Testifying next week. Is doingip says barr the president s bidding. And also said the attorney general does not want my to testify in front of the house. Mother is set to experience to appear next wednesday. Democratic hopeful Elizabeth Warren has reduced legislation that is passed would require Public Companies to disclose their climate risks. The measure would also require companies to disclose the total amount of fossil fuel related assets to the securities and exchange commission. The bill aims to encourage companies to switch to Renewable Energy sources. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Shery live from bloomberg World Headquarters in new york, im shery on. Jon live in toronto, im Jon Erlichman. Joined by our bloomberg and Bnn Bloomberg audiences. For a cup. Case fed chair jay powell taking the central bank closer to cutting Interest Rates this month, citing risks from the china trade war and a slowing economy. And we take you to sun valley where media and tech moguls are converging for the start of the annual conference. We will hear from James Anderson, partner and Portfolio Manager at Baillie Gifford. Growing pains for levi strauss. The retailer had one of the most successful ipos of the year but profits fell 63 from a year ago. Lets get you started with a quick check on where markets are trading in the afternoon session. We are seeing u. S. Equity markets Holding Higher with the s p 500 up half a percent. This of course after really getting to a new record, and the s p 500 surpassing the 3000 level. Losing steam at the moment but we are seeing financials leading the declines on the s p 500. The dow up. 4 . The nasdaq is gaining. 8 . Investors digesting chair powells comments at the house when he testified in congress, pretty much solidifying a rate cut this month. You can see the 10year yield at the moment trading at 2. 07. This after we saw the treasury rally, taking the yield toward 2 . That move paring back a little bit at the moment. Look at theking a currency market because while there has been so much focus on the fed, some Central Bank News in canada, where the bank of canada left its overnight wreck overnight lending rate unchanged at 1. 75 , confirming a theme we have seen in the u. S. Dollar in recent weeks. A strengthening canadian dollar, weakening u. S. Dollar against the loonie, on the belief that as the fed moves to rate cuts, the canadian situation, highlighted by decent performance in the canadian economy, would allow the bank of canada to avoid a situation such as cutting rates. We did hear from the Central Bank Governor here, highlighting some of those trade uncertainties around the world as a possible wildcard for the economy. Shery we have lots of Central Bank Talk this week. It was day one for chair powell. The fed chairman testify before lawmakers on the house and dental services committee, addressed the Central Banks outlook, uncertainties weighing on it, and how long he intends to stick around. Chair powell the overall economy is performing reasonably see what we call crosscurrents. 3. 7 is a low on implement rate unemployment rate, but to call something hot, you need to see heat. While we hear reports of companies having a hard time finding qualified labor, nonetheless we dont see wages really responding. I dont really see that as a current issue. The bottom line for me is that the uncertainties around Global Growth and trade continue to weigh on the outlook. In addition, inflation continues to be muted. The law gives me a fouryear term and i fully intend to serve it. Shery we welcome the president of great to have you both. Let me get started with you, ed. Investors at the moment seem to be taking chair powells comments as a done deal for a rate cut. Would that be your take as well . He was saying a half year ago we would keep going up in rates but he has reversed course over the last few months. Really it has been more solidified. Maybe we will cut rates, i think we are going to cut rates. It probably will happen that we will cut rates. You can see that showing up in future markets of implied probabilities of future rate cuts. You can also see that in for guidance of Federal Reserve officials. He has kind of eased into it. There is very little surprises given where hes been going with his talk. Jon when we think about the uncertainty from trade situations and what the fed can ultimately do, can we measure what a rate cut would ultimately do to take away some of that uncertainty for the economy . I dont think it will do that much in terms of Economic Growth. Exports aobably boost little bit by lowering the dollar, and we did see a reaction in the dollar. You can probably push inflation up a little bit closer to the 2 target, but really nothing in terms of the cuts can really do much for a broader economy. The key reason the fed wants to uninvert theant to yield curve and send a signal to the markets that they are serious about policy. Shery we continue to see these warning signs. , on the chartsion on the bloomberg, showing we are past the 30 on summer session. Every time that happens, we have seen a recession follow since 1967. We have been getting some mixed pictures about the u. S. Economy. What should we be paying attention to . The indicator you mentioned is based on the yield curve. Policy, demand for longerterm assets is depressing the longer portion of the yield curve. The signal from this indicator. Ould be a little distorted yes, there are risks to the economy, and chair powell mentioned a few of them. Business investment, housing, these sectors are not doing quite so well. At the same time, the u. S. Consumer is doing really well. That is the core of Economic Growth in the u. S. , a domestic oriented economy. As long as the consumer remains healthy, we will probably not face recession. Ed, what about on the issue of wages and inflation . Michael mckee has talked a lot about the Amazon Effect of how the economy is shifting. How do we explain what is going on right now . We have record low employment which is just fantastic. As powell said, people are are starting to be brought into the labor force who were formally not, including lower skilled people. He says people are now training those lower skilled people. That will show up in increased wages in the long run. Couple that with technology, amazon, we have a lot more goods. Consumers are a lot better off now than ever before, and thats fantastic. But one thing powell mentioned which is important is the trade tensions, and they call it a crosscurrents. I would call it a negative on the economy. That is potentially dragging things down. They are now engaging in what they call accommodative policy of these other bad policies in the global economy, we are going to try to potentially counteract that. Im not sure if that is a good idea from an overall perspective to be hiding problems. The more we hide problems, if it willtart coupling, it eliminate the ability of people to observe what is going on in the economy. Shery to your point, there has been so much uncertainty. This chart on the bloomberg showing Monetary Policy uncertain the, in yellow. Trade uncertainties biking, the line in white. It is abouter said the health of the american consumer, so when will we see consumers take a hit from higher tariffs . Who pay the consumers and also the american and Global Corporations who pay. Are taxes onriffs production, whether that is steel, aluminum, electronics. That will hit the consumer pocketbooks him as well as the corporation, which will show up in their stock prices. There has been a lot of uncertainty disrupting supply chain throughout the globe. Certain industries, soybeans are getting totally hit. They cannot sell to the same people they could. , where aner products American Corporation will design now all of and sudden they cannot have it assembled by a Chinese Company because it is too expensive. That is hitting all corporations, even small ones. Jon thanks for your time, ed and to heal initially a table. When we come back, we are heading to the gem state where the annual sun valley conference is underway. Jamesl hear from anderson. Jon this is Bloomberg Markets. Im Jon Erlichman in toronto. Shery im shery ahn in new york. Ini strauss reporting a miss its quarterly margins and declining wholesale sales. The street ripping into the stock on the news. Analysts are reiterating their positive views on the company, saying margin pressure is a shortterm issue with the brand resonating in retail stores. Joining us now is a retail reporter of bloomberg. Markets dont like what they see but analysts are still positive, why . U. S. Sales are slowing down in levis but they are reaching out or their International Markets. Asia, europe, and they also just ipo in march. The company is saying we are taking a onetime hit with the profit but we have a lot of things in place to make sure that you should not be so cautious about us. It was incredible watching the excitement around that ipo. The Company Seems focused on being more than just a jeans brand. Are we showing seeing that show up in the results . Jordyn their top business is doing well overseas. A lot of people are wearing levis tops. They are leading into the other items and becoming a lifestyle brand, not just known for their jeans. Shery all of this expansion overseas, trying to expand ecommerce network, that must cost money. How much pressure does this put on the company . Thisn what showed up in quarters earnings, they are spending a lot on marketing, going out and telling people the story. That is what wall street was cautious about. They are showing up with the collaborations but levis is saying we need to do this so you can understand we are so much ans we arejust the jena known for. Those couple of collaborations, working with macys, is it festival onchella, Stranger Things netflix. Is there a sense of what kinds of collaborations these mean for building the brand . Jordyn coachella is a great example. In 2018, beyonce war their andts wore their shorts, the same thing with Stranger Things, a lot of people watch that show. Lets be where the young people are and put ourselves out there. The same thing for macys. That was for younger kids, hopefully, you get that loyalty young and stay in it. That is one of their best strategies they have going right now. Shery how are they trying to appeal to the International Market . Are there challenges there, like currencies . Jordyn they are opening around 100 stores in 2019. Already open 78 international stores. Jordyn one of the challenges isg sure there is an audience there. That goes back to them having the tshirts. Obviously, a lot of uncertainty overseas. Has mentioned that, said that they are monitoring the situation. Jon thank you so much, Jordyn Holman from bloomberg news. We are going to take a quick break. When we come back, the sun valley conference underway. Some media moguls and highprofile investors gathering, including James Anderson of Baillie Gifford. We will hear from him next. This is bloomberg. This is bloomberg. Shery this is Bloomberg Markets. Im shery ahn in new york. Jon im Jon Erlichman in toronto. Well, it is a busy time in sun valley. Top media and tech and business for a meetinged of the mines at the annual allen and company conference. Ed hammond is on the ground with a guest with minting positions in everything from tencent to amazon. Thank you so much. Anderson,d by james head of Global Equities at Baillie Gifford. You have the honor of being our first guest at this year sun valley conference. We have seen the suvs arriving, the vests. What are people talking about in some ways i find it difficult to apply a narrative. So many different conversations. For each of us, we are inspired by our particular interests. As you would expect, several comments on politics and even including britain, and about the ramifications for us. Ed obviously, everyone is looking at this through their own lens. Last time we talked, talking about the debate between growth and value investors. You are big growth investors. Why does belly get so much credit, seems to absorb so much of the attention, people are said to be prophetic, whereas growth, it is seen more as a moonshot. Why is that . Wees that is right and dont have the answers to this and so many topics. You capture it well. Isehow, valley investment seen as more serious and has an associated set of literature and gurus to go with it. Whereas the only good book about growth investing, just as old as im, which is 60. A long time since there has been a good articulation of growth. As you say, there is this cold personality around value, you think of buffett and others who have cherished it over decades. Growth, we dont see that. I wonder why the two are treated so differently . On a return to, growth has outperformed. James that is absolutely right. Therefore, what we ought to be trying to think very deeply about is why that is so. As you imply, much too long a , the actions of the Federal Reserve or whatever. I think it has to do with increasing returns to scale, which since microsoft went public, should have started to think about that. Those areas of increasing return to scale, intellectual capital are getting more dominant in the world. Im not sure where it is going. The question you are asking are important. Ed on the question of personalities, we have seen , thetly in the u. K. Followup continues, but what damage has that event done to the debate of active and passive management . It seems to be a big problem. Liquidity now in the front. I can understand it is an issue, and i respect what Neil Woodford was trying to do, even though i think that the limitations that he was dealing but iand the structure, worry more about the bigger ramifications of this, and there may be a refusal to take risk of any sort. Ed what are those ramifications . Instance, i find it bothers him that the governor of the bank of england can come out and effectively say it is dangerous to do anything that does not have immediate liquidity from this point of view. There are very few funds that get caught in the trap of what Neil Woodford is seeing. Do i think they are systemic . No. I think our bigger problem is whether we have enough people willing to take risk. This goes back to your previous question, if i may. I think we have lost track of how investment is principally about providing risk capital, and it is risk capital for economically and socially improvable tasks. The rise is very riskaverse from management, a bigger factor than the comparative stagnations of our economies than tends to be conveyed. Ed i hate to do this, but picking up on the idea of funding risk, lets talk about tesla, a company that you and i have discussed in the past. No controversy, everything going smoothly. Recently, they are increasing production. At some point, it seems inevitable that they will be rerated as an auto company and not tech company. If that happens, is that a concern for investors such as yourself . To lookirstly, i want at the way you ask the question. Im not trying in any way to make out that we are the equivalent to a buffet or anything else, but i do find it fascinating that what the media want to talk about Baillie Gifford about is tesla and nothing else. As soon as there is a whiff of a problem ed you have an entertaining leader in the form of elon musk. James i think we would both agree that their interesting features of many of the other leaders of our time. I dont want to evade the question. Im not sure as to whether it gets rerated. Firstly, i think it is being driven by exponential technology. Whether that is batteries or just about on taunus and the process of Software Upgrades and the like. Autonomous and the process of Software Upgrades and the like. On the other hand ed sorry, i have to cut you off there. Inry plenty more coming up the next hour, including the fed minutes of the june meeting. This is bloomberg. Scarlet the Federal Reserve will publish the minute of their whereeeting in minutes, officials later the groundwork for a cut in july. Im scarlet fu. Romaine this is Bloomberg Markets the close. We have a rally in stocks, everything coming back with equities up, a little bit of a rally and bonds, commodities as well. A lot of this tied to what we heard this morning. Strongerthey saw a case among rising risk, so a little more read on the balance in terms of how many fed officials were leaning towards a rate cut. The announcement here is that many fed officials sought a stronger case because of the rising risks, many fed officials saw the accommodation warranted in the near term as well. No decision taken at the june meeting, whether on Interest Rates or the standing repo facility. Many fed officials, in june, also sought a risk weighted to the downside. So the real big difference between what happened at the june meeting and