The s p is fairly flat, up by 1 10 of 1 . 1 . We are keeping a firm eye on brussels. European leaders are at work again. They just started there may meeting to decide to leave the European Council and european commission, and by extension, the European Central bank. The current head of the imf is being talked about seriously as a contender to take over from mario draghi. Lets get the latest from maria. The main meeting has started after a series of side meetings. What we know on account of how much information we have at this point . Maria in terms of official information, we have nothing. It is speculation swirling around. Weve spoken to a number of diplomats who say Christine Lagarde is being considered to her crate replace mario draghi. She was now the name of the running yesterday, but appears to be now the frontrunner. Conditionality, if Angela Merkel manages to get her defense minister to become the next commission president. Surprise. She was not on the list. The good thing, it shows there has been progress and they have convened all the eu 27 leaders and theresa mays now in the room to figure out where they go from here. There is growing momentum when it comes to the European Council that Christine Lagarde will be nominated for the European Central bank and get tokel will leave the European Council. Guy an amazing turn of events. Thank you very much. Maria will continue to keep us updated as the story develops. For more on the future of the ecb and what is happening with anna terry policy, we need to talk about the fed as well, we have the subsidy group global chief, exit strategist. Monetary policy is critical at the moment. You have the situation developed with the fed, from your point of view, as you look at european would a Christine Lagarde ecb look different to a mario draghi ecb . I dont know whether it would. What is happening is essential ks are trying to row back roll back from qe and go into a world where Interest Rates are higher and interns is the next cycle. It hasnt worked out. Now, we have a very dovish fed. We have an ecb aggressively steered by druggie mario draghi, and the chinese are all leaving. We also have fiscal policy as well. Weve gone quickly into a world of what i call qe plus, you plus, easing on the monetary and fiscal side. Guy what is the right investment if youre headed back into that world . If we had back into the qe playbook of negative Interest Rates, what is the trade around that . Jonathan it depends on how much balance there is from fiscal. That is the unknown quantity. Enter bangs are there to protect against instability Central Banks are there to protect against instability and price stability. They have never been there to generate upside risk on growth. That is where fiscal comes in. We have a world that has been quickly dominated by the monetary side. That is why we are seeing bids,st rates, while treasuries below 2 gain. Supportedgrowth is nominal growth at a reasonable level, despite the headlines. Equities are an asset class that will benefit, and the yield pickup into equities, providing there is a minimal level of nominal growth to pay dividends, is very attractive. You can have a situation where rates win, credits win, and equities went for a. For a period of time. Guy when is that period . For the moment, you say it is working for you if you in the market. We had a pretty good start to the week and an amazing month. How much more gases in the tank there . Jonathan it is liquidity that is driving all of this. The key question remains, for all investors, is this a cycle that is about to end . The fed either cuts at the end of the cycle, too late, or it cuts during the cycle, not too late by definition. Cuts,are going into fed are they cycle extenders or is this the end of the cycle . Guy so that is a key point. Looking at the rate of change at the manufacturing pmis, it is terrifying. If you look at the surprise indices, they are dropping rapidly. The Economic Data seems to be changing. Its the Second Derivative that has changed. It has been slow for a while. Why are we not heading for recession . Why are the cycle extenders rather than the first cuts that come as a result of a recession . The curve inverted, all of the signs are there, the date is confirming it, why is this not a recession . Jonathan the data has weakened, trade has been a big part of it but it has been very weak this spread to nonmanufacturing as well. There are concerns from the yield curve. Central banks and policymakers recognize that. There is no guarantee. We are not heading into a recession, but we have a reasonable level of growth. Our own forecast for the Global Economy this year are 2. 9 percent growth. Next year, 2. 8 . Risks,s significant escalation of trade wars, notably, in the absence of that being delivered. Growth is still running as a regional at a reasonable spread. Guy Central Banks normally kill recession normally kill expansions. Trade, aaused by manmade, selfinduced story. If the flipside is that we dont get further news on the trade narrative, how much of an Economic Impact will that have . At the moment, companies are cautious with their spending, particularly if they are buying kit. How much of an effect . Me,told me the ceo the ceo, that i didnt have to worry about trade, what is that have . Jonathan thats everything. Largelyticians are wearing that, it is their responsibility for the lack of confidence and investment. Tois easy and difficult solve that at the same time. The u. S. And china, at a certain point in their relationship, are at a certain point in the relationship, and we have exit in europe. Brexit in europe europe. The key question for investors is, whether a combination of centralbank action and political rationality comes together to provide this nominal growth. Guy lets say we dont get the latter but we get the former, is the fed cuts enough . Jonathan if you dont get a big step up in the trade war between u. S. And china, getting full tariffs, you hit 2 Global Growth, so you are seeing a significant drop down in Global Growth if you see fullblown trade wars. We not heading there. Guy the market is pricing in fed rate cuts. What effect will those fed rate cuts have . Will they keep the market story on track at this point in time . The bond markets moved aggressively to the downside. Where does the marginal advantage lie on either side of that . 60 40, inning a rebalanced a little bit into the bond story. Talk to me about what is going on in terms of the policy action talked about and how that will affect my investment. Jonathan we talked previously about this world where investors are finding it hard to invest in hard to have an investment horizon with certainty. The allocation is light, happens collectively, so crowds are moving together and moving on headlines. The headlines over the last month have been market supported. Thats the direction of travel for credit for equities and rates for credit, equities, and rates. Ago,cently as two weeks our u. S. Equity since midmodel was on the panic frontier with the s p at 2900. That is reflecting a broad range of indicators and reflecting Investment Community that is still low. Historically, that has been a good buy signal. Ask month, less, sure. 2020, last are month, less, share. When we fall into the 20 20s, 20202 i talk about this melt up and meltdown. We are in the camp of the cycle is continuing. Markets is 1995. Ofreturned to a period sinker nice Global Growth next year. Backing an a sending cycle takes you into more of a melt up camp then a melt down. Than a meltdown. Guy 36 bits on a german tenure bips on the german tenure, that signals to me the situation is grim and the european economy wont be growing. How long to these two Asset Classes perform . Jonathan the european economy is in a fragile state, but still 1 or so gdp growth this year. With the expected additional ,olicy impetus from the ecb that one can creep up to 1. 3 next year. Its all about the future policy action and its impact on growth. If we have that happening, the outlook for equities is pretty good to strong. The ecb acting with fiveyear fiveyear at 1. 2 , if fiveyear fiveyear is going higher and the pressure to act is not there so much, bond years are heading higher, equities in a better place. If fiveyear fiveyear is lower, they are going to hike more than the current that suggests. Guy jonathan will stick around. Jonathan stubbs citigroups global and u. K. Equity strategist will stay with us. Lets take a look at the u. S. Markets right now. We have seen a significant move in the bond market over the last 10 to 15 minutes. U. S. Equities are going nowhere in a hurry today, as you can see. Therage s p, nasdaq average, s p, nasdaq are all trading to the down line. We are 16 minutes away for 18 minutes away from the close. The ftse is outperforming. It is the big defensive names doing well today. This is bloomberg. Guy from london, im guy johnson. This is the european close. Lets get a first were news update. Here were the details is tommy donahoe. Lavrov is urging iran to carry out its obligations. Tehran acknowledges it stockpiled more enriched uranium than it is supposed to. Lavrov also says europe should offer Economic Relief u. S. Sanctions to iran. In hong kong, they are cleaning up after protests left a legislature ransacked. Debris and empty teargas canisters are littering the streets. Hong kongs china backed leader vowed push against further violence. Hundreds of right Police Chased away protesters who invaded the chamber. China is speeding up efforts to open up its industries to overseas competitors. Said for ownership of futures businesses and Life Insurance companies will be allowed by 2020, one year earlier than planned. Said detainedaoc migrants were told to drink water from toilet if they were thursday. Border patrol of using psychological warfare. Global news, 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Abigail were looking at small gains for the major averages in the u. S. ,he s p 500 is up fractionally flipping between gains and losses. The russell 2000 is underperforming, down about. 6 . It will be interesting to see if the s p 500 can climb for a fourth day or fall back down following the smallcap index. Stocks 600 is up. 4 . Emerging markets are flat. Investors are consolidating gains induced by the trade truce between the u. S. And china, trying to figure out whats next. Thats ahead of the jobs report out on friday. Lets take a look at oil. On the day, oil is plunging. You can see a sharp falloff about down 4 . The worst on pace for the worst day in two weeks. Some of the gains we have seen and more recently around the possibility of the trade truce between the u. S. And china seems like maybe we are seeing seldom news around the less liquid risk asset. If we take a look at the imap in the s p 500, oil plunged on the day and is influencing the sector makeup. Or sectors are higher, but on bottom is underperforming. Energy is down 1. 4 . Materials and financials is also there. Financials is lower because yields are down as the investors are reaching toward the safety of bonds. Those dividends look better with global bond yields lower. Guy, as for some of the movers beneath the surface for the s p 500, apple is up. 6 for a second day in a row. Suggesting some investors are hopeful a trade truce will stay in place. They receive 18 revenue from china and supply chain is deeply embedded within china. Verizon is up, one of those high dividend stocks. To the downside, energy is the worst sector. Take a look at chevron and eggs on, two of the worst stocks exxon, two of the worst stocks. Guy its fascinating, the turning round we are seeing ash turnaround we are seeing in the markets. Turnaround we are seeing in the markets. With Jonathan Stubbs , an equity strategist. Earningsming into the season. The u. S. Market, the s p, is trading circa 17 times one year forward. The average is around 14. In order to keep the equity market rally, how do we get the p orto the p up to the bring into a normal number . Jonathan Global Equities are trading around 16 to 17 times. The u. S. Is 17 times. 50t is in line with its year average. Global equities do not look expensive. A look cheap. U. S. Market trades on a 5 Free Cash Flow yield. If tenure treasuries is up two in the core sector is generating cash yields, providing that cash flow is happening because we dont have a growth recession, and equity arc it is supported and dividends will be paid. In the cycle, share prices in the u. S. Have tracked dividends per share. The u. S. Is one great advantage over the world because Corporate America is buying back its own stock, and therefore, the number of shares is reducing. The eps or dps gets this incremental boost. That there is no doubt it all that we are seeing a slowdown in all parts of the world, even the u. S. Economy is slowing. Getkey question is do we this growth . Not . Jonathan you think analysts will guy do you think analysts will keep or cut . Jonathan they will likely cuts. We have earnings revisions index the earnings revisions index we send out each week. We have been seeing this backdrop of downgrades. Guy who is slow thus far . Jonathan it has been slow. That reflex the slowdown we are seeing in the overall economy if you track economic forecasts. There has not been a sharp downdraft and Economic Growth expectations. Shock, that can change. Our own topdown model in europe at the start of this year said european owners want to be zero. Currently, it is in negative territory with bottomup expectations in europe at three to 5 . 3 to 5 . The market is trying to get its head around near term the policy reaction and how 2020 looks. Guy one of the key things we are watching is if the fed has the ability to cut more than the ecb. Were trying to figure out if the euro will go up and dollar turns down or vice versa. Whats your take and how that impact your numbers . Say we which are say an appreciation to 120, how would that affect your versus the United States . Jonathan markets are pricing in aggressive fed cuts. Suret economists are less because the data doesnt necessarily support that. The possibility of fed cuts is very much on the table, even for july. Down onmay be going cuts, but guy do you think we will see a higher your . Euro . Jonathan i think that does happen, but i dont think it is a higher euro, i think it is a weaker dollar. Needt a weaker dollar, you u. S. Economy to be slowing dovish, the fed to be and confidence in nonus growth. At the moment, the market does not have. Have the last. This is relating to u. S. , china, and europe. If it stabilizes growth in the europe in europe and the u. S. , the dollar is likely to be a weak currency into 2020. Thats a big upside risk most investors dont consider. Guy thanks for coming in and sharing with some of your thoughts with us, Jonathan Stubbs. We are six minutes away from the european close where you can find all of the great shots we have here on bloomberg tv. You can browse them and save them and catch up on the key analysis that goes with them. This is bloomberg. S bloomberg. Guy we are heading into the close in europe. Two things are happening, oil is coming under pressure, and that is translating your breakevens. The u. S. 10 year is some 2 . The defensive names are still lifting. Are the bond proxies that driving the story. Ftse is out forming. Europe encloses next. This is Bloomberg European closes next. This is bloomberg. Hey im bill slowsky jr. , i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Guy european stocks finishing the day. 30 seconds away from the india regular trading. At a headline level, londons outperforming. Italy is doing a little better. A big move in the btp market beating through into the bank stocks. Ftse up. 8 . Defensives are doing well today. Faang stocks doing ok. Agents bc a bank stocks doing ok. Hsbc doing well. More defensive names are doing better. The dax being hit by the auto sector. The cac 40 up. 2 . Lets break it down by the point of view of the sectors. This tells the story we are seeing at the moment. Oil is coming off. Yields are dropping, prices are going higher. If you take a look at the top end of the European Equity market, it is the low beta bond like names that are doing well. The classic rotation we are seeing. Utilities are amazingly expensive. Food and beverage, household goods. The same stock areas are outperforming in the european space. Where we are seeing weakness, some of the oil stocks and the crude price comes down sharply. Pi and brent both trading down 3 . The bottom end of the market is where we are seeing weakness. It is oil translating into the stock market story and is therefore translating into the breakevens which is translating into the bond market. Oil is trading up. Chemicals trading up. Autos are getting hit. That is the concern around what is happening with the u. S. Trade narrative. The president has been talking about european auto sales before the boeing airbus news. The market is extrapolating one into the other. We are down quite aggressively. That is having a Ripple Effect in other assets. The crude price down three point down 3. 25 . Lets take a quick look at where u. S. Equity sit. Similar narrative developing. We are seeing in equity market that is not doing very well. 29. 64 and fading an earlier blip higher. The dollar is down. 1 . This is where the pride at this is where the price action is. U. S. 10 year trading so 2 . The price is higher once again. That is a look at what is happening globally. A fascinating story. A lot of this coming out of oil and we are starting to see that developing in the other Asset Classes. In the United States, automakers reporting sales for june and the Second Quarter. Fiat chrysler one of the winners. It is trading strongly. The strzok story continued the truck story continues to do well. Is it enough to keep this market on the rails, crank . Craig . Craig it is for Fiat Chrysler. That has been a slamdunk for them. They have won plaudits for the design of that pick up. They have also put a huge touchscreen in it that is model x like. Ram has been a standout story within their numbers. Even jeep suvs are still reigning supreme, that is having a hard time staying buoyant with where we were a year ago. It is the case that you have ram standing apart from this market, whether it is Fiat Chrysler were the other major automakers were going to have a hard time continuing to keep pace with where we have been in the last few years. The expectation is that retail sales this month will show declines as we have seen all year. There will be some sort of patching up of total Sales Results by resorting to deliveries to rental Car Companies and other customers. Guy let me ask the question im asking a lot of people. The auto sector is being perceived as a proxy for the trade war. As a result, it is getting a lot of negativity attached. Are the numbers we are seeing out of the Company Supporting that . Is it perception versus reality . How do they compare at the moment . Craig the market is anticipating the risk of more shoes to drop on the trade war front, particularly the case with the Commerce Department investigation of auto imports on the same grounds you saw them investigate steel and aluminum. The Trump Administration has put that in their back pocket, but they are far from stepped away from using that down the road. There is a possibility we would see tariffs put on imported cars and parts from the likes of europe, japan, and south korea. They are using that as an arrow in their quiver to get these countries to bend to their will from the trade perspective. You do see headline risk from the automakers and you could whyify some of the reason average vehicle prices have been so high, you have seen automakers swallow these Raw Materials price increases. There is not a clear indication that they are passing that on to the consumer. That is something they warned about when the steel and aluminum tariffs were put into place. Guy great stuff. Thank you very much, indeed. There is a fantastic function on the bloomberg, top live, you can punch in and take a look at what is happening with the auto story as it develops throughout the day as we get the numbers. Ford will be reporting later on. Lets get more insight into the global Auto Industry. Joining us on the phone is senior managing director and evercore isi. The auto sector proxy for the trade war. Differing to the negative market narrative we are seeing . Morevestors are clearly negative than the numbers we are currently seeing. It is overall going to be a fairly decent Second Quarter. We have seen some slower export numbers from germany recently, but that has not much to do with trade yet. Very negative sentiment in autos. You look at these valuations, which are crazy low, especially with relative to the past and the market. These valuations are driven by so many things. Cycle,uption, by peaks by regulation in europe and you have trade in all of that together is killing the multiples. Guy the problem with this is until we get clarity, it is unlikely the market will take a different view. It was amazing to see the line drawn early on today. Boeing and airbus, more carrots being applied as a result of that wto disagreement. The market took that negatively as an indicator the Trump Administration will be taking a harder line with the european auto sector. Everybody seems to be shooting first and asking questions later. Is that the right interpretation . At the moment, people are not willing to take any risk on this overnight know that the situation might dramatically change. If you look at the european Auto Industry and the germans alone, about 600,000 cars being shipped from europe to the u. S. Every year. That is a multibillion revenue stream. The implications from tariffs would be devastating on the profit and cash flow streams of all of the german oems and jaguar land rover. No one wants to take any of that risk into the portfolio. What is the sector priced for . How bad an environment is the auto sector pricing in . People talk about a recession. People talk about major tariffs. Give me a sense from a macro point of view what is priced. Arndt we are looking at valuation multiples that are 20 or 30 below any recession that we have ever seen. Cannot drop much further from here, especially the price value multiples. Is indicatinge pe and a substantial drop in earnings. The risk here is can earnings fall 20 or 30 . They can easily fall 20 or 30 , even already in 2020, if you just look the risk from regulation in europe and trade. That is what the market is waiting for. The market is waiting for honesty in earnings for 2021. Let them fall by 20 or 30 and that it is time to buy the space. Guy in terms of getting an understanding about what the future Technology Story is going to look like, uber is one of those factors that the market is having to price in. A note saying that in order for , youto make its numbers have to see the number of monthly users doubling. Presumably there are other trends other than trade that are affecting the story. Again, is that priced at the moment or is that something we have to price in . Arndt disruption from Silicon Valley and a time as cars, that is been the big the two or three years ago. Investors understand the whole disruption, the discussion much much better. Taxes will be far out from your in order to be sizable enough to threaten the private use of cars. I do not think that disruption from [indiscernible] is the big theme. It is more regulation, how does the industry deal with the means and chinar 30 in the next five to 10 years and that is a real thing. There is no way dealing with european emission standards without 20 to 30 ev and we have no idea how that supply chain will look like, how this will impact the cost per unit. That is a complete unknown and that is a bigger . Taxi. Vestors than robo guy lets talk ev. , doesla makes its numbers that mean margins come under pressure . 5000 more or less might excite some people in the short term. I do not think it changes the narrative overall. Is evs are no longer exclusive. There is an avalanche of eds coming to the market from of porsche, and audi, we will see how tesla develops in that environment. I think they will be unique in the u. S. , it will be difficult to gets of substantial and Sustainable Growth in europe and even china. That is what im always saying. As the product is becoming less exclusive, so will the valuation multiples for the company. I do believe you need a very Large Company to support the rollout of a sustainable, profitable electric vehicle product and that is something tesla does not have. Guy one final quick question. Are we done with profit warnings from daimler . Arndt [laughter] thata little bit worried the fullyear guide the fullyear guide is sort of on the edge when i look at my model. Im not saying that will warn again with the Second Quarter. That is pretty much done with the recent warning on the legal cost. I think if the market does not recover, if there are ongoing issues with the tle in the u. S. , if there are ongoing issues with quality recall, then the for your guidance is at risk. We will know that by q3. Guy always a pleasure. Thanks for taking the time to join us. Senior managing director and global head of Automated Research joining us from evercore isi. We are done with the european markets. Ftse 100 had an ok day. Got a lift around 3 00. The auction do not deliver much. Ftse 100 up when it presented. Cap 40 cac 40 under little bit pressure but still up. 2 . We will carry on the analysis at the top of the hour. Jonathan ferro and i will be joining you for the cable show. Dab Digital Radio is where he will find is an on all of your bloomberg devices worldwide. This is bloomberg. Guy live from london, im guy johnson. This is the european close on bloomberg markets. Lets get a first word news update with courtney donohoe. Courtney it looks like nasa successfully tested the Emergency Alert system of the orion spacecraft. You ride is supposed to take spacecraft back to the moon. Less than a minute after loss, the oneida lesson a minute after launch, the Orion Jennison the escape system. Christine lagarde may be the next president of the European Central bank. Her name is one of the key pieces in the latest late candidates for the eu top job. Various officials have been wrangling of the job since sunday. President trump once tanks on the wall on the mall in washington for the fourth of july and it looks like he has them. Spottedotographer several Armored Vehicles in a d. C. Railyard. Officials said tanks were being transported from fort stewart, georgia. A few hours from now, the u. S. Versus england and the u. S. World cup semifinal. The second tomorrow between sweden and the netherlands. The winners will face off on monday. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. I am courtney donohoe. This is bloomberg. Guy . Guy thank you very much indeed. Time for the stock of the hour. Shares in delta are rising after april a married qqq report showing better than expected 2fter a betterthanexpected q report. Taylor riggs is here with more. Everything across the board look good when the Company Released preliminary results for the Second Quarter. At the bottom line, looking at profitability, 225 to 235 on an earnings per share basis. Earlier estimates have them as low as 205. 20 to 30 extra is getting it done. Everything across the board was good. This is a solid largecap company that is now posting Revenue Growth of 8. 5 . Revenue is a good gauge of how these companies can drive revenue and profit growth. That number looks good. Up 3. 5 . Overcome managing to any headwinds and post good updates. This means delta is outperforming on the share price and the basic fundamentals of any other airline. You can see delta up 6 for the Second Quarter relative to some of the other airlines which are suffering. Delta has also been working on revamping their international longhaul flights. For flights that are over 6. 5 hours, they are looking at sprucing it up, making it more friendly for customers. You get a drink, you get a better trade, you get more of a platter instead of a trade when being served food. They are hoping that additional cost will make customers excited about these longhaul flights. Guy im trying to check their fleet. Delay have any maxs . Taylor they do not. That is helping them improve profitability. Havef the other airlines 737 max 8 is. Have 737 maxs. Delta is trying to avoid that in so their turn to gain market share from the other airlines who would seen nosebleeds grounded. Guy taylor riggs with the latest would see those leads grounded. Whoou would see those would see those fleets grounded. Guy this is bloomberg. Guy lets get more fireworks for you. It is time for our global battle the charts. You can find that on your bloomberg. Gtv is the function you will need. I want to talk about the changing expectations for the Federal Reserve to cut Interest Rates. The way that fed funds futures contracts, the number of cuts those see based on their pricing. If you look at the blue, that is the july meeting, the white is the end of the year. You can see we have moved into rate cut territory. The question now is not whether we get a cut at this july meeting, which looks like a 100 possibility based on these contracts, whether we get two or three cuts by the end of the year. We pulled off our most dovish expectation, but check this out for yourself at the gtb library on the bloomberg. Guy very nice. Dave wilson, over to you. Following up on what simone talked about. Interest rates are going down and net income becomes harder to find. If you look the stock market, the place to go for income is utility shares. Their yields have been relatively high because you have to attract investors somehow and it is not like you will get the kind of growth you get with technology companies. Utilities have the roast. Utilities have rolled the roost. If you look at what is happening to bank stocks, what we are looking at is the gap in dividend yields between the Kbw Bank Index 24 companies and the dow jones utility average and its 15 companies. You find out that as of last week, the bank stock actually had a higher dividend yield based on projected earnings for the First Time Since february 2009, as the financial crisis was starting to wind down. This is before we got all of the announcements from the major banks about how their dividends were going to go up after they pass the Federal Reserve stress test. Payouts aret, those not even in the numbers. Wass clear that wells fargo on to something when he talked about, moved over utilities. It is the banks of your looking for income. Guy that is amazing. You take a look at valuations globally surrounding the utility sector and the spread you are seeing between what is going on with the defensives and the relative valuations. Fascinating. I love simones chart that i will give todays win today. That shift between utilities worth paying attention to. Dave wilson our winner today. Coming up, david westin will be taking us to the next hour. Eurasia Group President will be joining him for a discussion on what is happening in hong kong. Trade a big story in that show as well. This is bloomberg. David from bloomberg World Headquarters in new york, im david westin. Welcome to balance of power, where the world of politics meets the world of business. On the brief today, maria tadeo from brussels on finding new people for the eus top three positions. Kevin cirilli on president trumps outside secondquarter fundraising, and from detroit, keith not in on north American Auto sales. Maria, lets talk you in brussels. Last time we checked they were still working to come up with the head of the commission, the council, the the ecb. Have they made any project have they made any progress . Maria we think they are now close to a deal. We have seen a tweet from the head of the European Council donald tusk who tweets we are closer to a deal. If our reporting is correct, the package could see kristen lagarde replacing mario draghi as the helm of the European Central bank and also a german, the current defense minister