Sales happening. Now with this new number, this is where we stand this is where we stood. About new number, 650,000, you can see that has not been hit since the Third Quarter of 2007. They gangbusters number in terms of new home sales. A pop in terms of percentage, 12. 4 . Out as that develops and how that affects the markets. Meantime, lets see how the markets are doing in terms of our majors. The dow and s p and nasdaq are up on the order of about half a percent. For today, investors are a little doubtful on whether a rate rise will happen, so they are pushing back into equities. Stanley fischer on sunday may on thewkish comments u. S. Economy. Take a look at this other chart i have. Generally speaking, we are in the dog days of summer, but along with fed speak on rates, we have some investor hesitation. Basically what you are seeing is the s p has had absolutely no one present moves to the upside or downside in the past 31 days. Investor doubt that any rate hike will happen in the next three months. Lets see what is happening with the bloomberg dollar spot index. Excuse me, we are going to best buy earnings. Up by 15. 5 . It beat earnings as well as sales in the second quarter. Samestore sales were up by. 8 , compared to expectations of. 6 . Wearable technology a part of that. Fitbit gets about 12 of its revenue from best buy sales. Gopro gets about 4. 6 . Whirlpool also seeing a pop of 1. 5 . We are 90 minutes away from the close of equity trading in europe. Lets have a look at where the equities are right now. Stoxx 600 up by more than 1 , up by 1. 1 . Seeing strong and broadbased gains after the equity benchmark ended the trading day pretty flat yesterday. Let me show you have various Industry Groups are performing. Green across the board. All 19 Industry Groups rising. At the moment, we are seeing financials in the lead followed by materials, which includes those metals and mining companies. They were the worst performers yesterday, dragging down the benchmark. Today, they are some of the best. Iron ore in china jumping to a twoweek high. Also getting a lift to equities, we have that eurozone pmi data. The composite showing its strongest expansion in seven better thanng in the 50 mark, which would signal expansion. Let me show you the bond markets, this is the italygermany 10year spread. Basically, that is widening for a third day, the highest in two weeks. It is about the political turmoil surrounding Prime Minister renzi weighing on italian bonds versus german bunds. Homebuilders giving a lift to the ftse 100. The uks biggest homebuilder by value climbed to the highest level since brexit. This is the stock price this year, drop post brexit. Now climbing as much as 4. 6 after they said firsthalf profit increased and reservations rose sharply last month. David getting back to the breaking Economic Data before that, i want to get a check on the first word headlines. President obama gets a firsthand look at record flooding that swamped parts of louisiana. The president s trip comes four days after donald trump criticized him for staying on vacation during the disaster, but the louisiana governor said the president should not visit until after the first few days of recovery efforts. The blood has damaged an estimated 40,000 homes. Tropical storm gaston is growing stronger as it moves over the eastern atlantic ocean. The storms sustained winds increased to 50 miles per hour. Additional strengthening is forecast. Gaston is expected to become a hurricane by tomorrow. The European Union will not bend its rules to allow the london financial district preserve its access to the european Financial Markets once it leaves the block, according to a german lawmaker. He spoke with bloomberg today. The bank is willing to operate in europe and has to stay in the eu, not in england. That means some of the banks, like american banks, will have to move their headquarters from london to maybe frankfurt or dublin. Prime minister theresa may is fighting to keep their rights. Returnsh have started to home now that the nations economy have gotten better. Almost 80,000 people moved to ireland in the year ending in april, a 14 increase. The number of people leaving fell 6 . Payrolls were up 3 in the second quarter. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. Getting back to the breaking Economic Data, purchases of u. S. Homes jumped to the highest level in almost nine years. I want to bring in one of our. Op Economic Forecasters ryan, we mention these figures. 580,000ey was for houses. We got 654,000, expect in a decline in new home sales but instead of 12. 4 . What is your reaction to all of this . I think it is very encouraging news on the housing front. Its important to keep in mind new home sales are very volatile from month to month, so they are fairly unreliable. We do not want to get too high or low on one month of data. But the trend is strong. Sales are up more than double digits on a year ago basis. It is further evidence that the Housing Market continues to strengthen. That further evidence things are continuing at pace, or were there something to peng shuai the spike that we saw . Nothing that we can pinpoint that we can suggest that would support such a large increase in new home sales month to month. I would chalk it up to a lot of volatility in a new home sales numbers. Typically the numbers are sensitive to weather, which was not a factor. Fundamentals overall support stronger newhome sales, but a jump of this magnitude is a little surprising. The most important thing Going Forward is winning this number to stick. It is an important benchmark. Prehousing bubble, newhome sales averaged about 650,000. Now we are back to historical norms and we need to build on this momentum Going Forward. Looking at your Research Note where you say the u. S. Economy is falling short of expectations this quarter. You also say, talking about the feds shadow rate, that Monetary Policy is less supportive than it appears. Does that mean you are not expecting any kind of hike from year Third Quarter is shaping a little weaker than we expected. Year ahead of the speech and jackson hole . The official forecast was for about 3 gdp growth. Our current model has a tracking at 2. 3 . I dont think it will change a lot following todays numbers. I dont think we will get a ton of a boost to gdp because of that. The Third Quarter is shaping up to be fairly solid. Not as strong as we had hoped, but the conditions are falling in place for the fed to raise rates at least once this year, likely in december. I think they want to be cautious. The Economic Risks are diminishing, but there are still risks not associated with the Economic Data, primarily keeping. Nterest rates at zero typically, they want to be very cautious in raising rates. You a bitant to probe more on what you have been talking about with Monetary Policy being less supportive than it appears, what that actually means beyond this year . The attention has been on one rate hike that the fed did in december of 2015, but when you look at the shadow fed funds the rate fordjusts quantitative easing, forward guidance, that rate is not constrained by the zero lower bound. That has increased more than 300 basis points. That would suggest Monetary Policy is not as accommodated as people anticipate. We have seen some officials highlight that point in recent speeches. Monetary policy is not overly accommodative. That is why, Going Forward, they want to raise the rate in line with the short run equilibrium rate. They do not want to be too restrictive too soon. David returning to the housing numbers we got, you noted these are subject to revisions. Put this into some context. Housing has been such a bright spot in the economy for so long. How important is it to get a number like this, how important is housing today as we look at the recovery of the economy . Important. Our economy does well when housing does well. A lot of the attention has been on the age of the expansion, seven years give or take. Usually, housing contribute early on in an economic expansion. We did not get that this time. Housing will contribute most in the latter phases. I think housing will provide a crucial element to that. David thank you, ryan. We appreciate that. Joining us from westchester, pennsylvania. Dont miss our interview with the ceo of Toll Brothers coming up at 1 00. Move closernsanto to a major deal but hurdles remain in the way. This is bloomberg. Nejra live from london, im nejra cehic. David im david gura. Shares of best buy of at least 16 after secondquarter earnings beat estimates. Electronics retailer was helped by rising sales of electronics, home theater, and wearable technology. The ceo has been trying to turn around the chain after years of sluggish growth. At t has reached a deal for enhanced roaming and other services for customers visiting the island of cuba. Agreement for an visitors to cuba to receive and send Text Messages and phone calls. That is the Bloomberg Business flash. And monsanto are said to be making progress toward a deal in the coming weeks. An agreement would end months of back and forth between the companies beginning with bayers initial offer. For the latest, lets bring in jeff mccracken. Jeff and his team were actually first to report on talks advancing between bayer and monsanto. Give us the latest. . Hen can we expect a deal one person we spoke to said that they could see a deal soon but we expect or after labor day. Ceos, hugh grant, and mr. , have been meeting and they had good conversations about the price of the offer, which at this point is around 125 a share. Obviously, that will have to go higher, maybe 135, to get the deal across the goal line. The other thing is the termination fee. Monsanto has said the 1. 5 termination fee offered by bayer is not enough. That is because there is a big , to block regulators a deal if a deal were announced. Other sticking points around the price, or are there other issues around the rationale of the deal . The ceo at monsanto has only himself to blame for becoming a target. Last year, he went after syngenta. He spent a lot of time talking about the strategic rationale of getting a really big Agricultural Chemical Companies coming together. Now he is the target. No one disputes this company would be stronger and bigger and probably better if it were combined. Alsossues are price, but what assets, what divestitures will be required by regulators. Questions,curity especially when you have a foreign buyer like bayer. Yesterday, cam china received its blessing to take over syngenta. What would the antitrust landscape look like for these companies . Jeff monsanto had been holding out hope for weeks, maybe months, since this began, that perhaps the deal would fall apart, it would get blocked. ,hat happened yesterday monsanto now knows syngenta is gone, they will not be able to make a third run at trying to buy the company. In terms of issues that come up, National Issues will be raised. You have bayer buying a company that provides seeds and chemicals. That will be the focus, any National Security issues. Focused ony are more Technology Companies or a defense company, somebody providing products to the government, business to military contractors. You look at agro business, attracting a lot of popular interest. Some are saying this is a merger from hell. How much of that political noise is potentially going to delay things . I think there could be jeff i think there could be pushed back from regulators. Whether after margaret below or anyone else is upset does not really matter. As tinkering or messing around with their food supply, the vegetables, the food grown on the farm. Their reputation is not great, but this is not been going to buy a urine company like whitsun gentile. This is more about what kind of market consolidation is going on with bayer and monsanto. There is a lot of big consolidation plays going on in this base right now. David jeff mccracken, thank you. Still ahead, the recent rally in prices which saw oil into a bull. Arket was not enough this is bloomberg. Nejra live from london, im nejra cehic. David im david gura. The Worlds Largest oil you have surged 8 last week. It surged 300 million in outflows. Lets go to ramy inocencio. Balchunas overic at our Princeton Office to talk about these etfs. ,ast week, we saw this search 8 or so on speculation that opec may freeze construction. Today we are seeing oil down two days in a row, its worst two days in the last three weeks. Out when thecome price of the etf comes up . Eric this is used to play again, not make an investment. Flows. Fs track here they are not people are calling upon him, calling a top, taking profits, a shortterm trading tool. Why this should be use as a shortterm trading tool this year, year to date, oil spot is up 20 . This etf is of zero. On the shortterm it does well, but over the longterm it corrodes. That is why this should be looked at as a derivative or futures position, not a normal etf. So why would anyone want to use this etf when the return is zero . Eric if you are looking at shortterm sensitivity to the spot, it does a good job. This has a 96 correlation to spot on a daily basis. Tracks Energy Stocks and has only a 68 correlation. Unless you are willing to store oil in your backyard, which i suggest against, this is the fastest way to do it and this is also usually liquid. 350 million a day, any spread. That means you can get an out quickly. If you dont have access to the futures market or do not want to mess with it, this basically treat like an equity. Ramy who exactly is using this . Eric not that many big investors. Only 20 of holders are 13 f filers. Largely smaller shops, day traders. That is because they may not have the acumen to use futures. This is a godsend to be able to trade oil. It only turns over 10 a day, so that means there are some People Holding and buying it, and that means they will be learning the hard way. Ramy walk me through some other options out there . People do not like u. S. Open because it holds futures physically. Etn. Of people use oil people also do xle. Though do not have the funky business with derivatives and the role cost, but they will be less sensitive to oil, issues from the stock market in bedded in those. An interesting insight into oil etfs. I guess the takeaway is do not try this at home, unless you are an expert. David thank you. Up next, Hillary Clintons state Department Email controversy continues to hang over her campaign as the fbi discovers 15,000 new documents. To unveil a new tax proposal today affecting Small Businesses. We will speak to neera tanden, the president of the center for American Progress. This is bloomberg. David live from bloomberg World Headquarters in new york, im david gura. Nejra im nejra cehic. You are watching bloomberg markets. Lets get a check on the first word news with emma chandra. Emma an american soldier has been killed and another wounded during an operation in the southern helmand province. Six african soldiers were also hurt. The attack comes a day after 100 u. S. Troops were sent to the region to help Afghan Forces trying to rein in the taliban. Merkel says the European Union needs to show it can prosper without the u. K. She met with french president francois lond and italian Prime MinisterAntonio Renzi on an Aircraft Carrier yesterday. Leaders are trying to come in with a vision of the post brexit block. A study finds the way to between men and women increases after childbirth. Fiscal study for says that is because mothers reduce their hours and miss out on pay raises. The study says women in the u. K. Are paid about 18 less than men. Two decades ago, the pay cap was 20 . A destructive while far continues to grow as it threatens homes along the california coast. 2400 people are under evacuation orders. 5800laze has turned about san thenhalese ways of the spoke county. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. The controversy surrounding Hillary Clintons emails continues. The fbi discovered 15,000 new emails in their investigation and a judges order and the state department to review them for possible release. Last night on late night television, she shrugged off the issue. My emails are so boring, i am embarrassed about that. We have already released 30,000plus. What is a few more . This comes as her campaign plans to unveil a new tax proposal that would apply to Small Businesses. Neera tanden of the center for American Progress is with us. Bernie sanders said memorably, enough with those dan emails. She can laugh about it alongside jimmy kimmel, but this is something that parts of the American Public is concerned with. How does she move on from this . Way think she moves on the that she has during the campaign which is to answer all the western there are about these emails. If you actually look at Public People polls, 60 of think they have heard too much about the emails already. This is just part of the drumbeat. I think people are really ac