Hold on enclosed negative once again. Scarlet i want to run through leaders and laggards here. You can see the gains were not big by any stretch of the imagination up. 5 . Iotech did better it tracks the sector up 2. 5 . Energy was one centered declining as oil prices decline. Ne name i want to highlight it has fallen or gained 2 . The anecdotal on the iphone seven has an positive. Sprint says they received four ands as many new iphones later today, verizon came to say its orders have basically come in within the normal range where aboutlects lets talk bond market because that is the center of the action. The story has been that back up in rates lately. Down toear yield back 1. 7. Lets look at the bond index yield. Yields are clearly on the rise. This captures all the bonds. You can see the rise in yields, extraordinarily low. At the endup there that arguably caused so much of the volatility we are seeing in markets. I want to show another chart. The five and 30 spread, this is interesting. It is now 10 Straight Days the 530 spread has widened, and this ofthe longest since august 2012. All of these things about the people aretening, worried about, is it widening . Or the wrong reasons is this an unwanted tightening of fed policy . 10 Straight Days of widening. Giving back some of yesterdays gains, that if the dollar index up by one third of 1 . Goldman tax is the is staying faithful to the call that held since 2014. Currently pricing in a more thread. 15 based on the forecast, 3 rate increase based on the tightening cycle that would last through 2019. Currencies have fallen for three Straight Days. That is the index there. Today you can see they drifted higher but there is still incredible weakness and among individual currencies, we see the commodity centric currencies drop in value. Arrows indicate the dollar appreciation. Oil today. K look at whipsaw action. We have got Inventory Data that first appeared to show, people interpreted it as bullish but that reversed right away. We ended up down 2. 7 . You mentioned the oil rally we saw a earlier this year, one of those things we saw underpinning emergingmarket and an oil has not been impressive as of late. Scarlet you see its pilot spiraling lower as a result. A reminder that you can find all of these charts using a function at the bottom of the screen. I am looking at the world wells fargo fallout. A drag onainly Berkshire Hathaway because Berkshire Hathaway owns a 10 stake in the bank. These are the top five Equity Holdings and how they performed so far next year. Us, cocacola, america next and wells fargo is way at the bottom right here. The white line here is the s p 500. Down 13. 5 so far this year. Fascinating about all of this is it came out of the financial crisis relatively unscathed. Did not sell those Exotic Products and it did not take extreme positions. It pursued a breadandbutter approach and that is what got it. The decline is now smaller than jpmorgan with market caps and it is interesting if there was one bank people said would have a really good reputation, it is wells fargo. Interesting to see how the brand holds up. That is why it is a Great Association with warren buffett. I am looking at risk parity. These are a 1 change in the multiasset strategy index that tries to essentially capture risk parity strategies that long stocks and long bonds. This is everything selling off at once with no place to hide. This index has had its two worst days all year on friday and tuesday. It got a respite monday on the rally and two ugly days in a row. Really driving home there is no diversification across asset classes. You will down will be down by ridding. Scarlet if you are long on everything and every thing keeps going up, to the downside, that is where it hurts joe your it is athe theory is that it low volatility strategy that one thing goes down and other things go up. Times worked for a long but lately not so good. To get more insight into the trading, lets turn to oliver. Thank you for joining us. Oliver see out there . A quiet day. I think for a lot of people, this was a relief. A big move friday and another rally back and moving back to normalcy. Interesting throughout the day. There has been a slow down trend. At the same time, it seems there is a bit of hesitation to go out and put a tiny month a ton of money as well. You have got to remember there are big events on the horizon. A slow and quiet two months and now we get into that time where you talk to straight to , people are digesting and gearing up for the events. We have got fed next week and even though the market right now thinks it will not go, it is a big event and has the potential to surprise so you do not want to the caught on the wrong side of the trade. It has been painful for that strategy. To investors and stocks, are they saying everything hinges on the yield curve . Classic good question because we have seen this correlation between both asset classes. That is what causes some of that weakness that joe pointed out on the index. There is a lot more focus on yield right now for sure then there has been in the past. If you reasons. One is they have both stocks and bonds in the longterm market. It is technical, which market is more overvalued, which one is pricier at this point . The saying goes that intelligence is in the bond but ,s intelligence does it take to buy something that seems like it only ever goes up. Yes, if you look from a technical standpoint, it is how much longer can both roots rally . Thatve this other aspect we talk about at length. A lot of the recent rallies from the first half of the year was related to bonds, and it was a very bond like rally in the stock market. I want to bring up a chart here i just showed it a few minutes ago. X had moren vx activity yesterday than any individual stock. What does it do to the market one volatility itself becomes such a big product for people to trade . That it is no longer a mere derivative of other stuff that it is something people place direction on. One of the most tangible repercussions of that is what is happening in the vix curve right now. There are various reasons why the futures curve has basically remained upward sloping throughout the selloff friday and monday and one is you can argue it is such a long position and a lot of the volatility instruments. You buy it and basically what happens is your spot rolls over in the next month and you have theell and that keeps selling pressure on the front end and keeps that curve flowing upward. Thing is i think there are a lot of questions, when you talk to asset managers, people advising clients on where to put their money, theyre not close not totally convinced that beyond the institutional leverage type hedge funds, that people really understand what these are. You see a huge volume on an astrument like that, hey, good day for you but there are a lot of times where there are volatility products where there is a sharp move that maybe people do not fully understand. That is a separate debate but what we are seeing is there are a lot of bets being made directly on volatility through those. Hedge funds have been short through mostly vix projects. Looking over the longterm, that has in a big that. Asset managers have been on the other side of where they think that will pick up. Lets take a look at the positioning here of investors here you look at a chart, the long versus short ratio. To does that compare previous weeks leading up to the fomc . Right. This is bullish. It is the most long futures contracts on the s p. It is a ratio of long versus short contracts. This is the way it has been for several months. It also explains some of the shock on friday. You had a notion that maybe the quantitative easing that we have gotten used to is fading or at worst reversing and you have all the long positions. I think that will be important. Joe thank you very much. The Unemployment Rate is closing in on the fed level of unemployment. You see the professor of economics next. This is bloomberg. Mark Hillary Clinton has just gone through one of the roughest of her president ial campaign. A poll underscores the challenges she faces. This has donald trump leading clinton in ohio. 43 among likely voters in the race. Trump pulls well in ohio among men in union households. One of clintons problems, the massive trade. The trade agreement hurt jobs and exports. Syriansrian aid in being held up by security issues. He says he is urging the russians to use their influence. Ith the Syrian Government he reached out to u. S. Officials. Casess aware of dozens of of legionnaires disease in the flint area but failed to share the information with the public. Miller pleaded no contest to the misdemeanor of willful neglect of duty. Legionnaires has believe made but many it was likely the cause. The National Football league and get a new efforts to combat concussions according to the Washington Post. For thatncludes money are protective gear as well as medical research for head injuries. It remains under intense what is suffered by players per global news 24 hours a day powered by more than 2600 journalists and analysts in over 100 20 countries. This is bloomberg. Back to you. Miss overhat did you 5 . Employment and if so, what does it mean for how the fed frames next move when policymakers meet next week . Joining me now is tim. Lets start with the dual mandate. Stable prices. Is it an equal mandate or does inflation matter more to the fed . Should bes stated, it equal mandate. We should be thinking about both sides of the equation. Joe im curious about the Unemployment Rate mandate. The Unemployment Rate, we are at full employment, somewhere around 5 . That thatent are you is accurate . Seen wages go crazy yet, where does the number come from . It is an estimate. We do not know what the natural rate of interest is. We have to use these metric models to come up with estimates. It is one estimate of the natural rate here it could you lower . The answer is yes. That is if they question the fed needs to think about. Setting the rate at 4 is a big difference. Hundreds of thousands of jobs. Joe one thing people talk about is is the fat out of ammunition . People have been saying that for years. I want to bring up a chart our colleague showed me which is basically that longterm , wectations of rate hikes see the drop in the longterm expectations in the next five years. To three hikes. How much further can they go . We saw a big drop in expectations. Does this represent a further limit to how much the fed can there is a huge topic or it should be a huge topic for the Federal Reserve, to what extent is it asymmetric here. A better place Going Forward with Interest Rates close to 3 at the short end and Financial Markets are saying that is not likely. It puts a damper on the fed asns to raise Interest Rates might be stated in projections. Scarlet there is an academic projection where they rethink interest, where that might be and where it should be. In the meantime, theyre looking at the Current Situation with unemployment below 5 at 4. 9 rising, with bond yields , how does the fed factor that into its forecast next week . Does it give indication that it will start to pay more attention to it . I do not know if you are seeing enough in the rate to be worried that it is at a pace that would be disruptive. If we are thinking about Something Like the taper tantrum we had a couple of years back. If we see that kind of Movement Just yet. We might see something more healthy where some of our expectations, the Federal Reserve will stay in near zero for very long. Something better happening in the economy or we think the yield can be at a later date. The governor has been one of the main advocates at the fed looking at the conditions. It seems to have emanated out of International Action more than the u. S. , japan, germany. Does this bolster the case that the fed has to be more con isnt of International Economics than it has been in the past . That argument has been made more evident over the past year. Financiald to the markets and the dollar is a linchpin currency. What the fed does matters a lot. The extent this is an issue that does not go away anytime soon for the fed, that is true. Next we will talk about the state of Macro Economics. Something that no longer qualifies as scientific research. This is bloomberg. And nyu economic professor calling out Macro Economics in a big way. He wrote the evolution of Macro Economic smears development in string theory from physics, which suggests they are examples for fields of science that rely on mathematical theory which fact can end up being subordinated to the fear let death. Go preferences of leaders. Professor of economics still his economics a failed practice . Everyone is focused on numbers and equations that there is no power or relevance to the world anymore . Know, i hope that is not the case. Criticism is one he is making for quite some time now and it is not something we have not heard in the wake of the financial crisis. Not seem they were asking the right questions. Scarlet it is also difficult to figure out what you are measuring and how to measure the new forces like technology, are in unprecedented times, especially when considering monitor policy and prescriptions are so unusual. We have departed from the unusual path and are in experimental mode. Does macroent economics need a complete rethink . Toi am not sure we need throw out everything that is done. You will find instead that we can start using the tools we have to ask different questions. Once we have not thought about for a while or ones that did not give the attention deserved or they were worried about zero Interest Rate policy prior to crisis put on the radar. The toolsnow if necessarily need to go away but we need to be more open about challenging basic assumptions and rational expectations and models included in rationality or something similar. And thinking about the role of Financial Markets more. Institutions buttressed by economics will lose their credibility. You think about the fed in 2016, so trying to figure out if i can get inflation to 2 . Of the function of flawed emesis and extraordinary activities that it done since the crisis . I am not so sure indicate in the case of the fed. Much theyre taking too faith. Signe extent that is the without thinking about the probabilities around them, i could be correct in that sense. Ive got to run. Sorry about that. Great to have you. Thank you very much. Coming up, this new start once a stake in your home. This is bloomberg. Mark get first word news. The u. S. Will offer trade benefits to myanmar. Indicated that the United States is not prepared to lift sanctions that we have imposed on miramar or quite some time. u. S. Companies have been watching closely for any sign they will get access to the fastgrowing southeast nation. It was known as burma before the former military rulers changed the name to myanmar in 1989. Donald trump continues to cut into Hillary Clintons lead. A new poll has clinton leading from 4843 . In august mrs. Clinton had a doubledigit lead. With thirdparty candidate, the front runners are virtually tied. Clinton tops trump 3149 . Terry johnson has 13 . Jill stein has 4 . Secretary clinton will be on the campaign trail thursday after sitting out a few days with pneumonia. She will be in greensboro, north carolina, then join president obama at the Congressional Hispanic CaucusInstitute Annual gala dinner in washington. The u. S. And israel signed a new aid deal that will give 38 billion over 10 years to the u. S. To the israeli military. The largest the u. S. Has had with such any nation. It replaces a longstanding deal. It calls for israel to spend all of the money on usmade military equipment. Global news 24 hours a date 600ered by more than 2 journalists and analysts in over 120 countries. Scarlet lets get a recap of todays market action. After three Straight Days in which the dow moved up to the doubledigit points, we have a bit of of triple digit points, we have a bit of a calm. The s p 500, little change, while the nasdaq climbing one third of 1 . Energy stocks took it on the chin, falling 1 as a group. No Economic Data moved the market. Joe it was a quiet day. And for the first time in four days, we did not have a 1 move. Finally a bit of a quiet day. A bit of a decline in rates as well. Whatd you miss . The new tech startup wants to take a stake in your home. Digital is giving homeowners cash for a share of the property. The palo altobased company is backing investors and former citigroup ceo vikram pendant joining us now is point Digital Finance ceo and cofounder. Thanks for coming on the show. Why should someone sell a stake in their home . First Financial Technology platform that allows users to sell equity without taking on Additional Debt obligations. Pc users using us for investment second the small business, investment properties, reinvesting into the home. We see customers that want to optimize lower monthly payment. Joe lets talk about the investor. At first blush, having this liquid asset that somebody else controls might not be that appealing. But there is an upside built into it. Home, they of my get 20 of the upside. Caucus through the economics from the investor. Talk us through the economics from the investor. This is access to an uncorrelated inflation hedging asset class. This does not exist. There is a train trillion dollars in u. S. Residential equity alone. There is a great way