And last second. Up by at russell 2000 better than 2 and it has and it is ent years getting its own. 2 on the ent to 10year which is not a big move, be going crazy saying we should sell equities. To market is really trying figure out where the he can equilibrium s any given day. We will be fighting that until liquidity into the system. There is a t it in, six to ninemonth lag so that is is a next year when there pretty powerful equity blowoff be use people will just moving in aggressively at that point. Back but we will come pwabg first lets dive deeper into the action of the close. Im looking at what you were talking about small cap anding a ut rally up three days in row up more than 5 and back to january. It is pretty sunny. An last time the russell had see ime high last year we the down trend and russell 2,000 to get out of its own way. We looked at there last week or as it was week starting to go above the 200 day average. Look at this. Popping above down trend but did that earlier this summer. It will be interesting to see the buying ot i. How long it s. Eufplt interesting tobe see. Lyft and uber at which are higher even though saymbly bill 5 passed which sayfornia Companies California companies have it treat people as employers rather than contract it is in the normal course of business except he shares are higher on news that the california governor may e still in negotiation with lyft or uber to talk about some exemptions from the law. Not exemptions i wanted to look who would be hit harder. Uber lyft i should say has been increasing presence not in San Francisco with 20 concentration but overall within the u. S. You can see lyft has expanded two t share to 40 in just years from 22 . That due to the deliberate expansion overseas. Like a harder hit but news is still developing. The European Central bank is iteduled it meet tomorrow so is a good time to see what the market is expecting. Quantitative easing about 30 billion euros a month but it expecting another cut in the deposit rate and the consensus 10 basis point cut panly because that is what the inly because into what e. C. B. D once it got into negative territory. For that to negative 50 but you can get a sense through traders are expecting by looking at Interest Rate swaps euro overnight index average and they are looking for a 15 basis point cut. If the consensus is right and are wrong t signals and we get a 10 basis point cut istory would suggest we would see a euro rally after that. Great stuff. You. Stay with us. Andave the e. C. B. Coming up fed. What are you looking for ought of the Central Banks . The thing about the feds a few weeks ago they have to go really hard and with e. C. B. Is what technical thing can they do beyond what they have already done. For the he role here central bank . I think they are both in different situations. E. They are clearly going to try to overstimulate the market. I think the problem is it is on a string. When credit is so cheap and no take credit theres fundamental problem with the structure of their economy. E. C. B. Has to work through that. Challenge ignificant that is multigenerational. That wont change overnight with stimulus. N the u. S. The governors talking about how they will continue to be there so that the it will can continue be 25 basis points, they will talk about how they will make it work and be there in case it is needed. Group doesnt feel it is needed. Have interesting tweets about why it doesnt work. Fundamental problem. If you are Running Company and 2. 5 if you cant. 5 there is oeu something wrong with your company. It is the structure and tariffs. Ty from the we are just 25 points away on alltime 00 from the high and how close to those levels. Priced in with the Federal Reserve . According to our model we 25 basis cutshree not all at once. He band marked seems to still be toying with four so there is a discrepancy between the equity market and bond market according to our model. Expecting estors are fed to have their back. I think we are starting to look forward to the end of the balance sleet compression we have been sheet compression. That is part of the equity well. Discussion as what weve praised in i can say we quity market suggests will have lower rates for a beaverperiod of time and weve seen that rotation that we have started to eliminate the and a half but the utilities, real estate, consumer outperforming to the degree they have beaver would s low Interest Rates. If the fed sk disappoints that we see the market rotation viciously. What about we have seen with we have ar and fact seen so much this time of year. Your view on buying,some questions making hay . I think it is intelligent if you are a c. E. O. Or c. F. O. You at cheap levels because the premium is incredib tight. Bly it is natural for companies to bottom. N at the last cycle they did in 2016 from perspective. We are only talking about 25 basis points were we had the and ar to go to 150 everybody was like my god and then 175. It is still relatively small but they feel big. You mentioned the tariffs and back to something hat david woo said be straightforward. If you are going it cut a deal dont overthink it. They will resolve it. O you think it could be that simple and theres a risk of overthinking it . There will be a deal but i dont think it will have much teeth. Everybody will say what a great deal and i think that people skeptically. It will ease some tension. Equities s a bias to because of low Interest Rates. Any sort of good news is too good and people are running from the market. Overshoot. Absolutely. Thank you both. We have breaking news. Oracle which was supposed to announce results announced them analysts timates when were liking 9. 29 billion. At the same time its operating was 42 versus 41 . E. P. S. 81 cents matching average analyst estimate and board back sing buy authorization by 15 billion. Buyaps taking management to back shares. It is down 2 . The closing bell. General e looking at motors aging closer to a strike. In the short of how u. S. Socks closed but the closing above 3,000 p heads back toward alltime highs. Will we continue to drive higher . Timing the fed President Trump to s for rates to be cut zero or less. The ls lowestrate a policy makers on the same page . By a global economist at citi. Respond to the president. Into an we are heading e. C. B. Phrgt where they are xpected to go deeper negative and bank of japan they are negative o go intoto territory. Does it make sense for the fed in that ove deeper direction . Fed is looking at three things. Environment continues and continuing to erode among businesses and there is a lot of anxiety and then inflation continues to be tepid. Putting those together they a recipe where the fed can feel comfortable lowering them. Just 25 basis points all or is there a case as many say if new that ressivelyvely salves you cuts on saves you end. On the back we agree in terms of whf it pointsok like 25 behaves but we think that will be enough but there is a scenario where fed goes more. Hey have another 75 priced in about 25 the rest of it year and another 50 next year. That would be the case if we continue to see a ramping up in between the actionaction u. S. And china that for the g. D. P. Growth. It is interesting if we talk bout the fed goes harder faster. What do you think the e. C. B. Has making terms of anything work . More bond buying . Does it get were bang for the buck . A lot of a view that the official acome tkaegs accommodation wont go to adding consumption but prices. Late asset nonetheless markets are looking for action and businesses are action. For if that is all that is going appen i dont understand i guess i understand why they danont it but i understand why we are in the seeing more coordination on the policy side fiscal when it is clear that the Central Banks really dont have with. To worka lot to wo i getrk the sense back to the question to the only with e. C. B. They are almost admit they dont have enough a unition to deal with recession or pull an economy out so the idea of deploying now to avert that is the idea . I think the fed has tools to million the recession. Unusual is if the next recession is triggered by trade since the e not thate have nott 1920s so the fed has no xperience with this and what tools can they pull. That is why i think it has been fed officials saying we are going to do what we can butan you need fiscal policy and lightening up with trade policy. Some concerns that maybe the i. B. Will disappoint but ift f look at recent price action in europe it is great. Last five 8 the the days, d. A. X. 3 . Keep disappointing . Ey the market seems to like it more than anything else they have beenlse they have doing. Ittbeen still is our anticip the e. C. B. Will apply additional stimulus tomorrow. As you mentioned they will rate ly lower the depositosit another 10. We will have q e2 around 36es 0 euros. N youre qe2 thatwas a delay in would seem hawkish when they are rying to portray additional pol accommodation. From anks to dana citigroup. P. Citigroup. This is regarding oracle c. E. O. Taking a leave of absence. He put out a statement saying he decided he needs to spends time focused on my health. Exactly what ifycify issues he was dealing w. He said larry, and u know weve worked together and he has great confidence the company will continue to execute as planned. Execute as planned. Mark hurd is expected to take leave of ence absence for health reasons. Day announced he was a before anticipated. Coc. E. O. Has been almost to how much ve years ago of a business disruption will this be . Not so much. Running in a while. Been the hrlast seven moveers it was how soon to data bass customers to the cloud. They have been slow compared but application business has done all right. Todays results were generally lane. At first the first glance i havent seen major surprises. Dont expect much disruption. We should point out they did close First Quarter earnings numbers a day early and did beat slightly the top line including on cloud business. Hen you talk about the challenges they are going to save fra will deal with herself that mark is out. Is she going to have to do . Is it just everything they have so far . Ng i think they will have to figure out how to accelerate the base Customer Base shift to the cloud. The stock is less in terms of discount from a most of the Large Software names and number one factor is they large data base business and that is mostly on needs to be moved to the crowd to gain additional services. Om other that is an area they need more resources feel migration happening just slowly or are they afraid when ing some customers they dece to go to the cloud to go to other vendors . That is the biggest risk. Office base is unlike 365 it is deep entrenched roduct and not easy to move them to the crowd. Happens oracle hops they will move it to their cloud product. To the company. It is not something every day chief executive or oc. E. O. Takes a leave of absence. When there is little detail how frustrating is it without some definite time line or is why it dn 4 or you have to respect of the executive . You have to expect the Conference Call will be in a couple of horse perhaps. Nd out more on the privacy issue we have seen this before with other issues. Es with health steve jobs is probably one of ore famous cases of that where a lot of investors were in the dark. Traded in a publicly company you buy into the learn and it is mark hurd and save ra and it will be one of those people. What is the obligation they have to investors . Oracle has as been about larry. Oracle, as great as mark is in terms of executing, larrys and i s think that is where investors focused. E what will you be listening on the call . What the phrbgs business has and if the macro slowdown has impact on backings. We have seen some Software Vendors report that. Those would be two apart from the details about marks departure. Thank you very much. The latest business flash led lanes. Could be the headlines. Uber has generated billions as out to treat them employees. Understood a bill by the they would enate reclassified. That would make them eligible wage, overtime and workers compensation. The lower house will take it up next. Hong Kong Stock Exchange made a billion offer for the london. It can be seen as a potential china. R from u. K. Business secretary tells bloomberg the government will at anything that has security implications. Billion year pro basketball baghdad but some say they would not tack part in investment vehicle. The Milwaukee Bucks coowner says he loves the idea. Whether his team tax part would depend on the price. Wool we will be talking trying to save the struggling i. P. O. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. That could allow hackers devices into your home. Ys and like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. We come here with the knowledge we cannot erase the or reverse the evil of la ay but away offer you all that we have, our unwavering loyalty, devotion, and our eternal pledge that your loved will never, ever be forgotten. At the World Trade Center to y members gathered it read the names of those killed he doesnt am says expect President Trumps approach to Foreign Policy to the ically change with departure of john bolton. Graham says the president has a Foreign Policy team around him. We have our honored guest from afghanistan and we will ind out what is going on in afghanistan. [inaudible] they are not there yet. I dont mind talking to them. Iran as bypass door to the argue al atom niic enrich as were energy as they need. He ambassador made the remarks on the sidelines of the board of havenvienna. Eting in with cooperation and accept undue pressure on the agency in this regard will receive iran. Riate action for global news 24 hours a day on twitter powered by more than 2,700 journalists and 120 countries. R this is bloomberg. There is a growing risk of a at General Motors. To n leaders are flying detroit to debate the lates attempt of a contract and they have to decide whether to submit vote or go on strike. Lets welcome a professor of at the lations university of california at berkeley. Information at Information Technology with labor and tkpwhr globalization. Why is the risk of a strike so high . What are the conditions that may be setting it up . A critical set of negotiations. It is defining for the company. To compete in an industry that is going through a electrics ion with and autonomous vehicles. Union they want to see that but they want to ensure members job security and they share in those gainsment so their are higher wages and road changes in various classifications of workers. There are many temporary workers those hired since 2007 that earn far less. Apart we far negotiations started. It is in the end game and how u. S. Manufacturing competes economy. Obal i come from the u. K. Where quite common and British Airways are busy at it. How monumental is it to see it it he United States and see spre spread . This is something that has rare in the singly United States. We he last several years have had an uptick in strikes was say eyond what it the 1970s and 1980s. N the Auto Industry the last major strike at General Motors as in 1998 and that turned out to be very disruptive. So, these things are rare but pivotal. Ues are you have a lot of works who gave when g. M. Wentns bankrupt and the industry decade or ollapsed a so ago. They have regained some but they want to regain more and they ant to have a sense they are stakeholders rather than the tims of a more competitive g. M. I understand wanting more of what they have gotten the last couple of years but at aboutme time theres talk job security, talk about keeping a lot c plants open when of the sort of benefits i guess tphrblt gotten has been one in down plants like lords town and walk away. If they dont have the a xibility does it get to stage with profitability that is risk. That is a risk and the flexibility is critical. Something else is going on. Not just flexibility or a t. Is slow selling models major outsourcing. Seller ains the largest of lay vehicles in the u. S. And come to the Third Largest employer when for it was largest. At the same time it has become late rgest, porter of vehicles, pickup trucks, s. U. V. S, from mexico to the and canada. S i think that it is that which has week, deeply disturbed. It isnt a question of a transforming industry. It is a question of ought at the workers earning 2 it 3 in less than the United States. If you look historically between kicks is what the connection is between incidence of strike and tight market. The last brief strike 2007 it the bottom fell 1998 n 19eu89d 9 and now it is 3. 7 . We these things you see week, feel that the job market s not that terrible out there and they. That the Economic Conditions testimohem some leverage and Bargaining Power . It is actually true. Conditions of a tight labor market and economy master i along moving along give workers confidence. Desire on both sides to avoid a strike. For General Motors it would be disruptive. Unclear if the sales with be regained. U. A. W. And members it is costly and they want to see job and a successful company. So both sides want to avoid a trike but it is clear the possibility of a strike is much past reecein the arrest past and it is the saying they are prepared could provoke a settlement before sides want to avoid that. Thank you for your expertise. I. P. O. s. K about ome are coming even if we discu discuss. We have a provider of research. [inaudible]. Set the expect for us. Even though we worry about it is high i. P. O. s there are plenty along. Rs coming we have seen some good signs. E have seen some i. P. O. s bolster price range and some of hem are indicating they were higher. O after quiet summer and problems the market is coming a busy it could be september. When you look at sort of i drama going on action we it with have soon in uber, lyft and and ve seen in uber, lyft some of the most watched i. Pfppi. P. O. what is aying more oing on here in the second d secondary market or how they are being valued in the private market . Theres definitely a disconne disconnect. We companies is the poster excessive private evaluation and sensibility of investor. C market that has to be rec saoeultd and t is reconciled and that is dramatic. But weve been seeing it with we work. Pinterest was a down round and here have been many down rounds. Even cloud the i. P. O. That will night and tomorrow has interest in this range its was right at the last round. So the believe markets have been reconciling the hi valuations. I will highlight the ones that are extremely difficult are the losing companies because we may say they are mature compani work is 10 years old and uber and lyft have been around a while. They are immature companies from the standpoint that from a Public Market perspective they earn money. Theres a lack of maturity of a money. Y that do not were you could argue that is what i. P. O. Market looks like. Some do well, some are punished. Ok. E do it was very different than the wave of the late 1990s where did great. Exactly. This is a very good i. P. O. Market. It is climbing the wall of worry and it is distinguishing between risk ones and there discovery. Rice i think it is positive ins have fors have pushed back on the high valuationless s having been burnt by uber and lyft. Ut you look at the overall market there are many i. P. O. s that have been working. For every uber and lyft that is a disappointment we have had more gains from gains terest. N trade weapon. Zambia video. We hey have helped and managed an e. T. F. That tracks an the index year t date is up over 30 so the returns have been srelgvery goo downers ncluding other of i. P. O. s. Perform well dont it puts more discipline in the work. T and helps make it platoon what that investors are looking at bottom line and some i. P. O. s that perform well and like application oftware business where they generate profit and zoom video was mentioned, done very well. What we are seeing in included strike, they have done well. It signals investors are not at growth but some sort of profitability prospect. We are looking for that. Thanks thanks. From new york, this is bloomberg. Lets look at timely topics through the charts. Looking at are momentum. Of otation with me oppenheimer and topic we are about it you almost wonder overplayed momentum versus value. You have a great chart and you from different take others. Week. Is rotation what we have here is the dow high momentum index and dow jones low momentum index. Has had a tough week momentum but in slaught absolute terms what it is more this big surge in low momentum stocks that havent participated. Think there is bullish. His is what you want to see if internal breadth will work. Low momentum 2016. Rforms, 2003, 2009, usually big market turning points to the up side. Type of this is the action you want to see if the market is going to sustain that break out. That is a very compelling case. You would be buying high low momentum because low is finally catching up and suggest the market go higher, right . I think you dont want to for low momentum that is sure. In general you want to find a little bit of a common ground. Buying cyclical lie momentum is ur high momentum is our preference. Another signal for the buying action we have a chart showing you are saying Market Conditions are sickly icalicall 2009. E way back it i think the market is set up to this position to the up side as well. The s p 500 50 week rate of change. Only up 2 r it is morals oscillating around the throughout 2019. After such a period of little progress we think forward returns will be better. The reset larity to in 2016, the reset in 2011. 2019 has been the base building. Think we are ready to go higher. From a pure technical standpoint does it concern you lower highs in change and rate of for eag could it go more to the down side . Cycle and had equity same Economic Cycle since 2009ment i think that is lose momentum e the Economic Cycles mature. I think the inversion in the yield curve you get one final until you get peak economy. So you were talking about cyclical you like which ct doctors semiconductors. They have been trading on off with those trade headlines but they are stepping higher and making higher lows. Are the stocks above resistance from 2018 a year long breakout. Extend that back, hat goes back to the semis year 2000 peek this is an break out we see the 200 day moving average. Them. Nk you want to own that is a powerful breakout to 2000. You ve your bullish when are saying your clients want to look for reasons to sell. Coming up investing in the canvass. Shares of the cpany are up over 30 this year and joining s with a preview of whether to expect and talk more broadly about the industry is kevin shin grover Group Management c. E. O. Byis an doorsed endorsed the National Minority council. I think you have the wrong kevin. Kevin mcneil. He is supposed to appear a little later, i believe. Lets get to a business fl h flash. Right person. The lets get you up with the head lanes. One has taken a new shot at the it must address what it calls destructive strategy. He wrote it is too early to etermine if the chairman is making the right changes. E said the bank is far from competitive. Games they will have a sports event. Serve as a nt could road map for inclusion. Has generated billions without having to treat employees. Of those independent contractors would be reclassified it make technical for minimum wage and workers compensation. Lower house will take it up. Hey are expected to above the rate the maker of it hopes to 1. 5 billion to make largest this year. I. P. O. L be watching these as that are expected to come. Meanwhile, the california uber sification of employees that is going to be uge because there are so Many Companies hinged on this Business Model and it is not impacthat it is going to uber or they are going to reclassify any of their employees. Nonetheless it adds to everything you see out there. More tors getting scrutiny, laws being passed. So many Business Models that threat. Under you saw that in the i. P. O. Filings. Was coming. Is at least the effort. It will be interesting to see if off. Can depends it you wonder if it becomes too much. Something the they continue it look into investment parameters but the u. K. Look into is going to and u. S. It is interesting it will ontinue it get breaking news lyft as wellbeing sued for things. Have the e. C. B. Announce being the rate decision. I will watch Economic Data cpi at 8 30 s eastern. Dont miss and tune into of the and analysis third democratic president ial debate live tomorrow. Bloomberg technology is next in the u. S. Have great evening. This is bloomberg. Emily im taylor riggs and San Francisco. This is bloomberg technology. Titans of tech. Oracle ceo takes leave. He announces he will take a leave of absence for health reasons. Revenue comes up short. We will have details. Plus, the cisco bread. I made u. S. China trade tensions with john chambers, former ceo of cisco. And linking up