Reporter is the end of the of the, it is the end quarter, some calling it the everything rally. Look at the s p 500 of 4. 5 , bitcoin surging up 208 , the best since 2017. Gold and the 10year yield rallying the most since 2016. The 10year yield opposite the price. Bonds are rallying, risk assets and safe haven assets rallying at the same time good one that is not is the dollar, which is down the worst more than 1 on the month and a quarter. This is a monthly charge. In the monthly range you see it has been stuck in a range between the buyers and sellers, for 2018 and 2019. The dollar index below the 200 day moving average, clinging to the month average, suggesting you can see it go on, even the dollar bounces higher. Reporter not only the Second Quarter but also the end of the second half for it you add together first and second and put it all together and pretty much everything is still in the green. Look on a half year basis, we are still getting the everything rally from stocks to bonds to commodities great you have crude oil leading the way up 30 percent this year, then s p 500 up 17 , but you have global ,tocks, european stocks, gold highyield credit, investing great credit and treasuries. If we bring it back to stocks, the s p 500 has surpassed wall street strategists yearend target. There is reason to think we could still end there because in the past we have seen strong firsthalf rallies but never seen a match. The only because it is hard to imagine getting a 17 gain but because four of the five times we saw these rallies, we also saw a decline. With the g20 meeting, payrolls next week and another red meeting next month, we should get hints where we are going, going forward. Stephen great thoughts caroline great thoughts as we go to the court the close. I want to take it to you because you have interesting thoughts on the said and how much they may or may not have priced in to the fixed income market. With respect to what has happened this week, month, quarter, how would you assess the stock market in terms of what it is pricing in . The market knows or believes there is not a recession is that it. If you look around, people dispute whether the fed has power and whether the rate hikes are doing anything. If you look at the past few months, it shows you the fed does have power. One of the things we are talking about is absent tariffs, we dont see a reason for recession unless the fed messes up and tightens to quickly or too far. Too far. Ickly or it is good for stock in the near term. If Economic Data improves, it which you are seeing global data improves, economic surprises in the u. S. Are moving up in the eurozone and asia le eyes are e. I. s are rising. Would be a reason stock markets have trouble closing the year, not a surly down but a headwind like 2018. Joe talk to us about positioning. We got the move quarter end. Prior to may it was a constant meme or something people were saying underinvested or got caught offsides because of the selloff and playing catchup. How are people viewing this because it seems mixed, people long, hedging. What is the stance . Cameron it feels on the equities side, trade, people havent got it. The tariffs shocks of last month stared scared people because it was reminiscent of a Fourth Quarter of last year which obviously fed on itself throughout the quarter. The way it has traded this month has been pretty it has been impressive and been pretty relentless. Some of the survey suggests people are airing on the side of caution. You have to take that at face value given the price action. Fixed income, the opposite. People have filed in, havent been challenged at all by buying bonds. It costs you money if you are a leverage investor to hold front end treasuries because of the higher than so much the yield. At some point it will run out of steam. The irony is in those markets you can borrow and finance negatively yield bonds below the level of those bonds. Inll a positive carry trade germany whereas it is negative carry trade in the u. S. It has to keep going take make just going to make money. Has to keep going to make money. Romaine this wasnt an easy first half. You had to gut it out to stay in this group people liked this, and i am wondering when you look ahead for the folks that already are invested in this market versus people who maybe are moved or allocated something to the sidelines, what do you tell them going, do you got it out and hope it works gut it out and hope it works out . Brent i think there is a change in the cards coming forward. Investors at the end of a cycle, when trends have been in place tend to ignore markets that havent done well. I still think, we believe places Like International development and emerging markets are cheap and a catalyst. One of those would be tariff wars subsiding wars subsiding. That has held them back. Latereminds me of the 1990s were no one wants to invest in International Stocks and everyone you the u. S. Would be the best everyone knew the u. S. Would be the best going forward. Caroline where are you on commodities . They are ahead against inflation. We dont think the Economic Cycle is different. There has been talk this is how it will end difference. There are three things that happens before a cycle ends, the u. S. Economy runs out of slack, inflation rises and Federal Reserve raises rates. To get inflation to rise, which we think it will, commodities have to perform at some point in the cycle. You mentioned treasury yields being low. We think commodities are ahead against the opposite side which is inflation moving high because fixed income doesnt have much inflation hedge within it and start the upside the initial part of that equation because they are dependent on the discount rate. Nice to get your expertise, thank you. Cameron crise as well with all the updates on negative carry. That does it for the bell. What did you miss his next. Caroline i am caroline hyde. Romaine i am romaine bostickromaine . Caroline here is a snapshot of the rallycaroline . A rough day for the quarter. Joe what did you miss . On the wayore cuts for Deutsche Bank. All eyes on President Trump and president xi. President trump sounds optimistic while president xi doesnt preclude gets crushed, oil doesnt. Crude gets crushed. As Deutsche Bank passes the feds stress test, bloomberg learned they will cut as much as half the Global Workforce in equities trading. For more, lets get more with michael moore. To a certain extent we know job cuts are coming and have been drip sent to us. What was new in terms of the shift scale . Piece is an new acknowledgment that the equity trading at Deutsche Bank is not profitable on its own. It had a loss last year but Investment Banking as a whole is not making a lot. What we need to help our other businesses . What can we keep and can we get rid of the rest of . Joe is there something about this that makes it performs worse than others but or is it just to take and it could be profitable at a smaller size . Michael what they say about equities is it has gotten so electronic it is a scale game. If you are not in the top three of a certain product you are not making money. The top three are profitable and beyond that you are trying to break even in terms of your cost of capital. It is really about can we have a smaller business that helps our wealth manager, investment bank, that does enough we dont lose the german corporate or european corporate business that doesnt have as big of a derivatives portfolio and other pieces. What is sort of the scorecard for what they have proposed . Michael i have gone through quite a few turnaround efforts, and i think the stress test is a big market favored finally passing that. It is a lot to be determined still because they havent come out with a unofficial plan. Caroline lets turn our attention to other banking stories. Interestingly and unsurprisingly Elizabeth Warren is sounding off on the banks and taking on jamie dimon, to do with exportation of the consumer with going for arbitration rather than taking to the court. Is this something jamie dimon has to respond to . He has not. Michael this has long been an issue near and dear to Elizabeth Warrens heart. We dont expect jamie dimon to engage on this. The bank has said customers can out if they want to. It will be something Elizabeth Warren continues to go after banks for and many on the democratic side. There was a rule in place to ban these and trump got rid of it. Joe Bloomberg Finance editor, thank you. Turning to oil, European Union is navigating around u. S. Iranian oil sectors. The mechanism for the workaround known is available to all e. U. Member states and is processing transactions area crude to the dive after the news. You can see it there. Joining us to discuss the ramifications is the head of supporting security reporting. Explain this workaround, how does it work . Reporter it is a lifeline to the 2015 Iran Nuclear Deal after trump pulled out and started placing sanctions basically on all Business Done with iran. European nations that were interested in keeping the agreement alive and defend it need to find a way to get around u. S. Sanctions and allow some sort of trade to occur with iran that doesnt involve the u. S. Financial system and dollars and things. They tried to create this mechanism to allow some sort of trade in humanitarian goods. It is interesting they finally got it off the ground today or announced that it got off with some trade. The impact is expected to be limited. There is not a lot of companies willing to risk sanctions from the u. S. To do business with iran. Romaine will it be enough to keep the nuclear deal together without the u. S. . Probably not. The Biggest Issue right now is iran is about to surpass limits on the amount of low enriched uranium it has an heavywater area the u. S. Has banned. The u. S. Hashas banned stuff, so if iran continues with any Nuclear Program at all which has been allowed, they will pass those limits in the early early july. That would put europeans in a very difficult position of allowing iran to breach the deal but look the other way or leave a deal they think is still the best way of keeping irans Nuclear Program in check. It is tough great i dont think the trade agreement will be a life saver for the 2015 agreement. Caroline what about some sort of left for the economy of iran and dialing back tensions that have been inflamed in the region largely because the economy is on its knees . Reporter it is. A lot of it will depend on the volume of the new mechanism the europeans are talking about. Is iran able to get the type of medicines and basic foodstuffs that it is having a harder time with because of the u. S. Sanctions . It is very early days in determining whether the volume is there to make an impact on the iranian economy and they are looking for something to be ramped up quickly. Not clear if this mechanism can do it. Romaine bell ferries joining us from washington. The first round of the democratic debate is over. Did anything change . We will ask a former member of Hillary Clintons 2015 campaign staff. This is bloomberg. Over two20 candidates nights, the impact remains to be seen. Here to take us through the debate is a man who worked on capitol hill as a Communications Director for the former Senate Majority leader harry read and as a Campaign Director for Hillary Clinton in 2016. We all watched this, we saw love and hate and everything. Did we learn anything about what the Democratic Party really wants to be and what it will look like . I think so. One of the things people talk about are the points of contention, where they were fighting each other but there were also serious policy discussions especially around issues Like Health Care which we as a party are trying to figure out what our position is and what nominee we want, what we want to advocate for going into the 2020 election. That was a serious discussion, clarifying. We got to learn where they all were, and democratic voters got that as well. Joe the big moment was kamala after front runner joe biden. What is your take on the effectiveness . Every poll has had him pretty substantially ahead. Could this undo that . At hisle are looking candidacy wrong. People know him but also like him in the democratic primary electorate. Thinking about there will be some large swings that will come from this debate, that is not how this will go down. If joe biden is going to lose this nomination, it will be a slow, painful leaking of support over six months. We may have seen the beginning of it last night with, let harris taking a pick ax to him on the debate stage. The question is for, let harris and for any that will take on joe biden if you swing me ask, does the support he lives go to you . You . Lose go to not sure if she will benefit from that. I am not sure. A candidate like Elizabeth Warren could pick up the pieces when joe biden starts to get shattered. Caroline it seemed to be a tussle between Bernie Sanders and Elizabeth Warren. Many are frustrated they didnt see her versus the bigger players great how did Bernie Sanders come out . I said if he still in this debate . He was completely overshadowed by a lot of the other candidates whether it was joe biden and Kamala Harris or pete buttigieg. It seems when bernie is one of 23 as opposed to one of two like in 2016 he is having trouble breaking through. We are seeing the beginning of that last night. Romaine you were involved in the 2016 Campaign Good one of the mistakes made it on a lot of levels was underestimating where the electorate stood and where they felt and the visceral reaction to certain issues. Is the Democratic Party at risk of making the same mistake that maybe a lot of republican candidates in 2015, 2016 made in underestimating how fiery the voters were not realizing someone like trump was a great vessel . If you look at the results of the election, Hillary Clinton won the popular vote. There are more of hours then theres that romaine electoral process. If you look at the 2018 midterm elections, you had democrats winning by 10 points over republicans overall in terms of who came out in the electorate. Voters are fired up but it is our side, not their side. The process is going to figure out which of our candidates we are most excited about so they can go up against donald trump in 2020 and win. Scarlet do you think joe we are going to get rid of private Health Insurance or they will all be eligible for national Health Insurance could be challenging for whoever emerges . Potentially but the republicans have are calling everything democrats do whether joe biden or hickenlooper or Bernie Sanders or Elizabeth Warren, they call us socialists, crazy, you know, on issues like immigration. No matter who it is they will attack us. We have got to do what we will do, recognizing no matter what we do they will hit us. I wouldnt put stock in two things like that into things like that. Caroline thank you for joining us. Rapid response director for Hillary Clinton. Beer helpingf constellation beat expectations been looking at that performance next. This is bloomberg. Next. This is bloomberg. Dozen air force f22 self fighters have been deployed to the persian gulf state of cutter. Strategic bombers were deployed and response to heightened iranian threats against American Forces in the region. A Senior Iranian official says a meeting in vienna with tehrans remaining partners in that landmark 2015 nuclear deal with world powers was positive and constructive and that a complex barter type system that European Countries have set up to keep been with iran afloat has operationalized. He added there is still work to do. Is a stepay it forward compared to the previous meetings we have had. I will certainly report back the progress we make in this meeting and the final decision will be for toronto take. Tehran to take. Supremacist white apologized today before being sentence in life in prison for the 2017 car tech and bill virginia. He delivered lee drove his car into the crowd that had gathered to demonstrate against a White Nationalist rally in charlottesville. Antiracism protester Heather Heyer was killed and two dozen people were injured in that attack. The nationse in Largest College admissions scandal. The Justice Department says jeffrey will admit to paying 50,000 to the university of Southern California and 200,000 to the scams mastermind to get his son into usc. Is the 34th parent and 51st person to be charged in the scandal. The acting head of the department of Homeland Security welcomed the congressional action that would send President Trump a Bipartisan Senate draft a for her and a half Million Dollar measure to care for infant refugees and migrant refugees detained at the southern border. The emergency legislation required to ease overcrowded often harsh conditions at u. S. Holding facilities, seeking a sound from Central American nations like honduras and el salvador, passed by a pie part by a bipartisan vote yesterday. Reporting, to children are receiving access to key supplies, including appropriate meals, blankets, showers as soon as they can be provided and medical screening. President trump has indicated he will sign the measure into law. Global news 24 hours per day on by and on twitter powered 2700 journalists and analysts in over 120 countries. I am mark crumpton, this is bloomberg. A reason to celebrate happy hour. The companys modelo beer brand a standup. We have the Senior Research analyst joining us now is now in the studio. What is it good that they got so right . The brand has had a lot of momentum. It is growing off of a small base when you compare it to a brand like bud light. Been able tohave reinforce authenticity of that brand where both corona and modelo are mexican brands. A lot of that advertising on spanishlanguage media, but expanding into a more general audience and the sport giants have really worked. On how theya lesson drove modelo for large other Consumer Group that other Consumer Goods Companies . They just dont want the big generic brands people havent been eating eric eating or drinking. When we do our own proprietary work we see the corona, della family of brands over index with 18 to 30 for 18 to 34yearold consumers, where legacy brands like the Miller Family over indexes to over consumer to order consumers. If you can get those young consumers benefiting from democratic midshift, thats what you lean in on. Aboutking experimentation, consolation has taken the pledge the plunge into cannabis related products. You are saying they were pretty clear on how that has been performing. Out pleased to hear the he waslation ceo saying canopys stock was down. You are seeing constellation shares trade in tandem. They are the single biggest shareholder. If they are disappointed they need to come out and say that, that, because what it does you wrote that while sales for canopy are doing fine, they are spending money like crazy. In theory this is a big growth business, so why not spend . Is there a suggestion there is not as much bank for the investment bug right now as there should be . I think consolation management is presanguine about global capital, about the opportunity. They didnt lose 90 million. There are so Many International markets, including the United States for may drive cbd perspective from a hemp drive cbd perspective. You covered this space in space, cannabis related they are actually seeming on the probability path that much faster. Their cost structure in terms cannabis is better. That flows throughout the bottom line. They are not making as Many International bets. Their internationally focus. Collect going back to the pure , is it largely about that cost, or is it other aspects of the Market Structure in canada, the number of competitors that the provinces get that really stand in the way to sustainable profitability . Is about getting your cultivation up and running, so you can get operating leverage and drive down that cost. Gross marginrted was 16 . It was 40 if you strip out all the stranded overhead that hadnt been utilized. We were pleased to hear the cfo reiterate the pathway over the course of fiscal 2020 to get that gross margin. How they got into into bed with constellation brands, when does this really when does this reap rewards question mark when do we see the drink somehow come somehow catalyze their own question mark they dont sell beer in canada. It could be disruptive to the number one beer player in canada or the number one to put that or the number two player. We did think on the call today that the constellation cfo may have tempered a bit. We call this the eps accretion they were clear and explain why they were committed to helping canopy achieve the targets in canada. The momentum in terms of International Opportunities unveiling themselves may be a driver to push out that etf. The canadian government recently came out with regulations for other forms of cannabis aside the flower including edibles. How big of a deal is that going to be . If the Canadian Consumer looks like the u. S. Consumer its going to be meaningful. Flowers the biggest category in the u. S. If you look at a market like california, actually 30 of sales. Cooks fascinating stuff as always. Thank you very much. Coming up a much anticipated trade to stuck discussion between President Trump and president xi jingping. The preview of the g20 is next. This is bloomberg. Headlining this weekends g 20, u. S. And china trade talks. Seems to xi jinping have President Donald Trump on his mind without explicitly mentioning him. Some insight with the senior counsel on foreign relations. Great to have you back. Lets start with the basics. What is aew, realistic sunday night conclusion. Think the baseline expectation is straightforward. The u. S. Will agree not to go forward for a final ground final round three hunter billion tariffs. China will agree to resume talks, even if the u. S. Doesnt rollback some of the measures that have been introduced over the last six weeks. Presumably there will be some goodwill gestures, such as the purpose such as the purchase of soybeans announced today. What the u. S. Ones, or we think we know with the u. S. Wants. What does china want out of this . In the short run it was talks to resume without a loss of face. You think the u. S. Is going to give that to them. That is why president xi more or less insisted that President Trump come in ahead of the meeting commit ahead of the meeting he wasnt going to raise tariffs. He wasnt going to have the president go off and say tariffs are back on. China wanted a commitment from the u. S. That indicated there would at least be a shortterm truce. China wants the u. S. To rollback the tariffs, it once the u. S. To lift the designation on huawei. And they want to return to the pretariff status quo. It might like more access for chinese investment. But i think the baseline goals of china are to return to the previous truck previous pattern of trade. Collects the huawei in this, we saw him dial it back. Reality, evena though Many Companies deliver just fine by certain legal loopholes. I wouldnt go as far as to say this designation doesnt matter. The following sales are quite significant. Workaroundsk the are complete. I think the interesting question is whether president xi will insist on some concession from President Trump on huawei as his price for the negotiations. My gut is he hasnt. You wrote a provocative piece. We think of President Trump as being the prime mover behind deglobalization, the end of free trade. You argue that xi jingping or china itself is just as much a phenomenon,to this or xi jingping is just as much a contributor to this phenomenon. China potvidence is falling share relative to import growth. If you look at chinas imports and many factors over time, and adjust for those clearly tied to chinas exports, they tended to fall as a share of chinas gdp. If you look at u. S. Manufacturing exports, in 2005 the u. S. Was exporting about 2 of chinas gdp and manufacturers to china. In general chinas demand for manufacturing imports has grown more slowly than chinas economy. That to somean tie chinese policies. Suggestchina doesnt globalization. It suggests the opposite. China has wanted production for the Chinese Market to be in china. How ready are they to do that . It seems when you look at the relationship in the u. S. , they are going to have to hasten that quickly, or theyre going have to be left behind. It completely varies by product. To ask the following question, did chinas postcrisis construction bill lead to a sustained increase in u. S. Construction equipment exports to china . The answer is no. He was Construction Equipment exports to china peaked several years ago and were now below where they were in 2007. If you ask a different question, can china survive without importing u. S. Semi conductors right now, the answer is also no. Where does this leave the rest of em . For many countries who export to china are crucial, if china is fining a does need to import as much from the u. S. Or anywhere else, the u. S. Is d globalizing, what happens to the Business Model of all these other countries whose market and economies have been fairly unimpressive for years . Clear, my argument that china is the globalizing, it is meant it is limited to manufacturers. Global capacity has expanded, so it is no longer providing the. Ame positive pricing asian manufacturers face pressure. They face pressure from china well below well before the trade tensions. Added risk that some of the adaptation that is going on in response to the tariff could trigger a further u. S. Response. Been a clearly has winner, probably the only winner out of the trade war. That has caught President Trumps i and he is starting to criticize vietnam. To get your expertise ahead of g20. A look at some of the stories trending across the bloomberg universe. The cooler weather and moisture has been covering much of the but all theing other ski areas in the state are closed. Story. Rg. Com has the and since the early stages are considering options including a insiness next year between he 14 for 442 money dollars. And an island in norway was to abolish for safety nine days. Set from may 18 through july 26. You can follow all the stories on bloomberg. Com and on twitter. And vegan burgers continuing to cook up attention. The u. S. Secretary of agriculture visiting impossible foods for a taste test. Have you tried one of these things yet . Background, he likes the meat i mean look hes got a job to promote the grain just skip the middleman. The fact that the impossible burgers, they say their burgers with how water he stands with the whole environmental issue. Is 2019 im glad hes gone there. Rubenstein ar from woman led firm and Investigative Company focusing on healthy eating. This is bloomberg. Melanie rubenstein is the daughter of carlisle Founder David rubenstein. She spoke with Erik Schatzker about her woman led firm. I grew up as daddys little girl. I loved everything he was doing from the moment he entered it. I think as children you are a sponge and you love the dinner conversation, you love hearing the cool products you might bring home. I was lucky to travel with him overseas on several trips. Do you worry about the big shoes . Not at all. Walk me through that thought process. I always tried to have my own identity. As a ski racer. After college i moved west and ended up very lucky and entered into the investment place by a mentor of mine who was building a family office. That led us to alaska. Of both worlds, how do you combine your two passions . Tree is our asset manager. We call it from source to plate. We focus on founder led or familyowned companies with revenues around 50 billion. Why is the opportunity there . Its something ive personally been following the past few years. We have been around 8. 9 . When you have an ipo, whether it was bluray or there is a lot of excitement there. Hard to find a person that isnt going to try to eat a little bit healthier or try food as medicine. This, the opec plus meeting takes place in vienna on tuesday. Close u. S. Markets are for fourth of july. Bloomberg technology is up next. Have a great evening, this is bloomberg. We have a different approach to government. This is the moment where the new rules are going to get written. I am emily chang in San Francisco and this is bloomberg technology. Apple moves manufacturing of its new macbook pro computer from the u. S. To china. The timing raising eyebrows in the midst of the u. S. China trade war. What signal is apple sending . Plus bitcoin breaks through 12,000. Optimism over facebook helping to push