Abigail . Abigail romaine, we have a leg lower for stocks on the Iran Oil Tanker headlines. Just a couple of hours ago the transports had been on pace for a seventhup beak in a row. No longer. A sixweek winning streak comes to an end. This goes back to 2011. We see a nice uptrend, one that consolidates, though, down into the 200week moving average. Even though we have a small decline, it seems like were likely to head up. Its interesting to see that long winning streak coming to an end on the Headline News weve had this afternoon around aaron and emily . Im looking at me dala, which rose as high as 61 in its trading debut. The best start in a u. S. Tech form since chewy opened above its i. P. O. Price on june 14. Outpaced revolve group, resia. Fresi a m edallia were a little bit different closing today. However, theyre the sixth techs to go public since july 4. Romaine . Romaine thank you. With us is eddie. Lets pick up on where renita left off and talk about Risk Appetite. Do you still see that Risk Appetite in this Market Going Forward for the rest of the year . I really dont. Investors would be televise back away from the riskier areas. The defensive areas, the bond problemsies. Things like consumer staples, utilities, real estate, which by the way, had a pretty bad day today. I think those areas look much better than the tech names. Particularly bigname tex. Its a good time to shift away from those riskier areas and look for bar begins. Interestingly bond proxies had a bad day. Bonds had a bad day today. 10year up about two basis points. It seemed to be the fed miscommunication that threw the market. How is it being by secretaried . Renita as romaine said, the blackout period cant come soon enough. Many of the investors have been saying thank god were going into this blackout period. Everyone knows or assumes that the fed is going to cut come july 21st. Whether 25 basis pilot or 50 basis points, theres very much still a question mark surrounding that number. However, if you really take it day by day, focus more on the mike rorks look at the earnings, you know that has been driven by fed expectations. Wait and see what happens july 21. Not much is going to matter until then. Eddy, what does 50 basis points mean to the u. S. Dollar and what tchaws mean Going Forward for how you pick your stocks . The key number for global investing right now is 15 trillion. Thats the amount of debt around the world that has negativeyearolds and even the real event of having junk bonds with negative yields. Its opening a big gap between the United States and europe and administration, the trump strarkse wants to a see a major rally in the dollar here and squeeze the u. S. Economy so i think that really is playing on the fed. Also, i was really struck by the rapidity which the new york fed moved to sort of back away from mr. Williamss statement so i think thats a very strong hint that were going to get a 25 basis point cut but you may have to wait long. It could be in another six weeks we may well get another 25 basis cut. Now more news from iran. News that the iranian authorities have seelsed two vessels. The u. K. s jeremy hunt says no british citizens are aboard either ship and says the iranian seizures are unacceptable. Oil has been on quite the roller coaster for the week and i want feels as though demand concerns have outweighed the geopolitical issues. But today oil is higher. The ls but this week weve seen decliges of great than 2 . Were still down more than , almost on the week. That goes to show you, sure, we may see a very large escalation in these tensions with iran and that can very much weigh on oil exports but at the same time we have demand concern and at the same time we continue to deal with production in the United States that is on a longterm trend higher and is weve heard the agencies come out and talk about this and talk about the amount of oil that could potentially be in the system next year. To so you have to weigh the balance. Thats what you were saying. That the market reaction, at least when it comes to the Energy Market is pretty muted because of those rn concerns. Row mine sblull romine absolutely. And eddy, when you look at the aggregate demand in the economy. Were still seeing strength on the corporate side and were also seeing a lot of money being pulled out of this markets. Im wondering whats the combination of factors that are going to make everyone more confident in the demand side of the economy . That really is the big question. The retail sales number we got earlier this week was quite good, really, questioning why the fed has to move. Always the big determine nate is the housing market. Weve seen mortgage race rates come bay way down. I think thats poised for a good back half of the year and into 2020. Spick sticking with the thesis that were having pretty modest slowdown, well get our first look at g. D. P. Next week and i think this will be a better year or the second half of 2020 and looking ahead 2019 and look ahead to 2002. There are a lot of factors 2020. There are a lot of factors but the fundamentals of the economy still look pretty decent. Thank you so much. Our thanks as well to bloombergs sarah. That does it for the closing well. Taylor riggs is stepping in now on whatd you miss . The u. K. Foreign secretary confirming that iran has seized two of its vessels. This is block beryl bloomberg. Live from headquarters in new york. And im romaine bostick. In terms of u. S. Stocks, seems as though iranian geopolitical tensions overran the markets. Tankers in sh oil the strait of hormuz. Central bank combhune occasions stirs the markets. Well have a guest this hour before the blackout period for the fed begins. Medallia was up as much as 80 . Romine President Trump stood firm with the u. K. Over the seizure of the fuel tanks in the strait of hormuz. Caroline, this is obviously has obviously royaled the oil markets a little bit. Tay lo, you were watching this in the newsroom and what was the price reaction takeaway . Taylor we were hearing equities taking a leg lower. Eckty markets were the only ones that sold higher. You would exkts a little bit more of an oil reaction. As you guys have seen in the guests u. S. C. Speaking to, what has been the key attackaway what the that the u. S. Should sort of set aside because were not directly involved. The key reason to why oil didnt move as much is simply the demand side of the connotation. But as we see the maps tracking these two shims mack making their way towards iran, it seems this is a dialup in tensions. Iran has been employing a tit for tat rhythm. Threatenednker being by iran. But we were talking about the fact that iran was in some way, according to a report, looking for ways to solve the problem. One of the u. S. Navy ships has to come and apparently preseason. Three other iranian vessels from intercepting it. Its so fun when we are able to funnel conversations back into the reseven. Go w talk about a 50 cut down to only about 19 reduction. We can always put the nice conversation back into it. I also want to pivot this back to iran because the foreign minister saw the bloomberg editor in chief earlier this week about the strait of hormuz. Heres what he said. We certainly have the ability to do it but we certainly dont want to do it because strait of hormuz and the persian gulf of mexico are a lifeline. We play a major role in securing it but it has to be secured for everybody. Romine we welcome in henry rowan, he spesheses in Iranian Foreign and domestic policy. You look at what happened today and the previous incident, a week, week and a half ago where apparently a u. S. Navy ship had to intervene. Whats the message that iran is trying to get across here . Its great to be here and thank you for having me. Todays incidents, the looking like two tankers now as an extraordinary their brazen step that the iranians have taken and i think their message is specifically tailored towards the brits here, which is the british have held on to this tanker iny brat air for several gibraltar for several weeks. Earlier today a court ruled that the british can continue to hang on to that for another month and this is a move that clearly the iranians will not tolerate. Big step to ry take, the seizure or two shims in the strait of or hormuz. Just yesterday we were hearing talk that iran was willing to negotiate with the United States, do you think this will change things in some way . Sure, so yesterday the announcement of releasing these videos very provocatively, kind of taking the guard boat circling this tanker they had seized. I read that as a clear attempt to take away from the fact that the u. S. Had shot down an iranian drone yesterday. But todays steps are another level of brazenness and confrontation and i think it serves to undermine what the foreign minister is doing here in new york in trying to portray a much more moderate stance, willing to negotiate and cooperate and also that they as a rule the strait of hormuz as under their watch and them consistently said that they stand for security in this region and of course the steps today are pretty clear undermining of that stance. Henry, walk us through the appropriate policy response is here from the u. S. Side. Weve heard a lot of analysis in the last couple of hours between the u. K. And oriental and the u. S. Working with the u. K. And our partners here but what would be the appropriate policy response . I can tell you what i think the policy response will be and i think it will be very little from the u. S. , frankly. I think theyll try to use this as support for their newmar time Security Initiative called center fell in, this is which is sentinel, which is aimed at increasing security in the persian gulf of mexico but as far as seeing for more aggressive steps entry the u. S. Navy in the region. I doubt well see more of that. President trumps line is whether it impacts u. S. Assets or individuals. It would be a totally different story if it was a u. S. Flagship or who whether there were americans aboard the ship. I do it were going to see a very significant response to this. Henry rome, thank you. Thank you, my pleasure. Coming up, after a slow start to 2019, the market gets its first taste. This is bloomberg. Romine chewy coming back down to earth after opening 49 above its opening price. The better than expected forecast not enough to shake valuation concerns but the c. E. O. Insisted there was plenty of opportunities for growth in our interview earlier here on bloomberg. We are earlier days in our growth. Combine that with the fact that were trying to create a onestop sweat shop, which hasnt been done before. Romine this the same day as medallia opened 62 before its opening boosted price. Best starts since any Opening TechnologyCompany Since thue chewy back in june. Stringer. June we thought medicine medicine and yesterday. Phreesia is this appetite for new Tech Companies still there . Apparently it is. Ll the bankers and traders spent some time on the beat. Before, that i. P. O. s were going public and their prices were skyrocketing out of the gate in the first opening session. Phreesia yesterday and chewy today proves that is still there. Investors are still into techs and theyre going to keep bidding them up. I imagine its going to be a good second half because were still awaiting some big names. Pelaton, for example. These i. P. O. s, these bankers are trying to build momentum, especially ahead of big deals. And the more momentum and excitement you can get for i. P. O. s now, the better they can perform later. Pretty much any Technology Company if youre based in the u. S. Can go public and generate momentum and excitement. Thats why you need these other Companies Companies to go out first and get a good reception. Which ones cant go at the moment . Thats a good question. Uber and lyft are some of the underperforming i. P. O. s this year. Which ones kamm cant come into the markets as greeted with open arms . There is one segment of technology i. P. O. s not going very well. And those are ones overseas, especially china. When a Chinese Company tries to list in the United States, mpared compared wo to the u. S. Based sectors, theyre up 20 . Chewy reported their earnings about 50 up from their i. P. O. Price about a month ago. You can see the hot response theyre getting in the u. S. As opposed to a company that just went public yesterday. Their i. P. O. Shares have tumbled. You have to like 0 or 30 of those companies that are up about 50 or more from their i. P. O. Price and abouting about 10 have more than doubled. Not just some the enthusiasm in the secondary marketings but why werent those companies able to raise more money and why they sort of gave all those profits away . Thats a good question and kind of unanswered. On the one hand its great the depeans are getting strong receptions but on the other hand if youre medallia, you have to be thinking wee couch gotten some of that money if wed just pried our i. P. O. Better. The bingers will tell you theyre thrilled. But a strong reception is strong reception. Romine have you ever heard that banker say im not thrilled with this idea . Exactly. The founding kubel behind medallia. We thank you very much. Now a quick check of the nations business headlines. Its been less than two years since medallias cuts were allowed. But costco is making it clear there need to be more dismissals. Needs to be ng ore digital. And alliances controlled by the richest person in india. And one of chinas biggest Tech Companies will team up with selfdriving. Com cars there. 10 cent is expected to begin operations at the end of the year. Caroline, one story that caught my eye was about divorce. Sorry, i guess im the bearer of bad news. Now splitting up after the age of 50 might be tough on your Emotional Health but what about your pocket . This socalled gray divorce, this which is above the age of 50. It has huge economic effects, particularly for women. The poverty levels for that is like 27 . The most of any age group. More and more people over the age of 50 are saying im out, i quit. Really . Yeah, i hear more and more of these stories. I was giving it some thought. Not with pelaton. But youre right. You have seen a lot of older people and i know people personally who have got on the a certain age and say theyre willing emotionally to go do this. Women take a hit. By the age of 50, you have children. They tend to be sitting back at home with you. Though the generation, millennial and fewer divorce rates. Coming up, a look at the feds roller coaster. And a look at things before the fed meets in a few weeks. Thats next. This is bloomberg. I dont know why i didnt get screened a long time ago. I kept putting it off. What was i thinking . Ok, mr. Jones. Were all done. I told you it was easy. With life line screening, getting screened for unknown Health Conditions is so quick, painless and affordable, youll wonder why you hadnt done it before. So if youre over age 50, call now and schedule an appointment near you. For just 149 a savings of over 50 youll receive a package of five screenings that go beyond your doctors annual checkup. Ultrasound technology looks inside your arteries for plaque that builds up as you age and increases your risk of stroke and heart disease. After all, 4 out of 5 people who have a stroke, their first symptom is a stroke. So call today and start with a Free Health Assessment to understand your best plan of action. So why didnt we do this earlier . Life line screening. The power of prevention. Call now to learn more. Im Mark Crumpton with first word news. President trump says he will work with the British Government on a response to irans seizure of a British Oil Tanker in the strait of hormuz. As he was leaving the white house to spend the weekend at a golf resort, he told reporters we have a very close alliance with the u. K. , i will be working with them. Irans revolutionary guard announced that it sees the tanker today escalating tensions in one of the worlds Critical Energy chokepoints. A day earlier, the u. S. Said of downarships, one of them an iranian drone. Today seizure was the second move against the british of an overall week. The british navy intervened in july 11 to stop Iranian Forces from blocking a commercial oil tanker leaving the persian gulf. Ande will talk to the u. K. We have no written agreement but we have an agreement. If they have been a great ally of ours. We heard it was one or two. We will be working with the u. K. They will have a new Prime Minister sandwich is a good thing and we will be working with the u. K. But we have no written agreement but i think we have an agreement which is longstanding. British foreign secretary the cruise says apprised a range of nationalities but are not believed to include dish citizens. Bulgarias parliament has approved the purchase of eight new fighter jets. This is part of a planned to replace their aging soviet built a jets. The update will bring the nations air force in line with nato standards. The 1. 2 billion 2. 5 billion deal with Lockheed Martin equipment,e jets, and pilot training. Much of the west and northeast face a massive heatwave this weekend. More than 400 85 Million People are under heat watches. Nearly 100 cities across the country will break record temperatures. In new york, the high temperatures have forced organizers to cancel the citys triathlon. Global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. The feds speaks and of the market moves. Says the market on a little bit of a roller coaster ride with his comments this week on the central bank rate. The story wanted President Trump to weigh in this morning. Isning us to decipher this peter. Talk to us about his comment. When you are so close to lower bound, part of what you want to do is increase the rate at which you move or the magnitude of that move to start a policy response quicker. Does that work in economics . The theory is fine yes. You want to get ahead of the problem. John williams has been working on the problem for 20 years. Was a theoretical problem that it real one. He is deep into this and if you read the speech on its own, it is on the objectionable. Mainstream thinking. The problem was that he did not make clear that he was talking situationtential where there is a serious economic downturn. He made it sound like it could be interpreted and was interpreted by the market as advice for what should be done today and that his work where he went wrong. There is a compelling argument he made here. I am going through Donald Trumps tweets. Right now he is tweeting about kanye west but before that, he made an issue about the idea of rates relative to the ecb and the rest of the world. He said our interest costs are more higher than other countries when they should be lower. There is an idea that maybe the fed is moving in a direction we think its going to move because other banks or other parts of the world are at a lower point. The fed it needs to set Interest Rates based on u. S. Economic conditions. It is true that the rest of the world does affect the u. S. You would not want to have a rate set so high that it caused the u. S. Dollar to search and hurt the trade deficit. You think this is a decision being made with regard to u. S. Economic conditions . That is what the fed is doing and that is what they should be doing. The fed has its head screwed on straight. Has a column in business week where jay powell has a pair of your phones on because he is focused on the job not what is coming out of the white house. We have a story hitting the the right now because boston fed is speaking right now about the perils of political interference. Talking about a warning that the wastries last inflation caused by white house meddling. They are clearly pushing back against any view their cutting because trump wants them to. Are circling the wagons even if there may be disagreement twin voters and nonvoters, they do agree that they should focus on the mission and not on president ial tweets. Another interesting thing we was on iran. We know that you were writing a piece for the next issue. We saw the odds of a 50 basis point cut drop due to the iran seizing the u. K. Ship, inflation rose which means the odds of a hike come down. Now only 19 odds. No more looking like a 25 to 50. How does this folded to iran . I drafted my article today before this latest seizure of british tanker or two by the revolutionary guard. At the time, the markets have been very calm. All of these things had not managed to push of oil prices but i guess there does come a point where if a rhonda does enough, it does start to alarm people, push of oil prices which eventually would cause higher inflation. Is that really going to be effective in this environment . Are we going to temper all of these global headwinds by going down 50 basis points or 75 basis points . I even heard a 75 but im not saying all of ones. Fed did cut 50 basis points it would be seen as a scary thing. What do they see that we dont see . Datau look at the actual not just what might happen, its looking pretty good. Its not looking like 50 basis point cut territory. That is why the markets are responding reasonably now that they have back from the 50 basis point territory they got into. We always love to have you. Up, billions of dollars and nowhere to put it. The hardest part now maybe finding something to do. This is bloomberg. The stress that investors have spent years preparing for an apocalypse with cash to invest but nowhere to put it. 80 billion in cash, that is almost the entire what is the issue here . It is just that companies are they actually healthy are the have not deteriorated enough to make these attractive investments . Wax that is the big question. What is happening is that the Federal Reserve has promised to cut Interest Rates and lift prices so they have a wide andow to add on more debt cap the Capital Markets and they are like zombies. You talk about the performance of junk bonds which is 10 . That outperformed which is about 4 . Does it make sense for some of these funds to go into junk or of they just sitting on their hands for the eventual distress debt to come their way . We show they tend to be waiting because they are dedicated funds. They raise money for distress. They told their investors they we are going to be distress investors. Be enough. t that whats fascinating is some of them are even manufacturing their own distress. They are hedge funds instead of waiting for companies to go to distress they are actually pushing them into it. One of the most famous ones is are really us. It is widely seen that they benefit from having credit default swaps. Agitating and pushing companies into distress but for the most part, that is very difficult play and everyone is sitting and waiting. It sounds like if you believe the Market Pricing we are heading in this lower for longer rate environment not only here in the u. S. But globally. I assume that has to put a lot more stress on these investors in regards to finding companies that might be on the price of of what may be saved by the interestrate environment. Is that a bad thing . Are going toes survive some companies will be better. Some of them managed to do a turnaround and that will be great. We would rather have a Company Become healthy. The problem is, are they just kicking the can down the road when they actually do go bankrupt or default, they will be really low recovery levels and that will cause huge volatility. It will cause or exacerbate another crisis. Covenante talked about where these companies are coming to market. It also means the creditors cannot go after these funds enough because there is not the way to do it anymore. How much is a covenant like folding over into the lack it is one of the reasons why we dont have as much distress. Before, that kind of covenant measured from its. If the Company Started to perform poorly, lenders could get involved. We dont have them anymore so there could be as many defaults or less but the cycle would be elongated. Nobody thinks that we are out of the Business Cycle or credit cycles have ended it just means that maybe down the line there might be more pain to come. Patience is a virtue. A quick check on the latest business flash headlines. Store shows it is continuing to grow at a robust pace. Shares are up 14 . Apple saw a slight rise in sales growth. Bank of america says that chinas App Store Revenue trends could be a problem. Be a basis the slowdown in china sales could be due to a soft boycott of apple. Pepsico has taken a hold in south africa. That is your business flash update. I have to say, a week ago i was sitting here complaining about getting stuck on the subway for an hour and a half. We are staying within the power system great going back to talk about con ed and this heatwave that is going to come. Its going to hit upper 90s this weekend. Im getting out of town. Con ed says the system is ready. They dont see anything that should cause massive blackouts. You are looking at a live shot. Theres nobody out there. You cant go out there you are sweating. What is your favorite ice cream flavor . Chocolate. Me, its my dna. To this heatwave, we are entering a heat emergency. I did not know that but i do know that after that big issue with con adhere last week, there is a big concern about how prepared they are. Not only in new york but other systems along the east coast. Accumulated heat thats not just one day but multiple days, thats a heat map area where are you going where there is something going to portland, oregon but now maybe i will rethink it and sweat it out with you guys. I dont think there is a cold spot on this map. Preparingthat time and the race is canceled. That will prevent their health. Next, the ridehailing Company Wants to be the main destination for getting around the city. This is bloomberg. General motors is bucking convention by boosting production of its new corvette. With thetin spoke president of gm about the changes to that sports car. Harde have really worked to keep the formula of corvette from and attain ability and aspiration standpoint intact. Putting the engine in a midengine location here is a big challenge. A lot of the supercars are very expensive. The obtainable aspirational took thecorvette, we front engined corvette to the absolute limit in terms of horsepower and capability and it will make a to this midengine configuration, you can see we get an incredible value. A hundred 60,000. An engine that makes 495 horsepower 475 footpounds of torque. In incredibly engineered package. Alsotility of the car was a big fear for we introduced it last night. We can still carry golf clubs and we have a trunk which is a front truck than a rear compartment as well. Is the best of all worlds and wrapped up in a beautiful design. You are going to be competing some people charging the same. One of the things you lost was the four on the floor. A 1962 and i had the four on the floor. I cant believe youre giving up the stick shift. I have a 62 as well. With four on the floor. As an important and iconic piece it has been, it started off as an automatic. It started off with eight to speed powerglide in 1953. It is not totally unheard of here and we saw a ton of this is a today but whole different formula here with an eight speed dual clutch transmission. That enables a lot of performance from a zero to 60 standpoint because of the giving we have chosen but it is also lightning quick area it is quicker than any human being in terms of a manner manual it is shift or automatic a blast to drive. We have done some things automatically that we could never do with a manual transmission. If configuration is going to be delightful. A lot of susan sophisticated technology. Give us an idea on cruise and where that stands. Are you still on target for the commercial application in 2019 . Cruise, weke super have a year that we would like to do it but we are going to let safety gate this process. That is the core of our value as a company. And we are target doing some great things. While we were out her, we had a Board Meeting so we got to see the progress and where the engineering is and where the progress is. Activityery integrated with left of different engineering sites within gm around the world. This is where it is happening. See it and ito was a great team and kyle and dan and daniel the whole team is really energized. Lets have a quick check of lyft. It is embracing the new york subway. As i might be this weekend. As the city regulates ridehailing, it will update Public Transit information to his app. This is the shrewd way to look at it. It keeps you in the ecosystem even if you are not necessarily going to take a lyft this time, when youre thinking about your trip, lyft is on your mind. Thats a big part of it. This feels very reminiscent of uber when they were issuing their ipo. They talked about the ecosystem, the core, the app really keeping you in there. What is their plan to do if theyre trying to keep you in look to expand into other things . York, they bought motivate so that is a key part of it. It can get a bike through the lyft at. The dream with the subway is getting connected up to the andal buying your ticket playing a role in that. Speculating even further, you can imagine if you are the facilitator of transportation maybe someday far down the line you would have government contracts saying we could run this better than you could. That is speculative but the idea is if our expertise is transportation, we should be involved in every part of it and we will figure it out down the line. What about the plight about their engagement down the line . They haveshion where a social media component and you can talk. Have you heard any idea out of lyft or uber about moving in that direction . Engagement was not a key metric in the ipo. They want people who are using it monthly and spending a lot of money on the up. I dont think so far it is not something where they have an advertising business in the app. I think a Loyal Customer is somebody who is frequently aged with the lift at area lyft up. And that is going to have you choose lyft over over. What about the regulators . Get into bed with the subway does that make them less of a target . Has always benefited from the fact that the founders have always been true believers and transportation. There has been a bit of a contradiction running the Company Getting into cars. I definitely think there is a way to win over the City Government types who really care about transit. Their Public Transportation system they are running. Integrating into lift bank at saying they really support transit then lyft can get someone from the subway or the train to the area where maybe Public Transit doesnt have coverage. Thank you for talking us through it. U. K. Announces its new Prime Minister on tuesday. I am taking a look at the ecb as it announces its key Rate Decision on thursday. Numbers for the Second Quarter u. S. Gdp come out next friday. Technology is up next in the u. S. This is bloomberg. I dont know why i didnt get screened a long time ago. I kept putting it off. What was i thinking . Ok, mr. Jones. Were all done. I told you it was easy. With life line screening, getting screened for unknown Health Conditions is so quick, painless and affordable, youll wonder why you hadnt done it before. So if youre over age 50, call now and schedule an appointment near you. For just 149 a savings of over 50 youll receive a package of five screenings that go beyond your doctors annual checkup. Ultrasound technology looks inside your arteries for plaque that builds up as you age and increases your risk of stroke and heart disease. After all, 4 out of 5 people who have a stroke, their first symptom is a stroke. So call today and start with a Free Health Assessment to understand your best plan of action. So why didnt we do this earlier . Life line screening. The power of prevention. Call now to learn more. Emily im emily chang in san francisco, and this is bloomberg technology. Microsoft extending its lead at the worlds Biggest Company by market cap, and the only member of the trillion dollar club on the strength of azure. We will break down tech earnings so far and look ahead to next week. Plus, what a week it has been for big tech execs on the hill