Italy at a record low. We will be going to italy in the next little bit to talk to maria tadeo about those talks. The lira down 6 10 of 1 . 8 10 of 1 germany lower. On a flurry of geopolitical headlines, we are joined by tom globalndstrat advisors head of research. Anything in the last couple of weeks to do with the fed, to do with earnings, that has changed your outlook fundamentally on yearend s p 500 . Tom i think theres been a lot of stresses to our base case. Our base case is assuming there is going to be china trade tensions and there isnt going a fed change. Vonnie how much is that a problem . Clearly we are seeing business spending cut back. We are also seeing businesses blame china, like autodesk, for example. How much is it actually impacting the economy . Tom i think the Downside Risk is really escalation. If we are talking about what was implement it even just in the past week, i think the levels of tariffs are still something businesses can work around. I think theyve proven to be somewhat dynamic in terms of either sharing costs or moving supply chains, but i think investors dont like uncertainty. Out thei want to point three month30 year yield, now also in negative territory. We are seeing the yield invert and so many different places right now. Is that impacting at all your outlook for stocks . It must be by now, surely. Tom yield curve and versions really sending a signal. It is not something anyone should ignore. Weve written a rough this weve written about this really extensively. Yield curves that generally result in recessions have almost always been because the front end cells faster than the long end the front end sells faster than the long and. The only exception where you saw a rates fall in the long end to cause an inversion was 1998. That was a risk off move. I think thats whats happening today. I think that the inversion is telling us markets are really nervous, but i dont think it is a Business Cycle thing. Vonnie if this is such an off move, why are we not seeing a pause in the equity bull market . Tom i think weve seen a huge pause. ,he stock markets being held up but if you look at the diffusion of stocks, theyve done quite poorly. If you look at the vix, clearly markets are nervous. But i think we are at the end of a pullback. We are in these sort of august doldrums. As we get into september, high yields are almost at alltime highs now. I think the next move is actually higher. Vonnie where would you be positioning yourself . We had plenty of people say hold on to some cash, with a lot of dry powder out there. Lets say we are just talking about broad asset allocation. I think there needs to be some hedge towards macro events. If they want to use gold as a proxy, its proven to be pretty good this year. I think bitcoin actually serves that for a lot of folks as well. But in terms of where is their actual, genuine yield and the opportunity for big moves, i think it is stocks over bonds. I think equities are still pretty attractive. Within equities, i would still be a little contrarian. I wouldnt want to be too defensive. I thick you want to belong cyclicals into yearend. Vonnie really, tom . Is that because you are confident in the u. S. Consumer . Tom i think theres a fundamental divergence. One, i think the of us consumer is still very strong. Areink u. S. Corporates managing the trade war pretty well. Stockingeen a huge d globally thats hurt pmis, and because the yield curve to flatten, but the long end has been steepening. That has led the pmis by 16 months. That tells us that starting this fall, we should see an upturn in pmis. If that is the case, i think we have suitable impulse coming bash deck i think we have cyclical impulse coming back i think we have cyclical impulse coming back. Ofnie when it comes to some the big ticket items, you would actually be buying those 100 . Tom yes, but this is under a basic presumption that the trade war doesnt move to the phase of mutual destruction. At the end of the day, china and u. S. Cant win this trade war. So really, our base case is that this doesnt escalate. Thats the risk. Vonnie do you look at every tweet from the president and change your models . What are you waiting for . What would be the catalyst for this to be a change in how this tit for tat is going . Tom it would tell you how much the world has changed if we modeled it after tweets, but it doesnt seem like that is how markets are behaving these days. I think the reality is we have to assume that there is some basic rationale for escalating trade, and if the trade escalation is based on winning 2020, i think that is the real downside, but i dont think a 2020 republican win is possible with escalation of the trade war. Vonnie say that again, tom, because i think thats very important. It is a little bit akin to what dudley was saying yesterday in that opinion piece. Not exactly, but people are throwing out the idea of a nontrump presidency the next time around. Tom in fact, that is something we sent out to our clients yesterday. Theres actually quite a lot of constituents cheering for a market crash. Democrats kind of want that. Shortsellers kind of want that. Europe is cheering for it, and a strange way. Anybody who hates trump wants the market to crash. The reality is that an equity crash, which is really related to trade at the moment, is actually supportive of someone who is against trump. Or in other words, it is almost political that if someone wants the market to rally, and is to rally, it is almost a pro trump view. Vonnie ok. If that is the case, wont President Trump do anything and everything to ensure that doesnt happen . Tom yes, and i think thats why of highlighting and spotlighting the fed because i think he needs the said to be supportive. The fed has done their job, and i think at the moment, it is really trade visibility that is the linchpin here. I think the key is not to escalate the trade war. I have no say in it. Im just observing it. Only a few people in this world are actually going to control what happens with that, and i think in 2020, a republican win is going to be very difficult if the trade war is escalating. Vonnie dudleys peace blew it out of the water, that if the fed were of a mind to, it could become a more political body than it is. The fed back and said absolutely not. That is not our mandate, not our constitutional charter. So how do you interpret what the fed does next . What does the fed do next . Tom i think powells mandate, even though it is maybe just explicitly unemployment and inflation, bernanke he talked about it, Financial Stability is really the third mandate. I think we are approaching conditions that question Financial Stability. We have a drop in rates, and inversion in the curve that is so prevalent, and if it is not related to economic fundamentals, it is telling us it is a dysfunction of the financial system. I think a lot more easing is actually required. Hink the fed means to cut i think the fed needs to cut a lot more than fed futures are talking. I think we need more like 75 or more. Vonnie and if we dont get it, what is your forecast for the s p at the end of the year . Tom 75 is because at this moment, this is what the curve is telling us. 75 is required to bring the fed funds below the fiveyear. Deescalation,de i think the rate structure is going to change because buying safety in the u. S. Is going to alleviate, so i think rates rise, and that is bullish for stocks. That would change what i perceive as required fed cuts. So i think it is a dynamic question. Last year, the central bank was really an obstacle in the markets mind, because we were talking about autopilot and cuts far away from neutral. The fed has completely changed its camino patient. I think that is a positive its communication. That is a positive, i think. Vonnie we have to leave it there, but it is great to talk to you. Tom lee, Fundstrat Global Advisors head of research. We have breaking news now. The queen has approved the plan suspension of parliament. This is Boris Johnsons strategy on brexit. It has been hitting the headlines this morning. It means that if parliament is suspended, Boris Johnson could potentially go ahead with a no deal brexit scenario. There are some members of parliament that are not on board with this, but the queen has approved the plan suspension of parliament. That takes one obstacle out of Boris Johnsons way. Lets check in now on the bloomberg first word news. Heres kailey leinz. Kailey in italy, it appears a new government will be headed by current Prime Minister giuseppe conte. This is following days of stop and go negotiations. Puerto rico is bracing for a hit from Tropical Storm dorian, likely to bring heavy rain, but not the devastating winds seen two years ago with hurricane maria. Forecasters say the storm is likely to become a hurricane after hitting puerto rico. It could threaten the southeastern United States this weekend. Drugmaker Purdue Pharma and the family that controls it have made an 11. 5 billion offer to resolve all lawsuits from the opioid crisis. The proposal calls for purdue to declare bankruptcy and hand itself over to a trust controlled by the states, cities and counties it suit counties that sued. Meanwhile, they would have to come up with 9 billion cash. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im kailey leinz. This is bloomberg. Vonnie thank you. Coming up, central bankers can be politicians, too, according to Bloomberg Opinion today. This after bill dudleys Bloomberg Opinion piece yesterday sparked debate over President Trumps relevance to the federal reserve. The opinion piece today says mario draghi proves a central bank can be political. The author, next. This is bloomberg. Vonnie live from new york, im vonnie quinn. Is is Bloomberg Markets lets get an update on Global Markets in london with emma chandra. Emma we are looking at a mixed session for stocks. U. S. Equities now and the green after opening low. If we look at europe, we are still negative, but we are off the lows. It is tech that is the laggard on both sides of the atlantic. The s p 500 in positive territory. The tech heavy nasdaq is still negative on the day. Investors waiting for anymore developments in the ever volatile trade war between the u. S. And china. We are just days away from the imposition of new tariffs. They are due to be staggered from september 1. It is trade weighing more heavily on some of the movers we are looking at today. Autodesk,show you falling today some 12 , having its worst day since november 2017. Analyst downgrades after the company cut its fullyear outlook on fears about the trade war and the slow down in the chinese and german economies. That is impacting other software shares. Both adobe in the u. S. And sap in germany. I want to draw your attention to this chart showing the russell 2000 hitting a seven month low. That is the white line here. Supposed to be more insulated from the trade war tend to be more domestic focused, but there are a lot of tech stocks within the russell 2000, and of course, the trade war has not been good to tech. Lets take a quick look at the pound against the dollar, falling as much as 1 today, as we heard Boris Johnson plans to suspend the u. K. Parliament for about five weeks ahead of the brexit deadline. Vonnie yes, and we will be speaking about that in a few minutes. Thank you for that update. The debate over the role of politics in Central Bank Strategy continues following new york fed president bill dudleys Opinion Column yesterday, where he suggested bankers need to be political. A new opinion piece today contrasts the fed with the European Central bank. Ferdinando juliano says a Political Central Bank does it just does exist. He joins us now. On one hand, we have the federal in 1919,et up contrasted with the European Central bank, set up in 1998. Explain why the European Central bank gets to be a little more political than the fed. The first i think reason is because the euro zone is still an incomplete monitoring union. The European CentralBank President , in this case mario draghi, for the last eight years has been advocating closer integration, and this is a political statement which is existential for the survivor the survival of the euro. The second thing is the negotiations between the ecb and the various governments. There isnt a Central Government in the euro zone. Theres a european parliament, but this is often perceived as weak. They have to negotiate with individual government, for example, when rescues are needed. Thick about what draghis predecessor did with ireland or italy, when he necessitated the could it be for banks or bond purchases for the government, or what happened with greece in 2015 over emergency liquidity. The ecb is inherently very political. Vonnie how does the ecb and shore there isnt youd the ecb how does the ecb ensure there isnt overreach on the part of its members . Ferdinando ultimately, the president does do regular hearings with the european parliament, where he is asked questions, much like the chairman of the fed does with congress in the u. S. Clearly, the ecb president is bound to be a more political figure. He will need to rein himself, anyway, and draghi tried to do that when he set up the outright monetary transmissions, which is the basis of the whatever it takes proclaim he made years ago to save the euro. When he created that set up, he made sure that countries have to ask for help from the euro zone government, and these conditions are negotiated with the government. That means the central bank is not making the mans on its own making demands on its own on governments that need to be rescued, like greece or ireland. This is a way to make sure that they central bank doesnt overstep its mandate. But isaiah said, the institutional structure of the euro but as i said, the institutional structure of the is so incomplete that it is bound to be less constricted. Whetherexplained to us one is better than the other. Is it better for a central bank to be able to be political, or is it better to have that wall up . Ferdinando i think it really depends on the starting conditions. In the u. S. , you can see a role for a less Political Central Bank because Everything Else works better. Its been in place for more years. Democracy at the american level obviously is more complete then at the euros in level. There is a fiscal capacity, the ability of the federal government to step in and help countries which face shocks. In the euro zone, all of this is level. Very you can see the role for a more political ecb. Vonnie it is a wonderful column today, worth everybodys time. Bloomberg opinion editor ferdinando giugliano, thank you. This is bloomberg. Vonnie with a record low on the 30 year treasury yield this morning, it is time for the muni moment with taylor riggs. Taylor joining me is invesco senior municipal strategist stephanie larosiliere. How is this translating into munis . Are they still attractive, and how low and how fast yields have come down . Stephanie thanks for having me. When we think about whats been happening in munis, the right story has not abated the demand. Yeartodate we are at a record saving pace. We are seeing about 62 billion dollars of inflows into muni funds, the largest number we have seen since we started keeping record in 1992. 33 consecutive weeks. While it is harder to find some value in the muni market with rates as low as they are, it has not changed the fact that high net worth, high income earners do need that taxexempt income, and they are still looking at munis for that. Taylor you talk about Retail Investors having the positive feedback loop, where they see the value of their portfolio rise and they continue to invest. Is that a risk for creating a bubble . David at this point it doesnt stephanie at this point it doesnt feel like a bubble. It is definitely something we Pay Attention to. We want to know investors are entering the market for the right reasons. Past performance is not indicative of future results. We feel the market is, from a fundamental perspective, and a very good spot. When we look at the salt cap deductions and the fact that people are facing much higher federalaxes on the side, that definitely makes sense. While there is a bit of rearview in terms of why they are getting into the market, it still feels like they are doing it for the right reasons. Taylor can you assume further spread compression as we search for anything with yield . Taylor definitely stephanie definitely. It is getting tougher, and we are looking further out in the curve. We like the 20 to 25 year part of the curve. When it comes to some of the macro events, maybe that results in some spread widening, and that will give us a little more yield we can pass on to investors, but it doesnt feel like we are quite there yet. Taylor biggest risk for q4 . Stephanie trade wars, currency wars, macro vents. Taylor thank you. Invesco muni strategist stephanie larosiliere. Vonnie oil rising for a second day, with expectations of crude inventories shrinking. We had brent crude above 60 a barrel today. This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy a new samsung note. Click, call or visit a store today. Vonnie live from new york, im vonnie quinn. This is Bloomberg Markets. We have breaking oil inventories. Crude, wti, and also brent. Right now, even though economists are looking for a drawdown of 2. 9 4 Million Barrels for the week of 2. 9 4 Million Barrels for the week of we got a drawdown of more than 10 Million Barrels for the week ending august when the third. Once again, almost five times the amount the oil market was looking for. We will see what the reaction is if we can pull that up. Gasoline inventories, we had a drawdown of 2. 01 Million Barrels. Refinery utilization came in at. 7 . As you might anticipate, oil rising more than 3 as we get this massive drawdown in crude oil inventories. Lets check emily bloomberg first word news with kailey leinz check on the bloomberg first word news with kailey leinz. Shows all top five to credit candidates beating donald trump in a headtohead matchup. For the first time during the trump presidency, more voters think the u. S. Economy is getting worse rather than better. Meanwhile, President Trump aides hey has told tol pardon them if necessary fasttrack billions of dollars worth of construction projects. Theyve also been told to private landseize and disregard environmental rules. In hong kong, signs that the recent protests have residents speaking about leaving the city. Applications for good citizen cards rose almost 50 in august. Those certify that a person doesnt have a criminal record, and are needed to apply for visas for other residencies. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im kailey leinz. This is bloomberg. Vonnie thank you. As u. K. D weakening Prime MinisterBoris Johnson announced hed asked the queen to suspend the nations parliament for a month, raising the risk of a no deal brexit. The queen subsequently gave her permission for this to happen. The british pound 7 10 of 1 weaker. For more, lets bring in ime, Bloomberg News reporter. Was this the catalyst needed in order for the no deal brexit scenario to become a real threat to europe . Yes, i think on the market side of things, as you said, we are at 7 10 of 1 lower on the pound. I think what that shows is that this no deal risk was already to some extent in the market, but certainly the fact that this has ,een confirmed by the queen this plan to suspend parliament for five weeks will go forward, makes the risk of a no deal much more present in investors minds. Vonnie explain to us the process. Boris johnson came up with this plan, announced it, then went to the queen. Could she have said no . Charlotte this was a topic of conversation throughout the day today. It would have been very unusual for the queen to say no. She tends not to like to get too involved in these kind of affairs of state. I think almost everyone would is expecting everyone was expecting that she would sign off on this move, even though it is unusual for the u. K. Parliament to be suspended for this length of time, particularly when we are in the midst of something as important as brexit. Vonnie what does it allow Boris Johnson and his Party Members to do in order to make the no deal brexit scenario more likely . Charlotte i think the idea there and the reason that investors are worried is that what you are doing is effectively running down the clock. As you said, it is a five week break, and that really doesnt leave a lot of time for lawmakers to do some of these plans to try and avoid a no deal. There are also people that think that what johnson is aiming for with this maneuver is to engineer snap elections. We have already had the Opposition LeaderJeremy Corbyn say that he plans to move for a vote of no confidence in the government, which could ultimately lead to fresh elections. Vonnie it obviously impacts europe. It also impacts ireland in a very unique way because, of course, the question of the backstop is front and center here. Weve managed to speak with the deputy Prime Minister a little while ago. Lets have a listen to what he had to say. Now we have a British Government who seems to be simply wiping the slate clean on the irish issue in terms of the commitments theyve made. We can never sign an agreement with that approach, so weve always said if there is to be a no deal brexit, it will be the choice of a british Prime Minister and a British Parliament to allow that to happen. Theie Simon Coveney there, irish deputy Prime Minister. What does this mean . Europe has said it is going to back irelands stance. What does europe decide to do on this question of a backstop, and the fact that it is now maybe not being agreed to in the same way by britain . Presumably, this is the other way of interpreting what johnson has done today. You either think he is pushing towards a no deal, or that he is forcing europes hand. We actually did see a little bit of a rebound in the markets on tuesday because some of the lines coming out of the group of seven were making investors think that europe might be able to move on that backstop issue. It has been one of the main sticking points of the talks. Johnson and governments position has been that it is not necessary, and there are other ways of achieving the same goal, so that is going to be the next question for europe and for investors. Vonnie charlotte, thank you for that. Once again, the british pound is trading above 1. 22. We will see how this continues to play out. Clearly there is movement in europe and among european leaders off the back of this. 1 . Er by 7 10 of up,ng up come up coming cycling startup peloton files for an ipo. This is bloomberg. Vonnie live from new york, this is vonnie quinn im vonnie quinn. This is Bloomberg Markets. Blackstone offering to buy out the remaining shares of toga energy of total grass , trying to privatize the slumping Energy Companies they control. Joining us is the oil and gas reporter for bloomberg out of houston. Does this come as a surprise to investors . It is not the first of these kind of deals we have seen. The idea was always that blackstone would come in at some point and take out the rest of the units it didnt already own. It took stake of the general partner earlier this year. But the timing seems to have cut some investors buy supplies. Elines arelgrass pip up for renewal this year, so the thought was they would wait on those and then sighed whether or not to pull the trigger. Vonnie they are offering a 30 premium for all outstanding class a shares. How is that viewed by the community . Rachel i think it is a bit of a tossup right now because units have fallen 40 since the deal closed in march, but some of these other deals have gotten quite a bit of backlash. I dont think this one is necessarily going to garner that level of criticism. Some mixedhave seen results in terms of companies with their take privates and so on. Why are these particular assets going to be of benefit to blackstone . Rachel i think the criticism you see in some of these other deals primarily have to do with the structure of the Companies Since they are mlps. A lot of the backlash comes from interests aree aligned with unitholders, so thats where youve got some anger from investors in the case of american midstream. In this case, it does seem like blackstone made this decision without doing Something Like cutting the distribution, so i dont think you are going to see that much criticism. Vonnie the offers for these other firms you mentioned came after bidders took control of the general partner. How does that differ from this case . Rachel it is the same case. I just dont think youre going to see the backlash that would come from them doing something dramatic like cutting the distribution, which would obviously tank the units and offer them a cheaper buyout rate. But certainly you will see some mixed reaction as you always do with take private deals. They tend to be more controversial. But so far, shares are up for a number of other pipeline companies, so you could see more of these deals, especially for someone like in link, where you have such a big stake. Vonnie thank you for all of that. That is rachel adams Heard Joining us on the blackstone deal. Another deal in the works, peloton filing for an ipo that would likely be one of the biggest this year. They are seeking a valuation of 8 billion. Lets bring in bloombergs senior deals reporter ed hammond. That seems like a large valuation. This as one but of these companies that is tech enabled. It is a big valuation, but weve seen a lot of these kind of Companies Come to market with these, and some have done very badly like uber and lyft. Others, like beyond meat, have soared. It seems hard to tell exactly how that number will fare. Vonnie how sticky is this Customer Base . For jims, it has been an incredibly difficult environment s, itrd jim for gym has been an incredibly difficult Environment Holding onto your customers. Ed a bigbig part part of that is they are in the home. You actually physically acquire the bike and rent the service from them in your home. Unlike when you can say i will go to a different gym, they already have, to use the term, they have the front door open into your house. It is probably a much better model if you are trying to create that sort of stickabi lity among customers. Vonnie the basic subscription costs dirty nine dollars a month. The bike itself is ash costs 39 a month. Costs 39 a month. Is 2000. Tself ed its a very early market. This is a very new concept that thatbuy and enters you can buy an exercise bike in your home and do these remote spin classes. The numbers are pretty horrible. They lost 100 s they lost 196 million, up from the year before. This is one of these companies coming to market with a pretty unhealthy looking balance sheet. But what they are going to say is we need to keep investing. We need to be the player that emerges in this market. A lot of these tech enabled companies, thats their model. The vcs support them in doing it. It will be interesting to see whether the stock market gives them the same critical of the. Vonnie how much are they in trouble given the likes of competition from soulcycle and rumble . Theyve actually made it harder for soulcycle and flywheel because it does have the slight differentiation. The bike is in your home. You dont have to go anywhere to be in a physical studio. You can do it on whatever timeframe you choose to do it on. Plus, if you bought the peloton bike, you are must more likely to continue to use that product rather than go pay the additional 30 for soulcycle or flywheel. Vonnie weve seen mixed results from the major ipos this year. Lyft, uber. Beyond meat is one exception. What do investors hope will happen in this case . Ed this is one of those very hot ipos. People have been talking about peloton for a long time. It is the Market Leader in this niche sport tech category. It will be interesting in terms of how it trades and who buys into it. Companyany tech enabled theure going to have founders keeping control of the company through the vote. I think there is excitement around it, but the interesting thing is it is not an obvious analog. Theres nothing quite like this that has come to market, nor is there anything like it in the pipeline. Vonnie we will see how it performs. Our thanks to ed hammond, bloomberg senior deals reporter. It is time for your latest Bloomberg Business flash, a look at some of the latest business stories in the news right now. Citigroup has quietly raised its minimal wage to 15 an hour after House Financial ServicesCommittee ChairMaxine Waters prodded the firm to do so. Citi disclosed its position directly to waters. She had asked whether he would consider raising the mental wage to 20. Shares of autodesk the minimum wage to 20. Shares of autodesk dropping after thirdquarter guidance came out lowerthanexpected. Airlines onn on some bottles on some models of the macbook pro is growing because of concern that batteries could catch fire. Virgin atlantic, singapore and Thai Airlines have imposed their own restrictions. Coming up, tiffanys rises on an earnings beat, but Quarterly Sales continue to fall. Why the jewelers ceo remains optimistic. This is bloomberg. Vonnie live from new york, im vonnie quinn. This is Bloomberg Markets. Its time now for our stock of the hour, and that is tiffany, higher by about 4 after secondquarter earnings. Emma chandra has more. Emma thanks very much, vonnie. We should be able to show you how the shares are performing, and they are higher today following those secondquarter results, up around 3. 6 , the best day since around june of this year. The company beat when it came to earningspershare, also striking an optimistic note when they maintained their fullyear guidance. This came despite the fact that they also mentioned some ongoing macroeconomic headwinds, protests in hong kong being another headwind, and one that could worsen for them, and also missing on a Key Performance metric. That Key Performance metric is of course samestore sales. We mention it whenever we talk about retailers. Weve got a chart we should be able to show you that shows how they have fallen for the third consecutive quarter. Down some 3 in the second quarter, way below analyst estimates. Over those three quarters, the reason weve seen those sales fall is dramatically lower spending by tourists in the u. S. , particularly those from china, put off by the strong dollar and those ever simmering trade tensions. Those shoppers are crucial to sales in tiffanys brickandmortar stores, particularly its manhattan flagship on fifth avenue. Local sales were much better, particularly when you look at asia. It is becoming a much larger part of the revenue pie for tiffany, if you look at asia and japan and put them together, almost equaling revenue you get from the u. S. Really making a play for those shoppers in china, they are holding a Brand Awareness exposition in shanghai next month. Earlier this month, they announced a partnership with indias Reliance Brands as they make a play to the middleclass consumer there. Vonnie thank you. That is emma chandra in london looking at tiffany. Time for futures and focus. Joining us from this futures in focus. Joining us from the cme is scott bauer. Why is the market getting it so wrong week in, week out . Scott the expectations we seen have been wrong every week for months and months, so we are getting it wrong, and i think that this massive drawdown in what we are seeing as a snap reaction. When the dust settles from that, the overall theme is still the global slowdown. It is still supply versus demand. I think we are going to see oil get hit here. There is some significant resistance right above here in today,xas, so this rally i dont think it holds. Vonnie how about the dollar . We also have a stronger dollar, so it is like a double whammy. The dollar is at 98. 17 right now on the index. Scott no doubt about it. We typically dont see that. Like you said, its a double whammy. Years from now, we are going to look back at this period of time and how the commodity space reacted with the dollar reacted with gold, and there is just a wonderful economic environment that we are going to look back on and say, how did that happen . It doesnt usually happen like that. Vonnie rates have been a bit of a conundrum the last few days. We are back up to 1. 8714 on the 10 year. Where are you anticipating we go next, lower on rates or higher . Scott if you ask me for the next four weeks, i will say lower. For the next three months, im going to say higher. That may be contrary to what the popular belief is out there because people think the fed is going to continue lowering rates over the next fix to nine months or so, but i really think that a bottom has been set in, even though we are seeing negative rates worldwide and not here yet. I really think a bottom has been set in. Prosperscott bauer from trading academy, thank you for joining us today from the cme. Coming up, Aberdeen Standard Investments head of european equities then richie will join equities ben ritchie will brexit and much more. Here in the u. S. , the dow is picking up a bit of steam, up more than half. A percent we started off the day half a percent. We started off the day a little slowly. The pharmaceuticals doing well today. The s p 500 is up 4 10 of 1 . It is also higher on Philip Morris and a few and hewlettpackard enterprise, having a great quarter, the top performer at the beginning of the session. Revenue fell, but it beat margins and gave a good outlook. Autodesk down 11 , holding back the s p 500 from rallying further. Autodesk not underperforming year to date, but today definitely, the revenue guidance had investors back off just a little bit. The nasdaq up 1 10 of 1 now. The vix is above 20. The dollar index is above 98. The 10 year yield in the u. S. At one point set at 1. 47 . In europe, the ftse 100 is bouncing back after some declines, up to tenths of 1 . The dax in germany down half of 1 , and the cac 40 down. As italy continues discussions among potential leaders, is down about 1 3 of what percent. We will head to britain of 1 . We will head to britain and europe next. This is bloomberg. When you rest on a leesa hybrid mattress, bedtime is no longer simply the time you go to sleep. Its time to switch off and catch up. Enjoy me time, and we time. 40 winks or 8 hours solid. The leesa hybrid mattress combines two technologies to give you deeper rest and rejuvenation. 1,000 pocket springs provide edge to edge support, responsiveness and comfort, while premium foams relieve pressure. Keep you comfortably cool and limit motion transfer. Leesas hybrid mattress is not only recommended by experts, experts choose to sleep on it too. Try it yourself in any west elm store. Or order online and well ship it to your door so you can try it risk free. The leesa hybrid is american made. Built to last. And, because Everyone Needs a place to rest, we donate tens of thousands of mattresses to those in need. Experience the leesa hybrid mattress. Right now, its on sale. Order today. Go to leesa. Com. Vonnie 30 minutes left in the trading day in europe. From new york, vonnie quinn. This is the european close on Bloomberg Markets. Lets have a look at european markets now. The stoxx 600 down more than 4 10 of 1 . Down about 3 10 of 1 , off its lows. It is a down day across europe. In germany, the dax is down 6 10 of 1 . The italian 10 year yield is off its lows, but it did breach the 1 mark a little earlier on. 1. 04 , as money flowed into italy. Lets have a look at how we are doing in the u. S. The s p 500 up 3 10 of 1 , held back a little by some stocks down, including autodesk, down 11 following a disappointing earnings quarter. The stock itself has been doing