Eight. 2 causing loan growth to slow. Growth only half of what they had forecast in china. Different story in the u. K. Where it turns out more people are working. Unemployment falls to the lowest. We are at 6. 2 but 6. 4 is pretty good. Curious wrinkle, bank of england cuts the fourthquarter estimates for wage growth to 1. 2 versus 2. 5. Curious because unemployment is going down. Aim store here in the u. S. Same story here in the u. S. We will talk about the Stanley Fischer speech in stockholm that addresses better and if i met, better wages. Weaker pound sterling is what we got. What else cap go 7 00 weekly number jobless applications. Retail sales. Very big deal, not a big number. Looking for up. 2 . Business inventories. We call this ambiguity. About weird word segue. It is like debut. I digress. Princeton. Am feisty today dear and macys were poor before the bell. Will bed cisco. Interesting to see what John Chambers is doing. I was thinking macys would be interesting. I get a text message every other day from macys with 50 about it. That eatingnt is into the margins . That is the morning brief. Looking at equities, currencies and commodities. 1. 33. Ro sterling weaker as Governor Carney speaks. The fix is important. 14. 13 is a better than good lower number. The quiet story of the past 10 days. There is the german two point year. The german twoyear. Here is normal. Summerfor normal in the of 2014. Here is banks and here is the negative twoyear yield in germany. Notice this. That is new. To a persistency below negative yields. This has ramifications on all of europe and comes right back to the United States as well. You would not pay for the privilege of lending germany fabulous article this morning on repose and reverse repos. This is something bill gross has talked about. School theventional fed will use as they try to pull back liquidity. This comes at a time of increasingly week data not just. He peripheral but the core absolutely. Trying to link economics to the market. Talking equities and a moment. Looking at the web coach webpages. Starting in iraq, the u. S. Trying to figure out the next move. Now the mating debating whether they should mount a military rescue to mess rescue those on the mountain. The question whether they should secure Landing Strip or humanitarian core door. This is just amazing geography as part of the borders of iraq. It is in eastwest Mountain Range below syria. Amazing that they are trying to get civilians into syria. Goes to the troops on the ground. President and entire u. S. Military adamant there will be no troops on the ground but sending 130 advisories advisors to iraq. There are two possibilities, the land zone or perhaps using helicopters. Further out there is a question of whether there will be troops on the ground. At some point the pentagon has to prepare for the fact that they will have u. S. Troops facing off trying to can avert the collapse of the Iraqi Government. Dick durbin, majority whip in the senate has made clear he would withdraw support from president obama should that happen. A very contentious issue. Incredible iranians and us on the same page that they wanted Prime Minister to go. That has shifted in the past 12 hours. I wonder what the next 12 hours will be for baghdad. Think about just 12 months ago. Appears they are working together to make for change. Amazing how quickly things move. We will have an important the shown later on in about to what extent he is really just a proxy war. Meanwhile, convoy. What is in the trucks . The convoy russia says is filled with humanitarian aid is approaching the border. Ukraine is skeptical. Some Officials Say it is carrying military aid. They said any attempt to cross the border will be considered an act of aggression. The red cross using strong language, pushing back saying they want to hear much more clearly what is in the trucks, who is driving them. A lot of people say it is a pretext for russians to send troops into the ukraine under the pretext of protecting. The trucks are pristine to me. They look like a wedding on nantucket. Perfect, almost surreal. Wasnt ian bremmer on the phone yesterday who described them as the potential trojan horse. There may be something working in the trucks. Lex and bremmer made a glib remark about how they have a long history of humanitarian assistance. Nudge, nudge, wink, wink. If they do not let the convoys and, he is being seen as someone trying to help and being prevented by the international community. As richard haas of the Foreign Relations pointed out, the 80 Approval Rating enjoyed by mr. Prodi. Mr. Putin. Alibaba per carry for what could be the biggest ipo in u. S. History. Chinese history. A twoweek roadshow. It all begin september 3 with the ipo taking place in the middle of the month. Sooner than the act of her day people were talking about. Christ i thought people were talking about 88. I thought people were talking about 88. Celebrating his 50th birthday a long the way. Preparing to raise money for softbank. Jack ma. Yahoo has a 20 stake. Who owns the bigger share . Softbank. Transparent . She is a font of information. I had read up on this. There is the front page. Right now have to get smarter on the geopolitics of the moment. I got up the map come a 100 88 miles from board as to beltran and then solved west toward the order. Ukrainian carrying humanitarian aid. The red cross is unsure of that. Decidedly kiev unsure of that. Ryan chilcote joins us from london this one in. What is on the trucks . I dont know what is on the trucks. The russians saved all of sugar, salt, water, power generators, 12,000 sleeping bags. We have heard some ukrainian say maybe could have weapons. I would point out if the russians wanted to sneak weapons into the ukraine mine one would have thought, probably not the safest place to do that. Plenty of huge holes in the border that the Ukrainian Government itself says they do not control so i am not sure why he would want to comment on that. Putin doing this so he has the show of the trucks being stopped at the border. Then what . He puts the Ukrainian Government and is a whole world of hurt because they have not been providing the people with electricity or wanting running water. It puts them in a really difficult place. That is why in the past hour they themselves said they will send their own humanitarian aid convoy. I think it really puts the pressure on the ukrainians. Also on the germans. The russians can say we are ready to help the people, they have not had it for two weeks, and you will stop us from assisting these people in dire need . The newspapers described the rebels as iraq have group and described the Ukrainian Forces as being in the lead here. Are the rebels on the back foot . I think there is some that true to that. Themselves have said if they do not get help in the next couple of weeks, then that could be it for them. The ukrainian troops can move in and move them out. It might be messy but pretty much the only issue is how messy it would be. No one really thinks the ukrainian military, although it might involve huge cost cannot take the cities if it does not want. Maybe that is why we are seeing that humanitarian aid conflict right now. Inc. You. Thank you. Today we are joined by Gina Martin Adams. As you travel around the country you talk to Institutional Investors, how concerned are they about all of these events that capture the headlines from iraq to the ukraine, etc. . Ofi think it is a topic discussion. We have seen cash levels and shove that higher so there does seem to be some hedging for a bit more volatility Going Forward him a but i think it is more related to the fed than anything else. It is difficult to know how to per pair in the equity market. Maybe there is a little bit of industry and Sector Movement more broadly not really about the fed for u. S. Were polio managers at this time. Gina martin adams with us. Right now company news. An accounting giant hopes to wash its hands of the Lehman Brothers collapse. Ernst and young won the new York State Court to agree it was not to blame. They found the company was not liable for the book keeping track that made Lehman Brothers look stronger than actually was. General motors the latest targets of regulators in china. Shanghai gm says talks with antitrust officials are facing penalties for breaking the countrys monopoly laws. They are prompting suggestions that china trying to worse down prices. Apple says 70 of employees are white or asian. Tim cook says he is not satisfied with the companys diversity. Company news. Lots to talk about but that in the chart. Beginning of company news, we are getting a lot of news from retailers. Macys will be leading the pack. The Earnings Report comes out later this morning. We will tell you what analysts are forecasting. That leads to the twitter question of the day, what are you willing to pay full price for . Treat us. Do you pay full price for anything . Some handbags. Bowties they do not go on sale ever. We will be right back. Good morning, everyone. They do not have thousand island dressing. Adam johnson lives there seven days a week. Nicholas marsh shops creative salad sherman. I am not kidding. Creative salad chairman. I am not kidding. Not a typo. Seriously, the salad of new york city. A conversation with nick marsh on eating healthy at lunch like i dont do. Good morning, everyone. Gina martin adams with us this morning from wells fargo. To help us with that, adam johnson gets us started on focused onwe are u. S. Consumers. I know we only always a two thirds but that is only if you add in health care. Commerce Department Reports retail sales and macys is kicking off several days of Department Store earnings. That happens later today. Gina martin adams advises the Institutional Investor clients of wells fargo. You are telling clients to underweight retail. Yes him for a number of reasons. Pretty terrible earnings momentum revision all year. A pop asay be said for companies are said to beat expectations. Expectations are so low. Expectations i think there are still too high for the Fourth Quarter forward growth. The consumer quite frankly usually follows housing. Had incredible housing activity last year. This is creating some deterioration. Continue. Here is the deterioration of macys. Is there any other chart like this in the world . This is like a home run. Look at this. 10 in 2009. A pullback. One of the reasons is macys has really mastered the clicks and brecht on the channel. Driving business by walking into the store. Also leading the charge of the big discount. Sale. Is always a eating into macys margin. Toit is difficult to speak individual names. So i cannot tell you what macys third is doing but i can tell you it is a shrinking portion of retail. Increasingly it is all about how to log retail and the home retailers, and home depot and lowes and Department Stores are a smaller and smaller share. I think what macys has benefited from his lower competition within the s p 500 itself. But you are right that margins overall is one thing to worry about. I do think that is impacting retailers. Wemaybe that is one thing can help determine. Look at acs as an example. Earnings growth 34 . Sales growth is 34 . Growth 1819 . Should we be suspicious of that . I think that is pretty typical of retail at large. A lot of this comes from retail, a to online shopping. Margins are a big support from most earnings across the index. One thing were working on this year is companies that have exceeded revenue acceleration are likely to outperform because margins have become such a big story. Tda margins are starting to fall. We are looking for opportunities. I do you the margins are a key story for the relative opportunity. We are glad you are here and with us the whole adware. Ing up, will the sparks will sparks joining us as the guest for the next hour. We are on Bloomberg Television, radio. Any place are not . No. Digital all the time. Go get a copy. Back in two minutes. Go get a coffee. Good morning, everyone. Dow futures of 51. A nice start to futures. We welcome you on this august morning. Here is olivia sterns. My morning mustread comes in datat about the worrying on italys recession. He writes the negative results referring to the fact that italian gdp shrank by. 2 in the Second Quarter together with the very low level of inflation made that sustainability more difficult to achieve. More. Is so much he has this great mandate, but there are so many reforms. Mound that. Egacy of there is of course the mafia. They just keep revising down and down. One cap is they had to start counting cocaine sales and prostitution to boost sales. I love what you say about hope. Every time i see it i circle it. Hope is trouble in finance. M to bring this up he has a phd from chicago and he thinks mario draghi should be printing more money. Japan with the quarterly statistic as well. Coming up, well the market be able to correct itself after julys largest single day selloff in three months . We put that question to Gina Martin Adams of wells fargo. Good morning, everyone. Bloomberg surveillance. Stearns and adam johnson. Egypt offers a plan for longerterm ceasefire in gaza. They are not buying it. Gaza says forces are ready to start trooping fighting again. In ferguson,s missouri. Protesters want to know who fired the fatal shot. Police officer say the officer is getting Death Threats and not releasing his name. Clippers, the owners the owner not the players being cheered. The judge yesterday pushed out Donald Sterling for racist remarks. Confirming the purchase of the team by steve ballmer. The former microsoft chief just cheap if the hoops enthusiast. Bei think his energy will somewhat infectious and supportive of everybody elses desire. Going to say steve is going to open his checkbook because the nba has rules and terms of how much you can spend and where and how much you can pay and all that stuff to keep parity with the league but he will be there. To the extent that this team will not fail were a lack of resources. That was dick parsons, the interim ceo. Good. Y on to the equity markets, your 401 k . All bull markets of doubt. Another surprise of the bears. Gina martin adams has been a cautious poll. Still many butts. I congratulate you on being out front about being a cautious poll. The level update on of enthusiasm to be in the equity market. I hate to say it but i am still relatively cautious because of the uncertain impacts of the fed removal of policy. So many of the viewers rightly to say gina is dead on, that is exactly how i feel. Martinel like tina adams, how do i act . What is the to do list . We focus on companies that are producing Revenue Growth. Companies that are likely to produce accelerating and Earnings Growth acceleration. Companies that are provided lower p e ratios. Reasonable value. So i think there are opportunities still in the index. Hold it . Road call and no, because i think at this point we are likely to experience a little bit of a chop. Can you buy energy based on the framework . You can buy some of the energy. We have market weight on the Energy Sector mostly because earlier this year energy was hot and probably got a bit overbought. Wait for a better opportunity. This goes to utilities. They got hot for a while. Very hot because rates did not go up. If that what kept it under the fact that rates got low. Utilities is even more dangerous than energy. There is a broad swath of companies that were also avoiding. These are the interestrate sensitive segments. Utilities is one of those because historically a very close correlation to 10 year treasuries. When rates go outside for is bad for which utilities. The worstperforming and the last three months. Very volatile sector. That is because of the movement and uncertainty with regards to where it is going here. Where do you have overweight . , materials. Is a blowing blowing away estimates. So much skepticism with respect to health care. Rex and to what extent obamacare has artie been priced in. It has just been outperforming so it is one of our favorites. What is material stock, the wall in my suit . The wool in my suit . Mostly chemicals. The biggest. Also, metals and mining. The ocalan is of the world. Why are they benefiting it is you are expecting gdp worldwide to pick up . A combination of things. Part of the material sector benefiting because we see in growth in production. They have cut to near zero the balls. So as soon as we see modest pickup that benefit. Within the conversation, you go to the heart of the matter, the dynamics of the income statement. How much more can they cut . Are Companies Running so efficiently there is no more to do on the income statement . There is very little left to cut. Margins have been falling. What is holding up margins are interest, taxes. So what we have to see is Revenue Growth comes through. That is why it is the big theme for this year. Littleknown but the reality is Financial Engineering has driven a lot of earnings. Lincoln. Like emerson everyone had hair down to hear. Eva. Margin and then vampire weekend. We go fromzed where here. Dow 17,000. You have been in the market. Others have been more bullish. Others have been more right than you. Do you feel like you are lagging behind . So far i have been lagging behind. The evidence is pretty clear we have not been bullish enough. You were noton is all cash. Not at all. Most of my clients are involved in the equity markets so a matter of how you beat the benchmark. Exit is important. This is important. You are either 100 in the market or all in cash. The real world is they have to be in the market. Tie yourself to