Are we in the fourth inning or eighth inning . Levelsre at free brexit and overall risk sentiment, which is a positive for e. M. And negative for some developed countries. As long as we see Central Banks at liquidity, the e. M. Sentenc e has room to run. Oliver you plotted against the s p 500. Why we looking at this chart . Vince the risk ratio as you look at the currency index, which is a batch of the currency deals we have been talking about, which is more developed countries, as the index rises, you are seeing appreciation of em currencies and people getting into yield, happy to take the extra risk with those currencies there. It tracks the same risk sentiment, which follows the s p. As risk rises, so do equities. Oliver what is interesting is the fact that you can look at that and see that the market is at alltime highs. It would suggest to some extent strengthen u. S. Economy and yet people are not going to. Where does that break down . Vince the problem with the dollar is that when you look at u. S. Assets and u. S. Treasury yields, you have the fed still in a tightening mode, whether it is not december or when you believe it. The same Capital Appreciation in u. S. Treasuries that you would get in other places where countries are easing. Even though yields or less, you have a bigger chance for Capital Appreciation and that is the draw away from the dollar toward those currencies. Scarlet speaking of countries that are easing, the british pound stuck in a range this month. Dip below a dollar . 30. What is with the bank of england challenges finding qe . Vince it is part of the confidence issue. The pound was trading off its highs, but still well above 130 and the auction announced it went well and it just collapsed. It is that relationship where we have seen people with the confidence with the bank of england to follow through with their qe. Scarlet theres also a lot a big data points coming up in the u k next week. You have got unemployment and inflation and something beyond the surveybased Economic Data points m we have been getting, which will cement whether the country is stuck in recession. Vince not sentiment votes. Oliver one thing i want to bring up real quick, moving it eastern, looking at the japanese yen, one thing im curious about is as a former trader, there was a lot of talk about when the japanese yen was weakening there was a pretty strong carry trade borrowing in japan, taking that money elsewhere. Is that now considered washed out or is there still some people using that play . Vince it has taken a lot of it out. You have seen recent months the dollar go from 107 to 11. That is a big hit in pnl to stick with carry trade. Scarlet the yen has gained 19 versus the dollar this year even as global stocks have rallied. Once upon a time it was a gauge for the appetite for risk. What is it a proxy for now . Vince every time i talk to someone about that, you just throw logic of the window. Last night it was machine to orders, which were well above expected. It is a proxy for cap x. You thought the Second Quarter was went to be dismal. That is going to spike the boj to do more easing and more fiscal stimulus. The number explodes off the top nd and everybody throws in the towel and the yen appreciates overnight. Scarlet thanks so much. That is bloomberg first were news fx analyst. Oliver this page is not need any lipstick. G pipep rejecting a takeover big. Oliver you are watching bloomberg markets. Scarlet i am scarlet fu. Rejected ant one takeover offer from itv that value the business at one billion pounds or 1. 3 billion. , it also let us talk to a manager of Livermore Partners. He is advocating that Entertainment One strengthen its board. s price the only obstacle here to a deal with itv . Good afternoon. I believe so. I believe price would be the only thing that is standing in the way here. Bid todaygiven the that is out there by itv. Scarlet you have had your steak and you have seen the stock go from just below 200 last week. Ofwant to a 10 month high 244. What kind of Crisis Management do you think it should get . David when we spoke to and you and i have spoken about this in the past several months, when the stock was going down to 160 pence a share, livermore looked at this as a very opportunistic valuebased opportunity. We took the state and have dialogue with management. Did not like the feedback we were receiving from them in terms of what the vision was and how to rewrite the equity. We of course thats a letter to the board and began further dialogue with them, pressing them to pull back on acquisition theme and pressing them to focus more on Free Cash Flow generation and building that credibility and shareholder value. It is been eight months and there has been overtures and rumors in the past. We finally see all that coming to light with this bid by itv. We feel that the shares are still undervalued. I do feel that itv would be a Strong Partner and steward of the assets. I do like their ceo and feel that the right valuation would make this deal work well. Does so david, what the new Company Look Like if the deal comes back and it goes through this time . I sort of envision the synergy of these copies working out Going Forward. David there are several different synergies. Going back to my conversations in the past, even with scarlet, i keep saying that content is king in the space. Entertainment one has some very valuable content, both on the pig aside with peppa well as some of the other scripted dramas. It do you levers itv away from an advertisingbased model into more of a contentbased. I think that is where there is great demand and Entertainment One is wellpositioned for that. It makes great sense. Scarlet following on your idea that content is king, Entertainment One acquired pig last september and they made three acquisitions in 2016. I know youre concerned about the pace of dealmaking for this company. Has a drop in the pound made it so that purchases are kind of out of the reach . David i would not look at the pound per se. Most of the sales, outside of britain. That is actually a very check the thing for a suitor. My issue along with entertainment want since we have involved has been the equitation acquisition case has been very strong. They have increased their debt profile and not producing Free Cash Flow unlike other Media Companies out there today. The issue with that is that Shareholder Equity has not risen. Been flat at that 150 pence where we acquired that state. The shares are valued at 240 pence and it looks like a great game. In reality, there is much more value assigned to the business i feel. I think a better steward of the assets again would make a lot of sense given the steps of the managements past. Scarlet i pulled up the wrong ticket. That is if youre looking at the function here on bloomberg. Oliver there are a few major shareholders in this company. Can you give us sort of an inside look at what is happening among the shareholders . We are talking with you, but theres a few other large shareholders. Scarlet a pension plan among them. Oliver theres 911 stakes in the company. What exactly is going to be the offer from speaking with your peers that would make this thing a go . David we have received a barrage of calls from holders just in the past several months as weve been a lot more public and terms of what we feel the proper Strategic Direction is of this company to remade it back to a normalized valuation. In that process, we have had discussions with the management and the board of Entertainment One and even the cpt, which is a very Strong Shareholder for this company. They are the largest shareholder, i believe. Therefore, there is always the potential for a deal to get blocked by one of the larger holders. Our view at livermore has always been that just because whether or 10n one share million shares, you are shareholder in the company and you should have a voice. If heard a lot from the minority voices in the past about how the company has been managed and why the shares are trading so low. We took the opportunity for ourselves and acquired the stake and we are happy to see the shares are rerating and it is getting validated by the offer. We feel a higher valuation is needed for a deal, but we would be happy to move forward. Oliver you are trailing the 12 month pe levels around 27. The valuation you want to see normalized is lower at about 13. Is the Growth Outlook at Entertainment OneStrong Enough to warn valuation that is getting closer to the 20 range or what . David i think it is a combination of factors. I think of a company that theres definitely some synergies there from an acquirer taking on this business and i think the film library itself holds tremendous value to anyone. Their assets here to acquire as well as the operating cash flow potential of a business, especially when you do take into account the synergies. They have over 40,000 film and television titles. They have a bunch of hours of television programming. This is a very diverse and deep asset base. Therefore, its very attractive to someone not only like itv but also many other players out there today searching for content. David, they quickly, you had a short position on the valiant pharmaceuticals, but you covered it quickly. What are you moving on to . What are you using the cash for . David our letter came out a week ago and that is correct. Position. Rred our on the long side, were looking at the feeding ground for some undervalued assets. On the short side, we are looking at specific things like retailers like urban outfitters, which i believe we describe on the show. Theses not laid out our on it, but we think there is a potential to the downside. Scarlet david neuhauser, thank you so much for joining us and giving us your thoughts. David neuhausers of Livermore Partners joining us by phone from chicago. We will have more coverage of the markets, little changed. This is bloomberg. Scarlet this is bloomberg markets. Im scarlet fu. Oliver i am all of the renick. It look at the biggest business stories in the news right now. The preppy fashion brand ralph lauren posted earnings that beat estimates. The new ceo is trying to turn around the company by Closing Stores and cutting 1000 jobs and hiring new executives. Ralph lauren profits have fallen for the last two years. Scarlet fewer u. S. Housing markets are seeing doubledigit gains and prices. The National Association of realtors says prices rose 10 more in metropolitan areas in the Second Quarter. That is down from 28 in the First Quarter and 34 in the Second Quarter of 2013. Oliver apple is planning the first overhaul of its macbook pro laptop and more than four years. That is according to people familiar with the matter. They hope to boost sales after two quarters of decline. The updated notebooks will be thinner and have a powerful graphic processor for videogame is let me. Rs like me. Scarlet one of the big stories were looking at today is what happened with the bank of englands reverse auction . As part of buy gilts its expanded program, but it ran into problems. Resting bonds. Oliver what is happening is i want to put up a very basic chart. Here is what the yield is looking like a cross the u. K. Right now. Youre looking at the purple line at the bottom there. It is the 2year note. Post brexit how much more demand there has been for the shorterterm bonds. Looking at the twoyear and tenure down quite a bit since then. Scarlet we will be covering this later this hour. This is bloomberg could. Bloombergve from World Headquarters. I am oliver. I am scarlet fu. Blessed be headlines. Mark crumpton has more. Mark Delta Airlines says operations should be back to normal by midtolate afternoon, but the carrier is experiencing or expecting to cancel more than 150 flights today. Delta struggles to cover from mondays computer crash that cost more than a 200 flights to be struck. Says delta has spent hundreds and millions of dollars to avoid such failures. A Justice Department report out says Baltimore Police officers routinely discriminate against blacks and repeatedly used Excessive Force and are not adequately held accountable for misconduct. Problems in baltimore did not happen overnight or appear in a day. The pattern of practice that we found results from longstanding systemic deficiencies in the bpd. Mark mark the report also says officers make large numbers of stops, mostly in poor black neighborhoods and unlawfully arrested citizens for speech deemed to suspect both. In germany, Angela Merkels government wants tighter security after a rash of attacks last month. Among the proposals, faster deportation procedures for Asy