Julie stocks keep wavering between gains and losses. The nasdaq the only three of the major averages that is relatively consistently up today and still trading at a record. We are seeing a tight trading range once again. We are seeing the vix continued to trade at low levels. E will hear from Oliver Renick if you take a look at the bloomberg for a chart we are watching, we did get Industrial Production beating estimates, but both Building Permits and new Home Construction coming in below estimates. Which u. S. Economic data is beating estimates, it is trending lower. Even as the stock market is maintaining if not taking considerable legs higher. The correlation between the two has been breaking down. Afterentury fox declining Berkshire Hathaway revealed that it eliminated investment in that company. Disney down 1 . Reportedly, hackers have said they have access to one of the companys upcoming releases and will release pieces of it slowly i unless disney pays a ransom. Were looking at the latest acquisition by walgreens. Mans as issued the this might be a sign that they are not ready to approve a deal. They were going to sell some of its locations to freds. Scarlet thank you so much. Julia sean spicer on camera briefing with reporters today. Instead, he will hold it offcamera. Mcmasteruced h. R. During a separate his breathing. Mcmaster once again asserted that President Trump didnt jeopardize u. S. National security by sharing intelligence with Russian Diplomats. What the president discussed with the foreign was wholly appropriate to that conversation and is consistent with the routine sharing of information between the president and any leaders with whom hes engaged. [indiscernible] im not going to be the one to confirm that sort of information. That could jeopardize our security. Julia joining us from the white house is Kevin Cirilli. Ande up from our bc come up from our d. C. Bureau, robert. He wanted less drama from this administration. No shortage of that it seems today. Kevin theres a tizzy of turmoil here at 6000 pennsylvania avenue. The drama and fallout continues to engulf this administration. Clearly, h. R. Mcmaster doubling down, standing behind what sean trying to showcase different avenues of the administration. Journal mcmaster saying the administration did nothing wrong in general mcmaster saying the administration did nothing wrong. Quite frankly, they are facing questions not just from democrats, but from republicans were increasingly concerned that this will hurt their chances of passing a conservative but a slave agenda. Legislative agenda. Pompeo youve got mike who will be Briefing Members of the House Intelligence Committee later tonight. They reached out to the white house. This threatens to overshadow the other items on the white houses agenda. Talk about how this will dominate the airwaves for the next couple of days. This. All the air out of washington until more questions are answered here. This will suck all the air out of washington. President trump didnt even know where the intelligence came from. That opens up a whole new line of questioning. Its a real can of worms that will continue to fester and distract from everything else. Julia the you think this does pose a risk to information sharing between the United States and their partners . This is something the Washington Post alluded to. The report from the New York Times says it was israel who provided information. Do you think this is going to pose a challenge for President TrumpGoing Forward . That he is seen as untrustworthy . Concerns definitely among our allies, particularly when it comes to National Security, that the white house is undisciplined. They are not handling things well, there isnt proper processes in place. That will give the allies some pause in dealing with the United States government. Scarlet we also have President Trump meeting with president her to want today turkish president erdogan today. Kevin these meetings are getting lost in the shuffle. They spoke primarily about National Security. Headednt trump will be to several stops, including israel. It will be interesting to see what Benjamin Netanyahu has to say. Conversations getting overshadowed by the bevy of controversy pouring out of this white house. Julia the National Security adviser did say everything that was shared was wholly appropriate. He also said just a there was a leak within the administration. What does that mean for this government . Kevin that leak could put National Security interests at risk. Thats what the administration now has to grapple with. Who is the source of this leak . It does raise significant concern about people, toplevel officials having concerns about how President Trump interpreting highly classified information. Theres mounting pressure on just who exactly President Trump will look to appoint to replace james comey. Just moments ago, senator john cornyn putting out a statement saying he is not interested in the job. He was a top contender. Julia thank you for bringing us up to speed on that story, too. Also, robert levinson. Thank you. Lets check on the first word news this afternoon. Mark Senate Democratic leader Chuck Schumer wants the white house to release transcripts from President Trumps meeting with Sergey Lavrov during which confidential information was reportedly shared. Is the only way for the administration to categorically prove the report untrue. If this report is indeed untrue, it means the president may have badly damaged our National Security. Until a transcript is turned over, the public will doubt whether the president can handle our nations most closely kept secrets while the interview process continues to replace james comey, Mitch Mcconnell has offered his recommendation on who he believes should be the next fbi director. He spoke to commence really early this morning. Sen. Mcconnell i recommended Merrick Garland may surprise people. He was a prosecutor in your on the city bombing case. In the Oklahoma City bombing case. Continue thel tradition of the fbi of having and a political professional. Apolitical professional. Mark a long friend of garland says the judge is happy on the bench and has no interest in leading the fbi. Theres a blame game going on over that global cyber attack. Microsoft points the finger at the National Security agency. Hackers used a technique stolen from the nsa to target Microsofts Windows operating system. Theirompanies owe customers and reliable process for fixing security flaws. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Scarlet thank you so much. Julia quite excited by the mention of james comey. Kevin took my question regarding a possible leak as people concerned within the administration about President Trumps handling of the situation. Julia every new scarlet every new administers and has to grapple with that. Administration has to grapple comingat carried with that. Coming up, Senate Majority leader Mitch Mcconnell once less drama from the white house. Julia interviews from the animal salt Conference Tomorrow annual salt Conference Tomorrow. From new york, this is bloomberg. Julia this is bloomberg markets. Im julia chatterley, with scarlet fu. Scarlet the republican agenda faces another obstacle. Earlier today, Kevin Cirilli spoke exclusively with Senate Majority leader Mitch Mcconnell about this latest white house controversy and more. Sen. Mcconnell i read Washington Post story and i read general mcmasters response, which tends to refute the story. But the story. We could deal with rebut the story. We could do with a little less drama from the white house so we can focus on our agenda. Tax reform and repealing and replacing obamacare. Kevin i want to talk about that. A lot of attention on who the president will select to nominate to replace james comey. Have you spoken with the president about this . Sen. Mcconnell i have. I recommended Merrick Garland. May surprise people, but he has a deep background in criminal law he was a prosecutor in the Oklahoma City bombing case. President trump will continue the tradition at the fbi of having an apolitical professional. Needs do you think he democratic support . Sen. Mcconnell it would be good to have democratic support. If he picks someone with a deep background in Law Enforcement who has no history of political involvement, a genuine expert garlands neck sample of that. Thats garland is garland is an example of that. Kevin i want to mention this tweet last week. President trump tweeting james comey better hope that there are no tapes of our conversations. Should that committee have access to those tapes if they do exist . Senator burr and senator warren are handling the Intelligence Committee investigation. They will decide what they need. In the meantime, for the rest of us, we need to concentrate on what comes next. We need to have a great choice for fbi director. I anticipate the president will do that and move on. How has all of the drama influenced you are ability to get across Health Care Reform . What is the update on that . Somebody republicans elected a Republican Controlled Congress to Fix Health Care so many republicans. Sen. Mcconnell the bill finally passed the house. It wont be any easier in the senate. Three days a week, we are in intense discussions with all the members of the senate. My goal is to get to at least 50 votes to repeal and replace obamacare. Those discussions are underway. We cannot take forever. The private Health Insurance market is collapsing. Insurers are pulling out of the markets. I dont think we have forever to address this. I will not put a strict timeline on it. People, theres nothing more personal than Health Insurance. Can you guarantee that whatever reform packages past that no one will lose coverage . Sen. Mcconnell what we know is what we have now is a disaster. The status quo is unacceptable. We need to do better than the status quo. Kevin another big issue is tax reform. This has to be revenue neutral. The president is proposing a massive tax cut. There could be tension. Is there tension . What is the timeline . Sen. Mcconnell we will have to be revenue neutral. We have a 21 trillion debt. We added an enormous amount of debt during the obama years. Reform wasme tax done it took several years. We certainly want to try to complete it does congress. And make america more competitive. Thats what its about. We didnt have one europe 3 growth during all of obama. One year of 3 growth. Kevin ive spoken with a lot of senators were against the border adjustment tax. Sen. Mcconnell it probably wouldnt pass the senate. The way we are trying to go theard is the secretary of treasury and this bigger and myself are trying to reach an agreement on a proposal that we can start with. It will start in the house. We have not reached that agreement yet. We will at some point. Border adjustability is a pretty controversial thing in the senate. We will see what is in the final thing we agree to. Kevin have you spoken to the president since last night . Sen. Mcconnell i speak with him frequent lee. Frequently. Kevin we hear of the need for regulatory reform, particularly doddfrank. Sen. Mcconnell we are doing a lot of regulatory reform. On obamae 14 repealers era regulations already. I would love to revisit doddfrank. Community bankers have taken a hit. Democrats dont seem to want to change it, even though all their Community Bankers are complaining about it. It would require some democratic involvement to achieve a statutory change in the senate. Kevin next week, the president is unveiling his budget proposal. Theres a lot looming in september, potentially even a government shutdown. What will you be looking for in the president s budget . Sen. Mcconnell we generally dont pay a lot of attention to the president s budget, but we share a lot of his priorities. Breaking out of the dollar for dollar when the democrats ran a dollar ofonth for defense spending increase, you had to have a dollar of domestic. Most of the president s priorities i share. There will have to be a bipartisan negotiation. Scarlet that was Mitch Mcconnell. Right now, you have sean spicer giving a briefing. It is offcamera. He says the Intelligence Leaks are dangerous and he cannot comment on the source of the intelligence. He said that they need to act quickly on health care to avoid a meltdown. This is bloomberg. Julia this is bloomberg markets. Im julia chatterley. Scarlet im scarlet fu. Even though the volatility index is at a historic low and we are talking about the vix come investors are still finding reasons to protect themselves from volatility. Oliver renick joins us with a couple of cards to explain what is going on. Theres a lot of stuff going on with volatility. Right now, it is the focal point of the market. As it pertains to money going into the part of the market you might think is not very active at the moment, its the u. S. And the minimum volatility etf. Etfow of funds into this that bases itself on finding low volatility stocks in the market. If the volatility is low, why do we want to do that . This is the flows into the etf. In, in, and. Their objective is to find low volatility. The market has not been very volatile. I want to point out the bottom panel. These of the correlations to the 10 year bond and the Bloomberg Barclays index and the actual vix index. Lots of reds and greens. They dont see a high vix. Theres a slightly stronger correlation to the Bloomberg Barclays index following bonds. When bonds to well, people are putting money into the index. If we look into the content of the etf, we can find out why. This is where we have the biggest difference from the s p 500. The Utilities Group is an 8. 5 rating. Health care almost a 20 rating. Are begs the question, investors using this as a bond proxy play for the rate story as opposed to the mix in general . Looking at whats been going on here flows, flows, flows. Thats the story here that is very interesting. Right now, a lot of it has been driven by whats happening in terms of investors still wanting that low rate play of utilities and real estate stocks and consumer staples. Right now, it is certainly not volatility driving whats happening here. Scarlet even with the Federal Reserve normalizing Interest Rates, people look for those interestrate sensitive stocks. Oliver thats exactly why we started looking at it. This is still very much the play, especially when so many sectors are trading at high valuations compared to their historical norms. Julia thanks, oliver. Still ahead, the commodities close. Stay with us. This is bloomberg. These days families want to be connected 24 7. Thats why at comcast, were always working to make our services more reliable. With technology that can update itself. And advanced Fiber Network infrastructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. Julia this is bloomberg markets. Im julia chatterley. Commodity markets are closing in new york. We begin with oil, falling today as we await the latest numbers on u. S. Supplies coming tomorrow. If opec extends output cuts until 2018, it would eliminate the global surplus that has kept crude prices in check for almost three years. This is the performinance of nyx crude. Will opec agree . Gold futures seeing the longest rally in four weeks as the dollar slumps on news of President Trumps disclosure of classified information to russia. Gold rising for the fifth straight day. Lets take a look at a chart you can see on the bloomberg at g 8589. 8589 g btv hedge funds cutting their bullish wagers on copper the lines on the bottom half show the falling price of copper. Signs a minute factoring slowdown in china manufacturing slowdown in china. Scarlet we will stick with commodities related news. Elliott management has come out with more demands for change the firm has called for a full or partial spinoff of oil assets. Bhps ceo defended his strategy, telling bloomberg that many sharehol