N update looking at the major averages, we are down for the s p. At four. 4 . Lets look at how the agencies have performed for the month. Session, abe its 38 1 move. Down insee the dow is the s p is down and the nasdaq is up. 8 in august. Lets move to oil and we can see a reversal. Right now, oil is trading at or before and 71 is down 3. 5 today. It began the month with its worst day. Talk about symmetry there. 3. 7 , stillown trading below 45 per barrel. Oil is up 7 and it is the first monthly gain in the last three months. Exxon is down about 1 and chevron is down about 1 . Given the move in oil. A look at some stocks on the move. Going tosaid it was stop or at least try to stop any are Merger Acquisition they thinking of doing with monsanto. Both stocks are down today. We will move to the first word news. Mark crumpton has that from our newsroom in new york. Mark thank you. Donald trump has landed in mexico city and the flight touch down a few minutes ago. With theeduled to meet mexican president , at the official residence of the mexican president. Comes as a surprise. The u. S. State Department Says only this secret service was aware of the planning. Arizonamp flies to where he will lay out his plan on immigration. Supporters and brazil have been told we will return. But voted 6122 mph legislators decided not to ban her from seeking Public Office in the future. Of using accounting tricks to hide the signs of a budget deficit, a charge she denies. In response to the vote, a tweet was sent out earlier which read today is the day 61 men, many corrupt, through 64 million brazilian votes in the garbage. Confidenceer of parliament to form a new government. More than half the legislature voted against. Trying to piece together the First Administration since spain passes traditional twoparty system broke down in of in december. The National Hurricane center said Tropical Storm estelle can shape in the gulf of mexico. The storm has sustained winds of 40 miles an hour, about 450 miles west southwest of florida. She should turn more to the northeast with increasing speed on a track that would approach the northwest florida coast on thursday afternoon. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. Back to you in washington. David thank you. Lets get back to the markets, s p 500 wiping out gains to end a fivemonth winning streak. Joining now is the chief Market Strategist asset manager where he over the is it hundred 47 billion and asked its. Energy, we have the data showing stockpiles grew, vonnie is highlighting their stock prices falling a bit. To what extent are you concerned about Energy Policies role . Question not very concerned. It is a good question. Even off to the lows when we were in the high 20s, our view was supply would equate with demand probably in 2017, maybe late 2017. Wouldpectation was oil write its way back where our terminal is spirit we do not spend a lot of time worrying about a few dollars up or down. And normalized 6060 five dollars barrel. I wonder what that means for your attitude and your sense of emerging markets . Do you see much value in emerging markets right now . We do see some value i would say have the end of last year we were a bit more bullish. Thought fundamentals were bottoming, but we thought valuations were impelling as well. Most factors leading to the underperformance of the emerging market index is the spillover relatedinto other economies, commodity collapse and the dollar funding crisis. Those look priced in. We liked the emerging markets at the beginning of the year. You mentioned brazilian stock market up, skyrocketing this year. We still like emerging markets. We do not think the entry point is quite as good as five or six ago. In the long run, we think it is a good place to be. Vonnie your team focuses on assessing Capital Markets trends in particular. What are the trends that are most concerning to you . I think the most about is what is the effect of the u. S. Election . Right now, there is a lot of certainty. T a lot of a lot of people are trying to handicap the election in terms of what it means for portfolios. In little too early to do that. A lot of voters will not decide until they come back here and we have not had the first debate yet. There could be surprises in september and october and we do not know what the down ballot effects are. Were thinking a lot about the election but not losing any leap over it. The other thing we think a lot about his china, not just the growth rate but the discussion of how much debt they are racking up. Much they arehow accruing to support that growth rate. That is what we hear quite a bit from clients. How much should we still be worried about it . Those seem to be things we hear from clients. Lets talk about something we do not know whether it is shortterm or longterm. The Federal Reserve. We heard from the Capital Fund Manager bill gross, who urged the fed to raise rates after a september meeting and beyond. As a listen. Lets raise Interest Rates, and six to nine months from now, lets do it again. Capitalism cannot really do well. It can survive but not do well rate so wenterest are negative Interest Rate. Vonnie he is clearly frustrated. Still inking there is value to be had. What do you do at this point when it comes to investing in terms of Interest Rates . You have to be careful with Interest Rate risk. All the time, with what direction we think Interest Rates are going in, the fundamentals, Interest Rates should rise and the Global Economy should start to improve, inflation pressures may begin to pick up but we do not think Interest Rates will go up much. We think they should but we do not think they will go up much. Held down by Central Banks and other artificial stimulants. Not because iit think it is up so much but the durations and portfolios are very long and the global aggregate bond index has a duration so even if you think rates will not go up very much, the pain associated with a small increase in Interest Rate is pretty significant. I do not worry about the likelihood of higher rates but the severity. I think you have to think in terms of both when you measure Interest Rate interest risk. A couple of months after that happened, you said it was good for investors to set a true risk tolerance. What is your sense of where thats are headed after vote . The smartest thing they probably did was not rushing into the article 50 process. I think what they did was a dangerous move with a lot of uncertainty. They did not need to compound that and start the withdrawal process. A main reason why most of the markets other than sterling have gone significantly is the delaying of article 50 and stretching out the runway for how the u. K. Will deal with it. That has allowed cooler heads to run,il and in the long there will be significant trouble. Not rushing into anything. Thanks. Our david coming up next, more turmoil out of south africa. The companyss biggest tribe private debt manager stop lending to private companies. We will learn why with eric cantor. This is bloomberg. This is Bloomberg Markets p or im in new york. David im in washington dc. Investment in an effort to compete with entrepreneurs. Wouldillion in 18 months be eligible to live in india for 10 years. Create 20 jobs for residents each year. Soon sold at toys r us, a major expansion. Currently, on its website, they will be available at all u. S. Toys r us Stores Beginning next month. That is your business flash update. Thanks. A weakest level against the u. S. Dollar and more than seven weeks. The biggest private fixed income money manager future growth Asset Management saying it has stopped lending billions in the largest staterun companies. Mark barton and i talked exclusively about us yet to a cio about why. We realized we could not make decisions. How other Asset Managers can make different investment decisions. Barely meetngaging as Asset Managers and we will try to make it easy to answer questions. We will send Group Letters to answer as a group and answer as a group. All this takes place as and agenciestinues have no doubt no doubt that there are on what is happening to enterprises. Companys are being managed. Do you fear south africa the will loose its investmentgrade Credit Rating for whatever reason . Of course i do and it is important to contextualize this. They are the critical delivery mechanism for power or water or agricultural and industrial development. We have no desire to make the decision. South africa will be downgraded below the investmentgrade and that is a bad thing. It is manageable. You could get the right place at the agencies have to get i am an asset manager and i did not do policies. We do not know which stories are true and false. We can assess the companies we lend money to and make appropriate decisions for our clients, which we have to answer for. Vonnie how will this affect your business . Weaker versus the u. S. Dollar, 10 this time last year. We are an investor so in a inflation,s bad for higher bond yields, which we have seen today, that is something we watched closely. It improved sharply and you reduction ofir Interest Rates. We badly need to avoid the downgrade. We have substantial exposure to them. Be market toly to market losses. That is a reality we have to deal with. Supports a sustainable framework on a five to 10 to 20 year view. Mark give us the idea of a selloff we might see if gordon loses his job. That is a big question. The who and the how and the when. We saw what happened in december , unexpectedly by an unknown party to us. It depends on the who and the how. Domestic and International Investor very bad, and where the money sits in the powers its coming would not play well at all. It would be a substantial selloff. In december 200 basis points in two days and we have not seen that kind of move since mid1990s. Longduration bonds, it hurts. That was earlier today from cape town, south africa. David still ahead, our trade of the day, 28 so far this year. This is bloomberg. Frome david joins me chicago. Aboute talking earlier how it has been a little bit quiet since the month of august. David if you are selling premium coming or doing alright but the volatility has not been their head of any of these traits. Been there ahead of these traits trades. Vonnie maybe it is time to change strategies to tomorrow . David what were looking at now is you have got a little bit of data coming in the form of payrolls on monday and another quiet week in terms of the Labor Day Holiday and after that, another week and then we will have the ethel lance the meeting. We hope we will get a little volatility there because ahead of this, if you look at fridays to 1492, we213 traded within that range all week so i think you have got to look a little further out to finally get some of the volatility back in the market. Vonnie it seems like there was a time when we could not get too much of it really. Moved. 500 has not talk to us about your trade . A proxy for gopro, anything that happened with gopro would come on down because they supply the chips for those gopro cameras. Everyone thought it would be like the truman show and they just massed produced this and it turned out they oversupplied the market so they had to take a back seat and were not making any more gopros. Comings like this is back in production for the next quarter. That is where they will really set up and finally start supplying them again so what im thinking here is it is not up at 140 when it was more but it has come pretty test here over the course of the last months but im still bullish on this not just for here after the close tomorrow, but im thinking more next quarter, 70 to call spread here for september after the earnings report, and it will cost they one book 40 with one book 60 on the cost side. And you will see a result on that one. What about further out when we look at Federal Reserve interestrate increases and when they potentially come . Could that give operators something to do . Absolutely fear were pricing at about 15 of earnings hike prior to lasts payroll and now were looking at 27 chance of a rate hike here in september. That is a worry here in the market. If you look at bonds at the 10 year, here on the next we have not seen a huge spike. Chance, there could potentially be a 20 chance in september. There are plenty of people in the background so you are obviously keeping busy. Thank you. David, you have a big interview coming up for us in d. C. In a little less than an hour. Speak with the secretary of treasury for International Affairs in a few p. M. Test 4 00 15 4 15 p. M. Eastern time. This is bloomberg. Matt you are watching Bloomberg Markets. I am matt miller. Out the headlines on bloombergs wrestler news. For that, we go to Mark Crumpton in the newsroom. Mark uk Prime Minister theresa mays cabinet today concluded there is no no need to hold a vote before starting the process theolding britain out of european union. They risk alienating opposition parties. They believe lawmakers should cast votes before our 50th yous treaty. In venezuela, put opposition will try to sweep the suite strays tomorrow with the biggest margin years. They are put to death pushing for a referendum. He is wildly unpopular and the economy is suffering through triple digit inflation. Theyre planning a counter demonstration. The first commercial flight between the United States and cuba in more than a half a century landed today. Jetblue flight 387 from florida to santa clara marks a new era in travel. Bankscarolinas outer have been spared from a Tropical Storm ivette has been moving toward distaste for two days. The National Weather service says the system is moving away and the strongest winds were 30 miles an hour. News 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Back to you. Market close in under 30 minutes. Lets go live with abigail doolittle. Applico modestly, slightly lower today but the nasdaq is trading higher by more than. 8 . U. S. Equity averages finishing higher at least at this time and if the nasdaq has managed to pull this off, it will be the second up month for the nasdaq in a row and the longest month joining streak since last year. Most. Has helped the this reflects about 7 . The stock was up about 2 . Because of that, some of the from thedoes reflect companys better than expected june report reported in which i. Launch the will iphone 7 in late july. The Company Launched will launch the iphone seven. They may be partnering up with may have bought a cable company, good stuff on on here but when we look at the monthly chart i looking at dtv 3214,looking we e selling pressure, the downtrend is still in effect. This is important because we look back at 2013, stocks in a big way on margin issues, it took quite a bit of time to overcome the selling pressure. It is important to see whether or not this stock could in fact break out of the range to climb higher. Any big stories for the month on nasdaq stocks . There is indeed. Percentageworst performers for the nasdaq, down more than 10 in the month of august, all around the tennis hillary clintontis rate did raise and a brewer. , which seek she said was outrageous. Some politicians did say this was pr the company is also going to offer a generic version. We had the biotech index right now on pace to close down 2. 5 for the month of august. Snapping its went for the month of july, as some investors may fear there is more selling pressure ahead, per Hillary Clintons to the last august around concerns around Health Care Prices that set the sector into a bear market that even continues right now. Thank you. Joe International Monetary policy spillovers have been the subject of much economic debate. Are they positive or negative and how much impact to they have . Our senior economist recently attempted to quantify those effects in a note saying travel abroad. Eurozone, the largest effects on u. S. Rates. Thank you for joining us. The world is totally transfixed by the neverending declining , barring a little bit of noise. Your Research Says unconventional easing abroad in the eurozone, u. K. , boj, has a significant effect on pulling u. S. Rates. Why is that . From an investor standpoint, these are all substitute, not a perfect substitute, but returns look similar. If you move forward, you can treat these markets as substitutable. One market, that will have an effect on demand for another market. It is not want to one but there is a significant degree between the two. If rates are lower in my home country than they are in yours, i might think about buying your debt to get the higher yield and then that drives down rates. That is right. The church is they are not exactly apples to apples. Some arts nominated in euros and some are in dollars and you need to account for currency risk and for volatility. To account for all of these factors and quantify what these might be and they came out with large numbers, two thirds of decline and rates since and of 2013. Explained by Global Factors alone. You say central bank easing can account for 100 basis points of reduction since the end of 2013. We talk a lot about j