Well with the stoxx 600 up 2 10 of 1 . One of the outperform is is up and the cac is also positive. It is a racing some of those gains now. Lets get to the main story the Standard Chartered bank head of global fx research. Quarter gdpsecond growth doesnt sound like a massive slowdown but there are some warnings here, what should we make from this . Olds long as there is china just chinese growth over 6 , they are doing fine. They hit Market Expectations with aq2 number and we have not experienced the full brunt of the last rounds of tariffs which will be felt inq3 for the monthly numbers surprised to the upside and thats in the hope that maybe things are beginning to stabilize there. Its like a 14 trillion economy and its carefully managed and this is a managed slowdown. Should investors take flight at all . Investors have to be cognizant, every set of policymakers whether emerging or develop markets are trying to control their economies. There is strong debate as to how good their tools are. Some of the tools china is using have not been used in the past so they have to feel their way with respect to tax cuts and some of the other measures they are taking but so far, they seem to be ok for from an investor standpoint. Was there much of an impact on this number . Think theres an impact on gdp numbers, is likely to be felt on bank share prices. Its very hard to see where this would affect the gdp number. Vonnie President Trump has so far been justifying his hard stance against china and so far in the data, perhaps the impact of the trade war has been muted. Will continue to get worse . Will consumers eventually be affected . There has been a strong impact of the trade war if you look at the sectors of china that have been charged tariffs in their exports are dropping rapidly. Policies china is putting in place are operating on the aggregate of the economy mitigating the effect that the sector affect is pretty strong. Vonnie when it comes to currencies, where not seeing any change in the remember in the embyi, any rem in theion that china is this is influencing or manipulate in . Nothing under widespread discussion right now. There are a lot of capital controls with Free Movement of capital in and out so there is some government impact that the reserves numbers are pretty stable, whatever they are doing. It doesnt seem to be the large scale we saw 10 years ago. About thets talk Federal Reserve and dollar appreciation. Point rate cut offset dollar appreciation . It offsets some. If its one and done, i think the market will have a very negative, cathartic event because they think the market is expecting this to be the beginning of a sequence of cuts. U. S. Economy seems to be doing fine notwithstanding the strength of the dollar. Its slowing but not slowing very rapidly. I think the 25 basis point ease andwill get two we expect the u. S. Economy tos grow at pace. Vonnie where do you see the u. S. Dollar headed to the second half of the year . Boring on the dollar. We expect the eurodollar to be flat. Whatever story will play out in terms of any service shifts, we expected to happen more toward the end of the year. Overall, we think the dollar weakness is more likely and we are seeing that play out in emerging markets already with the global liquidity stance and making investors more willing to buy particularly for fixed income in emerging markets. Expect developed markets to follow but its relatively muted gains and relatively late. Vonnie when you see the treasury putting countries on the watchlist we are talking about china and vietnam and strangee and the very developments of countries like italy and ireland and germany on the watchlist even though they use that euro and should not have any ability to intervene or do anything that would upset currency markets, what do you think when you see these things . Does anything material emerge from these actions . Having read the law several times, even being named a you have to talk to the treasury for a year on how bad you are. There is an issue obviously that the u. S. Has with the intervention that some countries have had in the past but right now, there is very little intervention going on in these countries. The u. S. Is objecting to the level of the dollar. Thats a different objection. The u. S. Is a stronger economy and rates are higher and there is a lot behind that besides manipulation. We saw a forecast today for the ruble to crash like 9 . Emerging market currencies would you be looking at . What we favor our crosses and we favor the crosses of currencies that are higheryielding versus those that are more equity dependent. , we area versus taiwan long yen and short korea and its those kind of trades we actually like. We think the low rates environment will be very andficial for high yielders has been on the fixed income side and the currency side. Vonnie finally, where do you see the euro versus the pound headed . The euro will ultimately go up. If you look at the positives that have been in place for the dollar over the last couple of years, the market has priced them in. Its unlikely we will see much more added to that. Inthink its a slow drift up sterling is much more obviously uncertain. Managedve any kind of brexit, sterling is likely to appreciate so thats our best baseline. Say is thatwould the Options Markets are pricing in the risk at a low level so its relatively cheap hedge. Vonnie thanks to stephen englander. Lets check in on first word news. The white house is moving to end of the protections for Central American migrants. A new rule says asylumseekers who passed through another Country First will be ineligible for asylum at the u. S. Southern border. The rule takes Effect Tomorrow and applies to children who crossed the border alone. The policy is almost certain to face a legal challenge. President Trump May Replace commerce secretary wilbur ross according to nbc. Thats prompted by the push for putting a census question in on immigration. China has not grown the slowly since 1992. Courthe slowest under beijing faces is a try to negotiate a trade deal with the u. S. At same time, industry out what and retail sales growth the estimates which is a sign the economy stabilizing. In turkey, president erdogan says u. S. Sanctions are unlikely after the country bought a Russian Missile defense system. He says President Trump is not in favor even though some u. S. Officials do want sanctions. The u. S. Has warned that deploying the Missile System would undermine natos capabilities. Day,l news, 24 hours powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Vonnie thank you. Was a beat ford city banks secondquarter earnings and we will have the numbers next. This is bloomberg. York, imve from new vonnie quinn and this is bloomberg markets. Lets check on global markets. Abigail we have relatively small moves around the world. The s p 500 is down fractionally. Last week am a down week but the dax is a different story as it was up last week and its up today as well and the german taxes up half a percent. The shanghai composite is up 4 10 of 1 despite missing the mark. The shanghai composite is higher net net. Helping the emerging markets this would seem more risk on however, another aspect of the risk asset, we see a pretty sharp plunge, down about 4 10 of 1 which is not huge but not confirming what we are seeing in stocks. We are seeing another bid for bonds starting with the german bund. This is year to date, losing 50 basis points on the year, the most going back to 1990 on record. Investors are seeking some safety and extraordinary about this chart is that investors are paying the German Government to park their money. U. S. And lower in the we will look at the 10 year yield sliding a little bit and thats weighing on the banks a little bit but also you will be talking about this but citigroup down about 1. 1 and they put up a quarter but Services Look decent and they beat the top and bottom line estimates. They had more costcutting in the trade revenue not cutting and thats weighing on the banks will stop wells fargo will report tomorrow. Vonnie the first of the big u. S. Banks off the block with earnings. Lets bring in michelle davis. Said one analyst said this is slightly like a Toyota Corolla moly rolling down the road at 35 Miles Per Hour in a 38 Miles Per Hour zone. The big thing to note in one of the big expert patience for the shares is that even though is 350 million gain. Its worse than what analysts were expecting and that something we will read to the other banks this week because will probablynks have gains on their fixed income trading on a yearoveryear comparable races. Trading did not look is great. Vonnie it definitely didnt. The other thing that didnt look good was m a revenue. Why is that . The mandatet get from the big deals but analysts will be looking forward to hear whats being said on the call about their future pipeline and whether they have deals that can make that number a little bigger next quarter. Vonnie did anyone point out that delinquencies were off and that might portend something for the u. S. Consumer . Yes, they are at a turning point for banks have benefited from rising rates and other rates are projected to fall, what does that mean . So far, the strength of the consumer has pushed the banks through but seeing these increases in credit costs and decreasing credit quality is probably not a good thing. Vonnie it was 15 in recent credit costs. They managed to keep the interest margins around 272 so that was good but i remember then talking about how most how some of their promotional credit card cost of rolled off and thats why this is just typical seasoning you would see in a cycle. They are not too concerned about it but we will see what the other banks report and if they have other trends. Vonnie revenues at consumer banks were up 4 which is not terrible but you might anticipate something a little better than that. What will citibank do to increase revenues customer cost efficiencies are now under control or better than analysts expected. Thats one of the levers, its something that analysts have an wedding for them to use. They are looking for that to the next quarter and maybe we will expect more of that. Citibank saydid about this sputtering ficc business . Im thinking about them talking about the Deutsche Bank exit from trading and how they could capitalize on something other banks have talked about and potentially seeing their weakness of an opportunity not only in talent but also to win over some clients. Vonnie is going to be some business up for grabs and citibank needs more market share. How will they go about doing that . Is are any differentiation between the big banks at this point . One of the things that banks have the that banks have to do to differentiate themselves, they have to show that they are trading execution better in that requires Huge Technology investments. Some that might have desire, the urge to cut costs, thats a place where we will probably not see them cut cost because they have to stay ahead and develop their tech weapons. Vonnie thank you very much and we will see if Something Else emerges from the analyst call. The other banks will report later in the week. Still ahead, talks between semantic and broadcom are off after the companies could not agree on a price for their proposed merger, details next. This is bloomberg. Vonnie live from new york, im vonnie quinn and this is bloomberg markets. Shares of symantec are plunging broadcom has broken off deal negotiations together. Symantec would not accept more than 28 dollars per share. Is it possible these talks restart . I think its very possible. They are on hold at the moment and the deal was pretty much done going into the weekend and as recently as yesterday, people were expecting to get this thing over the line with an announcement scheduled for tuesday. Down at thely fell last hubble. From conversation last hour, it broke down over price. Betweens a price agreed 2520 eight dollars. 28. Broadcom found something they thought was maybe not quite right in the Due Diligence of the price was cut a little bit. Symantec felt that cut was not something they could live with. They walked away. We often see these things happen at the last minute but what itsnt usually happen is doesnt get leaks to the press like this did. Vonnie exactly, it was reported that talks were called off. Do we have any indication of what the Due Diligence failed to see . We dont but we will try to establish that this morning. They obviously found something and it sounds like it was something relatively minor just by virtue of the fact that the price i heard about was not huge. About 1. 50. It wasnt 20 off the price. Vonnie is there somebody else that might come in here by just offering up the money . Symantec is a company that has been primarily for sale for years and years and there was an active is in there for a long time which would make it an easier target should someone want to buy it. Its not obvious someone will swoop in. They could it just they could have done it at any point that longterm, symantec is a company that has been known for sale. Vonnie it sounds like there needs to be a mediator here. Both sides of the issue and how neither would want to go back to the other and restart talks but is there potentially a role for the activist here . The activist is already on the board. Have an executive from silver lake so in the form of those two alone and other people on the board of symantec, you have this antientrenchment crowd. They want to sell that they feel the price is right. Vonnie is there a role for them to go back to broadcom or to bring the lower price to the board to complete the deal . Potentially, yes. There are some fairly big ecos and they will feel annoyed the price has been cut at the final hour but they are still annoyed that this is out in the press. These things often happen behind the scenes and we may not know it on till the merger comes out. The two things to look at is is there it to number a true number that two sides can agree on but is the fact that this has become public a factor . That has become an impediment to getting the deal done. Vonnie we had seen the drop in symantec improved in the last little while so who knows what was going on behind the scenes. Ed hammond, wonderful reporting. Broadcom had been higher all session as well, about two percent. Its time for your latest Bloomberg Business flash. Gilead sciences is boosting its galapagos, paying 5. 1 billion to increase research into inflammatory diseases. It raises its stake in galapagos to 22 . Gilead has been hurt by incoming competition. In Oil Transaction is valued at 3. 2 billion representing 18 premium. That is your latest Bloomberg Business flash. A quick check of u. S. Markets they were fractionally lower do now unchanged on the dow and the s p which is at 3013. This is bloomberg. 3 vonnie live from new york, this is bloomberg markets. Lets check in on first word news. In new york, lawyers for accused sexual trafficker Jeffrey Epstein are arguing today that he should be released on bail. Prosecutors say the financier is worth half 1 billion and is a danger to flee. They say several more women have contacted them in recent days to say he abused them when they were underage. The hurricane that hit louisiana has now been downgraded to a tropical depression. Its expected to unleash more lifethreatening floods today with another foot of rain folk forecast for the central part of the state. Oil producers are preparing for offshore platforms to stop pumping gas. Former South African president zuma is answering questions from a state commission about claims of corruption during his time in office. He was president of south africa from 20092018 post the commission is investigating widespread allegations. Members of the wealthy Indian Business family allegedly influenced him and cabinet ministers and lucrative state contracts. British 50 the new pound note will be alan turing. The bank of england says he was selected from almost a thousand nominations suggested by the public. He was a war hero for breaking nazi germanys enigma code and his question of whether computers can think lay the groundwork for artificial intelligence. News, 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Vonnie a big week for earnings. The first is citigroup reporting today. Lets bring in david wilson of bloomberg news. We had the china data overnight as well, our participants more impacted by the china data or the first round of earnings . Its really the earnings carrying the day. The extent of doing business with china will show up in terms of the secondquarter results especially with the backandforth on tariffs. You can say its a bigger question, not just how the chinese economy is doing but also how the back and forth on trade between china and the u. S. Will influence a companys ability to make money. They are paying more in tariffs and that means their costs will go up and i have to cover that if they want to maintain their profitability. That will become an issue to watch. Vonnie we saw a little bit of is it across whole sectors . Its less of an issue for banks that they have another issue staring them in the face which is what the Federal Reserve doesnt interest rates. To the extent that rates come down, that means perhaps that the net interest margins will narrow which is another way of saying they wont be able to loanss much as on their and investments relative to what they have to pay their depositors so that becomes an issue to their profitability Going Forward. Vonnie citigroup said a 25 would only main 50 million difference. It doesnt sound like a lot. It depends on how they keep score. You can think about what they will be able to charge on consumer loans because their consumer business was big in the second corner and what does it mean for bond yields. There are lots of pieces of the puzzle and it becomes a matter of how the puzzle really fits together when you see the effect of lower rates on the results. Areie what sectors unloved. Thanksed earlier about being unloved but with indices at records, there is not much unloved. Not really but you think about energy as another example. Oil prices certainly have bounced around. Theres the threat from electric cars and so on. Thats an area that will be worth watching. Taking a look at some numbers with week to week calculations for the s p 500 and in the last week, we saw the Energy Outlook pick up along with the financial outlook. This week, we will see if the financials are on target and in the next couple of week, we will get a preview of how they look in energy prices. Fan magwhat about the stocks. The longer acronym is used. Take the bank stocks, facebook, amazon, netflix and google and you add in microsoft and apple and you get the fanmags. They are increasingly important. They are a bigger share of the market than i have been. Stocks alone is double what it was back. Vonnie regarding the health of the market and investing, where would you place this market in terms of market cycle . Whetherr question is the economy is in a healthy spot. Had,the records we have that must be a plus in terms of giving people an interest in stocks but you look at the more defensive areas of the market like utilities and real estate and theyve done relatively well lately. You have to be concerned about that in the sense that thats not really a show of strength in terms of where people see the economy. Its like trying to pick up income at a time when its increasingly difficult to do that in the bond market. Forthis a lot of back and and it may be secondquarter results they give you a sense of how things are lined up. If we get more rhetoric on china or another negative catalyst, would it be enough to tip sentiment in the stock market . There are certainly that potential if only because you look at the numbers and analysts 500 will behe s p little changed this quarter and then it starts to pick up in the Fourth Quarter into next year. It will really come down to how do companies present themselves in terms of their views Going Forward to show whether the analysts are on target with the numbers . You have to remember that the stock market is a forwardlooking place. We have been talking mainly u. S. But that chart we so was global downgrades. Absolutely. Vonnie dave wilson, thank you. Coming up, falling flat, it was supposed to be this years headingipo but inbev is back to the drawing board and we will discuss that next. This is bloomberg. Vonnie live from new york, this is bloomberg markets. Plans to listd their asian subsidiaries being canned. The beer maker is looking for a its 100 reduce billion debt pile and keep investors happy. Joining us now is duncan fox from our london studio. Why did they decide to kill the asian listing . Asia is where growth is in the beer markets along with young adults and then market. You want to be there and i suppose consolidation was passing them by. Putting a new Balance Sheet on the market makes a lot of sense. It didnt fly unfortunately. Vonnie something went wrong along the way. Is this the bankers fault . I would think so. They mustve gone through and found a range that they thought people were happy with to invest. Kongange is 4047 hong dollars and for whatever reason is the markets have been shaky of late, it didnt quite get away. Oryve only suspended it deferred it so it may come back. Im not quite sure of the hong kong listing rules and how long we need to wait before that comes back. It still seemsstol seeme like m a in europe and asia takes longer. The a off the agenda for moment or is there something of they can do . A theyve got a problem with their dad. Its about 102 billion. They dont really have to do anything but run that business the way they are to generate cash. I think they will generate up to 40 billion in cash over the next three years but nevertheless, they dont have too many issues with the debt as its currently structure. If they want to do m a they have issues that have to be more expensive than what they have on board. Youre telling me there is no fallout for Credit Rating agencies . This deal just didnt happen . I suspect there will be more of a watch from a Credit Rating point of view then has been. Its business as usual for them. It might have met they could of done deals. As you said, it takes a long time. Carlsberg has been talking to the th government for two yearsai so im not sure great deal has changed with what happened over the weekend. Vonnie would it help if they were to move from hong kong to another venue . I have absolutely no idea. I think the problem was they pushed the price initially. It was Something Like six. 5 times the range which was larger than any other value and around the top and. Top and and they didnt get that valuation range right. More broadly, if we look at the whole landscape, it has been more difficult to price these kinds of ipos, investors are potentially holding off on deals like this . At the same time, its hard for the bankers to price it right in this kind of environment. Having done these deals in the past, youve got to make sure there is a decent aftermarket and its very difficult. You start the process probably in january. That is a lot that happens between january and now that can change, peoples perceptions on how the company is behaving and doing. Its not an easy job. Youve got to make sure there is a decent aftermarket link where they price the initial range, it didnt guarantee that on thats why they pulled away. Vonnie thank you very much and the stock is down about 3 . Its time for your latest Bloomberg Business flash. Crane is dropping efforts to acquire surcor. Industrial Product Company rejected a 355 million bid. Highly conditional an opportunist. Billion or investor peter thiel is calling google seemingly treasonous for agreeing to work with china. He says the fbi and the cia should investigate whether googles current parent up about has been ample traded by foreign intelligence agencies. Peter thiel is one of Donald Trumps top supporters from silicon valley. Amazon is tapping kobe bryant and other big names for its prime day summer sale. The event began today and runs through tomorrow. They face competition from walmart and target. Latest Bloomberg Business flash. Still ahead, we look at oils outlook after storms lash the gulf of mexico over the weekend with futures in focus next. This is bloomberg. Vonnie live from new york, im vonnie quinn and this is bloomberg markets. There are reports that hp and dell plan to move as much is 30 of production away from china in a bid to avoid tariffs on you was bound goods. The flexibility and supply chain is helping the company navigate the dynamics. We have a Global Supply chain that has flexibility in it. We have 25 manufacturing facilities across the globe. We are balancing the needs of our customers with the environment we are in. I think weve done a nice job of alan finkel tariff dynamics and will continue to work our way through that and hopefully, the two governments will come to an appropriate agreement at the right time. What does that mean in terms of adjusting your supply chain . You talk about 25 manufacturing will you have to start adjusting prices or have you started already . Recall, weve been able there have been three proposals that of come out that we have been able to navigate and we have been able to mitigate the impact through a shift in the supply chain are working with our supply base. We have adjusted certain prices on a small minority of products as a result of our inability to mitigate. While we have done some price adjustments, most of what we been able to do is offset the impact to date. Given the rhetoric around the trade war, have you detected any change in sentiment toward American Products and Companies Like dell in china . Certainly been thoughtful about that but to date, we had not really seen an impact to our domestic china business. We have quite a large domestic business in china. Its our second largest market. Its shown good growth over the last number of years. We have been in china for over 20 years. We are hopeful that the tensions will reside and allow Companies Like ours to continue to work and their respective markets. To date, we have not really seen an impact to our local business. You are seeing some impact just from the cycle itself. You have talked about softness in chinas software market. How is dell planning to navigate that . Question, we are coming off an extraordinary, strong fiscal 19 in terms of Technology Investment and technology spending. Technology longterm investment cycle but having said that, we have seen some softness in parts of the globe on servers as we moved into this year. Now is are driving right weve built the company to grow under various market circumstances. We are focused on taking share whatrowing revenue despite the local circumstances might be. Right now, our focus on lets drive growth where we can and make sure we are balancing our growth and profitability and delivering the right results for our investors. Dell cfo, tom sweet. Time for futures in focus and joining us is bill baruch president of blue line futures. We had a Severe Weather event over the weekend but it doesnt seem to have affected oil prices too much. Why is that . I am surprised we are not seeing a little bit of premium come out of the market but at the same time, we didnt see a lot of premium coming friday. Ia data has been driving the market higher and the opec tailwinds from the cuts. What we are also seeing is a very good technical landscape and pullback. We are advising clients to be a buyer until you see a close below 59. If you look at last week spike bike hire, we see a constructive bolt pattern develop and i think the path of least resistance, unless we see a close below 59, its going to be up to 62. 50 where you have a trendline from last years high. At that point, it will be an Inflection Point in will either be a bull market run or fall back from there. Vonnie i was reading that hedge funds have been not been this indifferent to crude in years. Weve been fairly range bound yet there has been a large range of a lot of volatility but there hasnt been a definitive move higher. Year, thatk to last happened but since the fallout in october, we have been very rich bound. Its been a 20 range but as we consolidate, there are many Trading Opportunities but we need to take out of that range broadly speaking in order to gather more bets on either side of this trade. Rumblingsat are the on tensions between the u. S. And iran . Are they still playing a role in this market . Think there is a bid on the market because of around but ultimately, just because of iran but we did not pick up any premium. Tropical storm barry and the iran is in the headlines and there is has been shots higher because of the headlines but we are not getting followthrough or seeing the next escalation. Europe is meeting in brussels to discuss the nuclear deal. There wasnt some discussions on the sidelines and we will see more developments. Iran wants to talk if the u. S. Remove the saxons but i dont see that happening. The situation will continue to drag out and it will continue to keep overall support in the market but its also going to be a potential move higher where it could bring a good tailwind and that will keep the buyers interested. Vonnie thank you. The stock of the hour is here. Mma according to the wall street journal, the embattled max jet will Stay Grounded in january until january 2020. The report is based on guidance. Its been grounded since march of this year at has a very big impact on the airlines. We heard again on the weekend from American Airlines that they said they were taking it off their schedules until november this year which is the fifth time they have said they are taking it off schedules. They also said they have 24 planes. All this does is escalate the cost for boeing and grounding through september of this year had already been estimated that it would cost them 1. 4 billion. Vonnie its been a big weight on the dow even though it broke through 27,000 this week. The biggest look at laggards since the second max jet crashed, there are several companies that are down and boeing was the biggest. They had a loss in triple figures. Vonnie thank you very much. Coming up, hsbc stephen king joins us to talk about the chinese slowdown and the impact of that on the global economy. We will have that and lots more. U. S. E taking a look at how and International Markets are trading, the s p 500 is just going nowhere at 3013 points. The dow is unchanged as well. Vixwe have a pretty muted underneath 13. This is bloomberg. Look in theinutes trading day. This is the european close. Lets check the markets. Green on the screen, the cap 40 is one of the better performers. The dax in germany is up 6 10 of 1 . Most of the stocks on the dax are higher, there are some lower, including deutsche telekom. And bank saying if they tmobile spent deal does not happen, it will not be good for deutsche telekom. If it does happen, it is priced in. The dax is a shaking that off. Altogether, we are up 3 10 of 1 . A little bit of movement in currencies today, mainly with the british pound. It is falling about 4 10 of 1 off speculation as to whether we will get a new deal brexit, or more months of negotiating. And