Not seen the kind of range today we have seen in recent days, that changes in the markets prove me wrong. We swung from a loss to a gain. It is a smaller loss than we have seen in recent days. Still, the volatility is there, or the swings are there and daily averages. There was no catalyst that seems to send stocks higher. If you look the daily range, with the average, you can see that today, yes, the range is on a relative basis somewhat smaller. Overall, the range has really ticked up recently. Lets zoom in to get a better look. There you have it. Here is todays daily range versus where it has been recently. It is higher on balance that it was last year on a typical day. . Hat is leading stocks higher we have Consumer Discretionary stocks performing well today. Ther armour is helping lead gains there because the companys earnings and revenue came in better than estimated even the north american revenue still fell. The rates of decline is still smaller than it has been in recent quarters. That has helped the shares. There is also some likely Short Covering going on. Some of the companies that sell under armour goods or retailers generally are rising macys, jcpenneys, and calls getting a lift. Another group doing welcome of the best in the s p 500, the financials, specifically the banks and we had an note from kbw. And analysts saying the selloff in bank stocks has created an opportunity for investors to upgrade quality at a reasonable valuation. That is a quote. The analyst saying jpmorgan is been boosted to outperform saying the market is pricing in an overly optimistic scenario for jpmorgan. There could be a rocky environment ahead, but the best in class banks should do better. Finally, interesting chart here on the bloomberg given with the price to earnings ratio. In the past, we have seen the s p, when it has declined, find support around a price to earnings ratio of around 15. 5. Right now we are still above pointlevels at about 16 seven, but nonetheless, it is something to watch if we do see continue to decline will we see a bounce, perhaps, or support at those levels . Julia thanks very much, julie. Laterl check the markets in the shelter for now, firstword news with mark crumpton. Mark crumpton President Trump warned today it is now were never when it comes to extending protections for young immigrants, the dreamers, while Senate Majority leader Mitch Mcconnell threw his weight on legislation based on the president s priorities, illinois democrat dick durbin reminded colleagues the clock is ticking on daca. Dick durbin the illumination of that program will mean these young people in many like them will be subject to deportation and no longer allowed to work legally in the United States. President trump challenged congress to do something about it, to pass a law. More than five months past, and we have not done that. Durbin saysr olympic Gold Medalist chloe kims story is the story of immigration. He evoke the story of her fathers trips did on estates from south korea which is the couple hundred dollars. She won a gold medal for the u. S. Today in the half pipe. Former white house can indications director Anthony Scaramucci says President Trumps chief of staff john kelly should step down. Tweet came after the fbi revealed it notified the white house in july about Domestic Violence allegations against former white house staff secretary rob porter. Thatny scaramucci tweeted general kalani in general kelly almost certainly knew mark in sweden, a trial began today the case of a man who ramming a stolen truck into a crowd in downtown stockholm in april of 2017. The man is charged with terrorrelated murder and attempted murder. He told officials he wanted to punish sweden for taking part in the fight against islamic state. The prosecution is asking for a life sentence. A british judge has upheld an arrest for the wikileaks founder julian assange. He spent more than five years of abating the law inside of Ecuadors Embassy in london. He is trying to avoid extradition to sweden. He is wanted therefore questions about allegations of Sexual Assault and rape. If he were to leave the embassy, he could be arrested. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Fed chairman Jerome Powell is moving to reassure the volatile markets, saying we will remain alert to any developing risks to financial stability. We are in the process of gradually normalizing Interest Rate policy and our Balance Sheet with a view to extending the recovery. Join us now with more on the markets, cameron price. Whichever way it is right now for markets, it seems we are more sensitive to the fundamentals, be it data, be it earnings. Yes and no, right . Parade ofirtual analysts and strategists bloomberg has trotted out have said, the fundamentals have not changed. The price has. To some extent, it has been working over bought conditions. Julia you could say the rates market wasnt pricing appropriately. Cameron that is probably fair, but in terms of what powell said, what do you expecting them today we will fall asleep as Financial Risks emerge . Of course his goal is to be on top of it. Scarlet his goal is to not make waves. Is that a good job doing so. He has been on the Federal Reserve board since 2012 and has a mark inmark terms of memorable remarks before hand. Scarlet i want to talk about aboutyen that you talk is a risk barometer, but the story of currencies has been of a weakening dollar and not theyen. Is it still a good barometer . Futures are down, equities look awful, and dollaryen has gotten crushed. To some there is still a pavlovian response that the ask is some that the yen is some sort of risk barometer. I think the strength of the signal is weaker. If the dollar is going down against everything, it is going to go down against the yen as well. Look at last year when Global Equities had the low volatility much to the upside and dollaryen went down on the year. And if you look at the yen the nikkei, the correlation is lower than it has been between those two in, like, five or six years. There is an argument to be made that when we see dollaryen, what we are really capturing is the dollar more than the yen. The fact that we have broken the abeeconomicse era, i do not think it is ringing the bell. Nervous,with people people are looking for any signal they can get. You point out if you look at the yen on a tradeweighted basis, it is at the midpoint. The red horizontal line shows the average over the past three 111. 3 is1. Pretty much the average around 110. Cameron you can see it is way weaker than when shinzo abe took office. It is more consistent with a generally favorable environment for risky assets. Julia cameron, great to chat with you. We do have some breaking news now from israel, and it regards Prime Minister netanyahu. The Israeli Police are recommending charging the Prime Minister in various corruption charges. We have had a response from the Prime Minister saying his only motive is to advance national interests. The are aiming to topple his government, but the cases, the charges end without anything in the Police Recommendations have no place in democracy. Dollarshekel is reacting, higher by. 5 , but coming back up as we show you the chart briefly. A bit of a reaction in the israeli assets. You can see it coming back off the highs. Dollarshekel weakness. You see Benjamin Netanyahu given a televised response saying the investigations will end without anything. This,rther headlines on we will continue to bring them to you. For now, from new york, this is bloomberg. This is bloomberg markets. I am julia chatterley. Scarlet time scarlet fu. Lets get back to the 10,000 Small Businesses summit in washington. David westin is there with a leading scholar on competitive strategy. David, take it away. David yes, im here with dr. Michael porter, a professor at the Harvard Business school and a leading expert on competitive strategy. Welcome. Ported dr. Porter, a pleasure to be here. David you have been talking to Small Business leaders about strategy is it different for a Small Business than a big business formulating strategy . Dr. Porter a Small Business has less resources, less math, capital, so they have to be very clear about who they are trying to serve, who they are trying to create a competitive advantage with. They cannot cover it up with sheer resources and math. I love talking to Small Business owners about strategy because they are people that they listen, and if they believe you, they do it, whereas in so many big companies, it is a complicated political process to get the company to move in any direction. It is very refreshing to me. Is it more challenging in the sense you dont have a team to help you formulate your strategy . You have to come up with it on your own, do all of it. Is that a bigger challenge for Small Business . At some level it is a strength because too many Bigger Companies delegate strategy to these outsiders who, frankly, dont do it very well. Consulting is very good at getting data, understanding your environment, getting better, kind of, visibility on the industry, but also the strategy has to come from within. It has to be, alternate, developed by the Leadership Team as a whole. It cannot just be one guys idea or one womans idea. It has to be something everyone can buy into. It involves marketing, production, Service Everything has to fit together. I think Small Business can have an advantage by having a more cohesive team, having more of an alignment among all the players. Julia there is a consent david there is a consensus that Small Businesses an important generator of growth, dynamism in our economy, not just in United States, but the world. Dr. Porter that is absolutely true. As i at the same time, understand it, business origination is going down it is not thriving, we are not expanding Small Businesses. Why is that . Dr. Porter you are right. The trends in Small Business have been troubling. Rate of new Company Formation has been declining. The percentage of jobs being generated by Small Businesses is lower than it historically used to be. I think that is a function that the Business Environment in america has eroded for Small Businesses, even though it hasnt eroded as much for larger companies. For example, if you are a big company and you cannot find skilled people, you just hire them in croatia or germany. If you are a Small Business, you are stuck with circumstances here. If there are high regulatory costs in america, you are stuck. The big company can go offshore. Small has been disproportionately affected by the erosion in our Business Environment in this country, higher regulation, less access to capital, less efficient infrastructure, lots of scale issues and skill gaps. Small businesses have been taken the brunt of that, and of course, the American Dream is all about Small Business. A lot oft has created attention we have seen in our Society Today a lack of progress. I think there is now a new optimism in Small Business. I think it is mostly because of the tax reform, which people see as progrowth, but we have a lot of work to do regulation work, skill work, education work , and hopefully we can do it. Julia Goldman Sachs david Goldman Sachs did a survey and they are listing the things you are talking about is the biggest impediment to growth regulation, access to capital, and also finding skilled labor. Something else you have worked on hard is health care. How much of that is a burden, disproportionately to Small Business . A big company has a lot of resources to figure out the problems with health care. A Small Business, it is a lot harder. Believeer i think we that health value the quality relative to the cost is probably one of the major weaknesses in america right now affecting our entire economy. We are way off the charts, how costly it is incredibly high. The quality of American Health care can be very good, but it is highly uneven. The data does not show that American Health care on averages better. This is one of our firstorder issues. We were starting to make a little bit of headway in restructuring our Health Care System in changing the way we pay for health care. Have been paying based on volume if you do more, you get paid more. Guess what, people do more. Rather than value to deliver good results. Theres positive reform going on right now, but we have a long way to go. David you spend a lot of time his land politics. Were sitting in washington. Washington is creating part of the environment for Small Business and large businesses. There are a lot of things people think is not working right now. Dr. Porter politics has failed americans because it is working for the parties and the partisans, but it is not coming together to deliver solutions that really works. Like in health care we have obamacare zero republicans vote for it. Not the republicans are in charge, and their goal is to eliminate obamacare, but with no replacement. We are playing a car partisan game, a game not a game for the average citizen. I think that is our number one problem now. Our government cannot work the way government is supposed to work. Then were going to have a hard time making things better in this country. David it is all part of a much bigger, longer discussion. I hope you will come back to have it with it with us. Dr. Porter im obsessed with it. David Michael Porter from the Harvard Business school. Julia thank you to david westin. We will be back with david westin more in the show. We also have a bloomberg exclusive coming up he will be speaking to Goldman Sachs ceo and chairman lloyd blankfein. That is one not to miss. From new york, this is bloomberg. Scarlet this is bloomberg markets. I am scarlet fu. Julia and i am julia chatterley. Lets turn our attention to football of the english kind. Scarlet for once. Been bt and sky have awarded the premier League Broadcasting rights. We are joined by paul sweeney. So, this is a theme we have seen before, the rice are split you bt and sky in the the u. K. Walk us through. L it used to be all sky they had the soccer and football rights, and that drove subscriber growth. They changed it up. They wanted a second bidder. Bt came in and created a second bidder. They are sharing their rights. Now with new rights that will start next year, it will be sky and bt, but there are still two other packages that have not been allocated. The expectation is that we dont know who they are going to, but the expectation is it might be one or more of the digital players, whether it is amazon one of the other digital players that could present a new potential partner out there to disturb this program which is what a lot of the sports leagues around the world are moving toward. They want to put some of the products on Digital Services because that is where the audience is going. Julia the hopi here the hope here is it bids up the number of people, and the price, but that did not happen with sky. They are paying less. Paul sky came out with announcement with an announcement they are paying 60 16 less per game. Well have to see how it shakes up. There are numbers that still need to be out there. It is always better to have more bidders for content to bid up the present we have seen that most notably in United States with the nfl, who has done it better than anyone else. Scarlet they started the trend spreading out the players, it preserves the ecosystem and current instead of creating a zero sum game. Paul i think they found a long time ago the more bidders you have, the better, and once the networks getting used to having the nfl football, the ratings, the promotional platforms, they cannot let it go. 20 years ago, maybe cbs walked away. Big mistake. Nbc, at one point walked away. Big mistake. They came back tonight have the Big Four Networks all caps in football. Carrying football. Scarlet and that is thinking, maybe get netflix to join the party as well. Have they given any indication, the new players, how they might want to jump in . Paul really, today, the playerstop digital have just dipped their toes. Netflix has come out and said they will not do sports. They do not want to get involved. Players have just dipped their toes. It is very expensive, and they have not done that much. Julia as exciting as this is, lets cut to the chase if this is better for sky and they are paying less per game, what does it mean for fox or disney looking at assets here . Paul this is an important asset for sky, which is important for fox, which owns 39 of sky, and important for disney, looking to buy that 39 . Im sure the buyers of fox, disney, and even contest is look at the transaction, saying when i look at sky, i see they have major programming. Paul sweeney, thank you for the instant analysis. Coming up after last weeks selloff, volatility is back in a big way, and so, too, are traitors. This is bloomberg. Almost 400 million chinese are scheduled for the new year print as a population bigger for the u. S. That was some of our reporting from tictoc strings bite on twitter. This is bloomberg markets, and i am scarlet fu. Lets get you started with natural gas. Cooler temperatures are expected for much of the european continent, and it is off by 5. 6 percent in the past five days, and if you look at industrial metals, they are getting a boost on the sliding dollar. It is increasing exports and dispose big losses in the metal space. We have gains of 2 across the board. Now if you look at soft commodity soybean continues rains during try whether affecting crops in argentina. Julia. Julia now lets go to tech headlines. Mark Israeli Police have recommended indicting Benjamin Netanyahu on corruption charges. They are considered embarrassing and could increase calls for him to step down. Willls attorney general review the police materials before deciding whether to file charges. In a televised address, netanyahu said the recommendation to indict him on the charges will end with nothing. The Washington Examiner is reporting that a powder Barack Obamat to is harmless, i spokesperson said the substance turned out to be baby powder. The incident follows one in new york that some President Trumps daughterinlaw briefly hospitalized after handling a letter containing a white powder substance that was also not hazardous. As director Christopher Wray provides the details to question the white house timeline leading to the departure of former staff secretary rob porter Trump Administration last week following mustek abuse allegations from two exwives. Appeared in front of the Intelligence Committee. The process involves elaborate set of standard guidelines, protocols, agreements, etc. That have been in place for 20 plus years, and i am confident in this particular instance that the fbi followed the established particles. Not irector ray did declined to pass what information was passed the white house. Toss has decided benzemajacob zuma, agreed to step down, but he wanted to stay in office for up to six months, which the party considers to long. Global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Julia lets get back to the breaking news on israeli Prime MinisterBenjamin Netanyahu. Michael, thanks so much for joining us. We have the recommendation from the process now those recommendations become actual charges against the Prime Minister . And gives a sense as to what they relate to. The police have recommended charging him into separate cases, one involving deaths that he has acknowledged taking them wealthy friends of his, including a hollywood producer and the australian businessman. Tonight isndation that he took 208,000, and the second case involves a newspaper publisher the biggest paper in the country, who is a photo of netanyahu, but they were recorded discussing a law that netanyahu will push to curb a pronewspaper benefiting this other publisher in exchange for better coverage. Now is that police recommendation will go to the attorney general who will review the case. You know this is a big development, this is far from the final step. The attorney general could take weeks or months to make a decision and i would not do in the past, very often attorney generals have decided not to indict despite Police Recommendations. Scarlet netanyahu can continue to govern even if there is a decision that he will ultimately be indicted. Netanyahuthis do for support, and will this change support for him . For his base, no. Skillfully andhe yes copy the trump playbook. He has painted this as a leftwing conspiracy against opponents who want to topple his government and will stop at nothing. Hisce lacks that up base laps that up. The otherer hand, half of the country is convinced he is guilty and we are already seeing calls from opposition politicians for him to step down on the basis of the Police Recommendations. Scarlet so it will harden divisions in the country. Lets get you back to the Goldman Sachs 10,000 Small Businesses conference in washington, and david westin is speaking to a giant in the restaurant and hospitality field. Thats right, it is danny meyer. Good to have you here. Youe been talking created a Small Business from scratch. 1985, was it . It started in 1985 and we continue to be Small Business entrepreneurs. Launched five new businesses in one year. You kindifference is, of know a few lessons from getting kicked in the rear end, and our goal is to make mistakes and avoid making the old ones. David how has the environment changed from 1985 . Dramatically, from the food business, the biggest change, number one, the hospitality and food world has become one of the most validated entrepreneurial career paths. My head down and admit to my parents that i was going to a profession they never thought i should do back in those days. But now it is a place a lot of people go. The other thing that is different is that more and more people are what we call foodies. It, they pictures of talk about it, they blog about it, they yelp about it. It has become a passion and it is a great time to be a food consumer, and there is more ways to eat your cake than ever. A survey of Small Business owners i think some of the biggest obstacles that Small Business owners have a regulation, unknowable regulation, axes the capital, and access to labor. You new restaurants create new restaurants. As long as these macro challenges level the playing field, i have to say it is part of the game, i do know any business on earth that is not more regulated today than it was 20 or 30 years ago. I would rather spend my time trying to figure out how to win than complaining about it. Was aalmost like if i surfer and spent my limited energy complaining about the waves as opposed to say, how do i distinguish myself by writing those ways better . I dont complain too much about that. David theres concern in markets right now things like the tax cuts, which put more money in peoples comments. What are the bigger factors . Will be honest with you, the biggest thing affecting us is wheather. I never thought in my career i would follow the weather as cosi losely today. New yorkers can handle almost anything, but the first snowstorm of the year, they stay home. The next day, they are generally back at it again, but, the economy has been pretty good. We have had a fair amount of tourism despite the rhetoric that it may be less friendly for people internationally to visit new york. Tourism is actually doing very well. The challenge that Small Businesses are having in hiring people there is another side of the coin which is a lot of people must have jobs. Things are going very well, and we cant wait for spring. David there has been a lot of transformation driven by digital, what about in your industry . We are reading about increasing delivery service, we could avoid and so the food, but you dont need a restaurant to come to it. We are in the one business yourcant be disrupted by smart phone. You cant use your smart phone to cook a delicious hamburger, but what i was wrong about four years ago is that the degree of which people are using their smartphone as a Remote Control to life. You now have all kinds of choices if you want to eat really good food, you dont have to go to the restaurant anymore. You can have it delivered at home. You dont have to buy the ingredients, you can have it delivered at home. Fixed ora meal have restaurants deliver food. The challenge for restaurants themselves is always going to be this, the more hightech the world gets, it is a good thing that, i dont think people, i certainly hope people are going to stop doing that around dinner tables. You created shake shack what is next for another shake shack or Something Like shake shack . Is there a new thing that will come along, a shake shack for other cuisine . International,is they arent all 12 different countries, and shake shack is doing remarkably well right now. At the same time i think what we have seen in the past three or five years and it is only just beginning as the confluence of this fastand we have food casual restaurants, where fast casual, but guys like me was background is in fine dining restaurants. Highlyoths getting skilled mary talent, caring deeply about store design how do we hire people, drinkable, how do we volunteer in communities . That means fine dining is learning that as our margins get tighter and fine dining, our dining public just wants really good food and they want to affiliate with good values. They are no longer demanding that everyone of their yummy meals has to be in a fullservice restaurant. The margins are much better if you can share time with casual and you are going to see that in practically every category there is right now. Fascinating, danny meyer, he is a giant in the food business, no question about it. Will interview the ceo of Goldman Sachs. Julia, back to you. Julia we look forward to that interview. This is bloomberg. Scarlet this is bloomberg markets. Julia after the recent selloff, wall street may be getting the job needs. Volatility is back, but the big question now is whether it will last. Where joined now by bloomberg executive editor for global finance. Is ons a sense of what the Trading Floor at the moment. This is a very Welcome Change for Trading Floors. Lousy trading results because the market had been so, coming in the industry wants people buying and selling and that is how they make money. We have been hearing example by example that people are excited for this change. Today you have Goldman Sachs ceo talking about how there were caught wrongfooted last year because they were waiting for volatility which never came which hurt their bottom line in the end. He said things look different this year, and he also had ike of america coo saying that things are looking at this quarter and volumes are up. This is a very Welcome Development for what was a sleepy part of wall street. Scarlet we have seen a lot of big events, whether it is the election of President Trump or brexit why do people believe this time is different . Is anyones guess whether it will lapse, that the easy money will finally leave the market. We had fed chairman powell say they are still planning on raising rates, and that outlook does it seem to have changed much. Theres anticipation of when the cycle will turn and it will be key, but the explanation is that there isnt a clear consensus on why this happened now, and whether it will absolutely continue. Key hered that is the because theres comparisons may make at the last them with some volatility like this is thousand eight, but the Regulatory Environment is different 2008. Of the things interesting is that volatility is located in equity markets places like credit and other things, and you start to see that it will be significant. Scarlet welcome news for wall street traders and banks. Much, every thing is for now. Coming up later, we have an exclusive interview with the ceo and chairman of Goldman Sachs, david westin waill be with him live. This is bloomberg. Scarlet this is bloomberg markets. Julia it is time for our sector and stock report, with abigail doolittle. What sector are we looking at . We are looking at the xl why, it is up for a third day in a row, and one of the top sectors xly as part of the rebound rally. And it ise xly under armour. Up 21 today, and you can see the massive move higher more than 50 , on pace for its best andsince generate 2016, beat Sales Estimates by more than 4 , wallowing after disappointing performance for having too much inventory. Reset is said the progressing well into 2018 and gave achievable guidance for both the u. S. And international retail. We see shares popping higher, and we also see dollar related Stores Trading higher, and you look at Dollar General and dollar tree, you see all of these stocks trading nicely higher. This after President Trump and his federal Budget Proposal for fiscal year 2019 proposed ,hanges to the snap program basically food stamps, saying those families receiving more than 90 per month food stamps instead of receiving food stamps will receive deliveries of food. Whether or not that goes through , it is not clear, but wells fargo says the selloff yesterday is overdone and these companies each received 5 or less in revenue from that. And finally our stock of the hour, tripadvisor shares are popping higher on the day ahead of the companys fourthquarter report tomorrow, and what makes this interesting is that it is a gutter expectations report. Pop onto the bloomberg and look at the earnings function, bc for earnings on the gap basis are expected to put up a loss again on an adjusted basis a decline in growth for revenue, and also a decline in yearoveryear growth. All of this red points to how ugly this quarter could be, but and wife wethis have the stock, and read we have earnings expectations coming down for this quarter. Quarter,be a low bar perhaps that is why investors are cheering that they will beat it, plus there is this m a talk and it is a bullish talk for tripadvisor. Abigail has linux been you have acquiringhot of it. Pricelineing on doing well, even google or facebook, which is interesting, but something to keep in mind here is that it could be a true deal where they are bought out or there could be structural change within the company. If we hopped back to bloomberg we see the om function, Liberty Media corp. Up here, 14. 4 of t. , there isquarter reason to want a turnaround come at the stock is down 50 or more at its peak. Consolidational making use of the opportunity. Abigail, great to have you. Scarlet coming up will talk to the chief strategist at deutsche bank. Right now, we are looking at stocks modestly higher, up about 3 10 of 1 just off of session highs. But anything goes these days. The definition of volatility has changed in the last couple of sessions. This is bloomberg. Julia am julia chatterley. Scarlet them scarlet fu, welcome to bloomberg markets. Julia we are live from bloomberg headquarters in new york, and here are the top stories we are covering on the bloomberg and around the world. The bulls take on the bears, and we are joined by binky chadha about his warning, and a shakeup at blackstone. Who has finally made it to the top, and Goldman Sachs ceo and from thejoins us live Goldman Sachs 10,000 Small Business summit in washington. Lets get a check on markets with julie hyman. Stocks are pretty much at the highs of the session, and sink the Third Straight day of gains, that hasnt happened midjanuary or so. Modest,the gains are they represent a turnaround, and earlier in the day we saw stocks traded lower, with all that said, the range has tightened up a little bit. There is a 1. 1 swing in major averages between the highs and of the session, and you can see it is lower than recent days, but still a wider range than we saw last year. I should also mention that the volume today has been lagging, which is a switch from recent running low. S we have not seen a late they pick up in trading volume, but in terms of moving into todays session, Cap Energy Stocks lower. That has been the case all day, but we have seen oil come down a little bit. We have seen bouncing around in the visual groups and right now Consumer Discretionary staples and financials are helping lead gains that we are watching in todays session. On an individual basis, some stocks contributing ranking stocks, we got positive commentary from banks, on kbw and jpmorgan, and wells fargo rising, amazon is rising and hours a wall street journal was talking amazon to hospitals about becoming businesstobusiness clients. And under armour shares are rising by 16 . On the medical front we will have to talk about the amazon journal also the reporting walgreens was in talks to potentially acquire a portion , on 26 , soource those abc shares are up 9 , but Companies LikeCardinal Health was named as a potential target, at least not right now, down 3 . And then you have dental and supply providers being investigated by the federal trade commission for alleging that they are not providing adequate services to smaller dental offices. And finally, i have to mention blue apron. It is an interesting story because the stock is higher, but it turned lower briefly in the session, and blue apron coming out with numbers that shows that you should sell, but it also had fewer customers, but customers had a higher per customer profit. Spike ine saw a big the shares, which were heavily shorted, and in a slow fade route the session, although at the moment they are hanging onto a gain of 2 . Scarlet is quite the move for one day. Want to get you to first world news. A terrorist to set off bombs in new york and new jersey in september of 2016 has been sent this to multiple terms of life in prison he injured 30 people while one of his bombs exploded in manhattans chelsea neighborhood. Prosecutors say he hasnt shown remorse and is trying to radicalized fellow inmates. Is a naturalized u. S. Citizen who was born in afghanistan. Top intelligence officials told the Intelligence Committee that russia intends to metal with midterm elections, particularly through cyberattacks. National intelligence director says that threat of integrity to elections need to be addressed as quickly as possible. Doubt thatould be no russias past efforts were successful and views the 2018 u. S. Midterm elections as a potential target for russian influence operations. That noe director added Single Agency in charge of dealing with potential russian relying and efforts to cyberattacks will continue because they are considered low cost and low risk. Russian foreign minister is accusing the United States of trying to maintain control over eastern syria. He said today the u. S. Has taken dangerous unilateral steps and believes americas military operations are eroding syrias integrity by supporting power structures that are independent from damascus. He added that moscow has raised concerns with the u. S. European Council President says the issue of managing flows of migrants to europe will be a challenge faced for many years to come. Speaking in vienna after meeting with chancellor, he said that the austrian later had similar views on the issues of migration and says all European Countries to contribute to finding a solution. Global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Lets get back to markets with stocks clinging to gains for now. Our next guest of what is ahead of the curve depositions were extended and a pullback was likely joining us now is inky china binky. What do you see dan and are the stretched projections still stretched . Out thereinted were a number of traits that have become increasingly consensus, for particularly long oil, long euro, log equities in emerging markets and in short rates. A couple of days later we got the unwind, and i would it was a say is that significant difference if you look across those for trade and asset classes. Marketin a full equity correction of a temper simple back in both oil prices and in u. S. Equities in particular. What i would argue is that positioning our measures, which is based on the futures market, was warning three standard deviations on average, and is coming at two standard deviations, and i would say that is still very high. , we haveay in equities seen a major adjustment and positioning. There is a simple way of thinking about equity positioning that is not technical. Equity positioning has to be strongly correlated with indicators of growth, like manufacturing. Today i would characterize positioning within large segments of the u. S. Equity to an isn asponding 51, that is pretty low. 60, sorunning at 59 or it argue equity markets are over adjusted. Sorry. Julia it is fine, you are looking at performers of the s p 500, 10 year treasury yields, the euro, oil, you mentioned as well. Everything is moving together, is there one all in the same traits . When i was working in morgan stanley, i was told that is the sign of a healthy market, and you said, this is a huge warning signal. Absolutely. Julia based on correlations, without looking at valuations, where are we today . I have an update on the piece. Correlations collapsed because what has happened is that oil and equities down pretty sharply. Moved the worst point, it was down 2 . As far as rates is concerned, it moved the other direction on just a couple of basis points, that is why correlations collapsed. Julia you are saying there has to be real adjustment on words and equity prices to tie with what is going on as far as the fundamentals . What i would say that is that it is a good idea of being aware of extreme positioning because when positioning is extreme, i would say the fundamentals better deliver for that position, otherwise, you could get into an unwind. I think today, especially given what is going to happen tomorrow and the data that is going to come out, one thing to keep in mind is inflation. Everybody is talking about inflation and inflation is the bogeyman that will pull the equity market down. I would point out that the positioning in the rates market is extremely short is a shinning short positioning. In a situation like that, inflation will move up, but if you get disappointing inflation, theres a good chance you will move significantly other way. Speaking of inflation, you mentioned markets and investors were surprised by the rising wages we saw the jobs report in early february. They have been worried about rising costs for a while now, for a couple of quarters. I would say a couple of years. Is the focus more on productivity improvements or on raising prices . They are responsible for determining how fundamentals work. Isi think the short answer in terms of how you respond wage pressures, i think it is important to keep in mind that it is about the future. Decide a strategy to what extent you think you will be able to pass it on in terms of prices. Other costs goas up, especially as we go later in the cycle is definitely a big part of the strategy. And equity markets we talk about inflation and this mysterious and it isation generally good for margins. Cycle,also late in the the labor markets are tight. If we are going to have strong growth and the forecast is for strong growth, at least for quite a while here they you have to ask yourself visible question of how our corporates going to produce . Without being able to hire additional labor . And it will have to come through higher productivity and using the existing labor force more efficiently. And really doing more capex. Of it argue strong growth is already happening and it is extremely rare has are great for unemployment to be below for the half percent, and it appears to be close to 60 and you need capex to square the circle. Julia can we make predictions of the volatility we have seen volatilityel of al Going Forward . Would basically say the u. S. Equity market was overdue for and was certainly position for in the sense of extended positioning for a pullback. I would call it a normal three or 5 , and that is what we got on the payrolls, whether it was rates, inflation, these are all up for debate. At say the following monday we had a blowup of as a result of what we had the Options Market and as with structured products. Largehen led to a rather swing in the next couple of days, and then thursday we had a broadbased Risk Reduction of across the market. At the end of the day, what i would say is what began as a normal pullback got amplified by butstructured products, from the fundamental point of view, given volatility has risen intoolatility is an input Risk Management models. Will last as up, it while, so i would say another five or six weeks before we get back to where we were. Julia great to chat with you. Coming up, another shakeup, this time at blackstone. What the Management Changes mean for blackstone Going Forward. This is bloomberg. Julia this is boomer markets. This is bloomberg markets. Has beenjohn gray elevated to the president and ceo of the alternative investing giant, along the promotion it was announced that blackstone president tony james has become executive vice chairman, so what does this mean for blackstones future in the competitive world of pe . Joined us now from the boston bureau, melissa, with these pe firms, many of them with founder still in place, we are concerned with looking at Succession Plans, was there pressure on blackstone to set in place a Succession Plan sooner rather than later . That is a fair thing to say. Was a disciple your for succession, and it laid out plans for future leadership to varying extents. But at the same time this is a personal thing for the firm. I think many things are happening at the same time just by nature of where the private equity business is. Gray has been rumored for some time to be a so i wouldnt, say this is out of the blue or expedited, i think this is definitely been a topic of conversation has been going on. Whether or not it moved a couple of months or a year, it is hard to say. Anything to change anything about the Management Structure on the daytoday business the company does . Extending this is from a dual to a treo, tony james is still involved with the firm and i will say john gray is responsible for managing daytoday operations. I think the structure of the m, i think a part of this the comments of real estate, john gray will retain his position as chairman of the investing committee for real estate, so you will keep his hands in that aspect of the business. This is certainly a huge promotion and certainly a new chapter for the Worlds Largest private equity firm. Scarlet that makes the question, what do we know about john gray . He is 48 years old and he is been with blackstone since 1992. What is his track record and what does he bring to the table . We refer to him as mr. Blackstone, he joined blackstone straight from college, and he joined their mergers and Acquisitions Group and send out to help their list eight efforts at the time, and yes built that business to blackstones largest asset and manages 150 billion. Deal is a 39 billion hilton that is one of the most successful from a return perspective from the firm, so yes had this hands not only building in this business from scratch, but also with some of the most successful deals blackstone has ever had. He has been on the board for a couple of years now, so the succession has been a long time coming. There are many qualified candidates at blackstone, a deep bench of potential successors, but this is the one at the forefront of peoples minds for some time now. Julia what do you think is his biggest challenge . He brought incredible real estate business of assets but what you think is big challenge is going to be Going Forward . He certainly has his hands full, not only managing the Worlds Largest private equity firm, it includes their hedge funds group, the credit group, but they are extending to a number of new businesses. They announced an insurance solution business and a 40 billion infrastructure to race. Into retailng clientele, and i had the chance to speak with him and he said we are interested in possibilities extending into data and use of information and smarter ways. I think there is a lot on his plate. We will see how that shapes up in the coming years, and like i said, this is not him alone by any means. Tony is still there, steve is still there. Melissa, thank you so much. A reminded that you can catch our interviews on the bloomberg with the function tv. Julia correlations were high and that collapsed. Expects that the volatility for five or six weeks, so we will see. Julia this is bloomberg. Julie things feel a little bit calmer today, but they want mrs. Early stay that way. They would necessarily stay that way. I want to bring up this skew index that looks further ahead, it is the white line. People arelling that putting more tell Risk Insurance, it has been elevated compared to its historical standards, but putting on tell Risk Insurance when the market has moved come percent, doesnt not as early the it is showing a 23 level, so that is showing you what are you putting on tell risk when it should be lower than where it is. The inverted curve is showing that people still have a lot of uncertainty and worry, but it should abate. Julie is it a matter of time . Continuing to digest this volatility shock . Everyone was caught by surprise by this, and it took us three days to shock us at the 11 , last time we had something that played out over eight trading sessions or a month, and for to happen so quickly and episodic lee, it is going to take time to play out. Happen, weeeing it are up a hundred points, down 100 points, and you are talking about it all week, and it is vacillating so much. We have been averaging 85 the last two years, so seeing it at 140 over the 85 average is telling you it is going to be here for you while, especially because people are trying to digest where they want to but rising Interest Rate environment, if labor is going up, why should utilities be trading at 30 pe rentech is trading at 25 . Speaking of tax, we have a minute left, nvidia is what you are looking at today. The stock has been volatile. They are up 10 , and this is ist stock, nvidia as at around 2032 and you are going to get paid 4. 2 on that, but most of the stock risk is taken out because they reported earnings and that been doing exceptionally well, so this is a great strategy. Julie you think it will be a bitcoin proxy . Somewhat, they are focused on ai gaming and the time us. Even if the corn is going up, there are other commanders of the stock. Julie thank you so much, scarlet. And excuses interview with the ceo and chairman of Goldman Sachs. This is bloomberg. Retail. 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