Your top holder of u. S. Treasuries. Julyse holdings fell in 2. 2 billion. Certain that it is something that will come up in the fomc meeting tomorrow. What they think the u. S. China trade war means in terms of policy as well. Caroline lets dive deeper on the action. Abigail lets continue the conversation on energy that you all were just having and brent oil into the picture. Higher on theke attack on the saudi oil facility. What goes up must come down. Today, down about 7 . Huge whip saws. Come onthat supply has faster than expected. When we put this into the context of a longerterm chart, much ado about nothing. The with the exception of huge move down in 2016 and the big one up in 2018, between 40 and 60. Now right back down into that range suggesting that if there is a huge disruption for oil, we may have it continue on in this range. Sarah i wanted to take a broad look at the market where we stand. One way to do that is an etf that tracks these ipos, the ticker ipo. Performance has been dismal. Up may 1 relative to the broader market, which is up about 6 . This is as all attention is on wework on a discounted cash flow basis. They are saying eight billion dollars to 10 billion, nowhere near the 47 billion valuation. Companies like uber and slack off from their ipo. A lot of attention on the ipo market, the health of that market, and what that means for the sector going forward. Renita gold is extending gains from yesterday. A little bit of fear in the mix coming after that strike on saudi arabia and oil. This is a better reserve story. They are positioning for the key Rate Decision tomorrow and widely expected to cut basis points. The press conference will be around 2 00 p. M. Eastern stamford eastern standard time. We just got fedex results coming out. First quarter revenue pretty much bang in line with what analysts had estimated. Just a hair below what they were looking for. First quarter operating margins, 6. 1 versus 7 year on year. Disappointing drop in margin. First quarter adjusted, analysts ,ere looking for a dime more 3. 15. The stock moving lower in after hours trade. Joe still with us, ellen young, and luke kawa. We were talking a little bit earlier about fed plumbing but in terms of the Rate Decision and what powells role is, what is sort of everyone expects a cut of 25 basis points but in terms of language beyond that, what do investors need to hear to be comfortable buying stocks . The fed fund futures odds of a cut tomorrow are about down to two of three. I think there is some recognition more so among the Investment Community that there are reasons to not assume the fed will just cut its way to oblivion. I think tomorrow most people do still expect a quarterpoint cut. If needed, the fed is a backstop, insurance policy. Clearly, i think there is a little less urgency than a couple of months ago. We are seeing very good resilience among u. S. Consumers. Inre is concern obviously trade, manufacturing, so does that hit at the consumer . These are the Big Questions that chairman powell will be getting tomorrow. 7 . Fedex down over they cut the fullyear earnings forecast. They said it is weakened by the macro environment. Put the market has already , what isnufacturing Holding Things up is really more domestic, consumer. They will Start Talking more about the broad market. Caroline adobe Third Quarter adjusted earnings per sale per share beating estimates. They continued to outperform, revenue 2. 8 billion, in line overall. Adobe up after hours. Fed x being slammed after hours after its adjusted earningspershare mix. How much are investors talking about the intricate details of individual stocks and wondering about specific names such as fedex . The fact that everyone is pouring into software, or are they talking about the fundamentals in the economy . Luke i think it is still more of a topdown nor macro market. I think people are still kind of preoccupied with, we just had a huge factor shock in the last couple of weeks. To the extent that continues to play out, what is fueling it. The fact that you have seen a lot of this center around yields and longterm yields acting as a Circuit Breaker to this, doesnt seem like they want to get too far above on the 10 year. The promisor the expectation. Scarlet i am glad you mentioned bonds and rates. We are talking about how yields are back down again. Have we seen the worst or the end of that selloff alec everyone is geared for these crazy moves because we have seen so much. I think the most likely is we have seen the lows in yields, we will have a tough time getting through two and we will bounce around. 1. 45 is hard to sustain given what we know now. By the same token, now that we have had a snapback, it is hard to imagine that rates take off on the upside, especially with what is going on with fedex, the Global Economy. The fed is embarking on rate cuts. I think range bound. Joe what is the most plausible catalyst for a rebound in the Global Economy . Luke that it has been poor for so long. Effects, the idea that china will continue that had chinese data will increase the odds of chinese stimulus. I think you can point to a lot of reasons. How much are you looking abroad as well as the moment . Spain announcing new elections. Italy setting up a new political party. The minute you think you have some calm, we rear our ugly head. Is it very much that the u. S. Is your haven . Investor, u. S. Based that is a big part of the story. There are wildcards internationally. But theg has calm down brexit risk could create kneejerk volatility. A lot of the impulses coming from overseas are positive, like very aggressive monetary easing doj, as wellto the as a lot of indicators starting to slowly beat some very low x patients. I think investors may be hopeful that the global index, while not great, may be stabilizing a little bit. Young and luke, thank you very much. We have some earnings news from chewy, the pet retailer. It had a wider loss in the Second Quarter than the preceding quarter. Bitebita loss was a little narrower than anticipated. Net sales pretty much in line with what analysts were looking for. Of full year, a range 4. 75 to 4. 8 billion for the full year, off in after hours trading. That does it for the closing bell and for me. Romaine bostick will be speaking in next for whatd you miss . This is bloomberg. Bloombergsve from World Headquarters in new york, im caroline hyde. Heres a snapshot of how we were muted on the Main Industries the main indices. Taking action. The fed moves to alleviate stress in the money market. Does a spike in funding rates show that the fed is losing control of shortterm spending . Saudi aramco looks to get back to preattack levels by the end of this month. Oil gives back half of yesterdays search. As it seekss ipo more time to ease investor concerns. Bonds drop for the most on record. Romaine quick check on some breaking news. A slew of earning results coming down the pipe. Adobe estimates coming in a little bit lighter than expected. Retailer, online pet the Second Quarter they have reported earnings since going public. Cutting fullyear outlook for the current fiscal year, taking it down to a range of 11 to 13 per share. Analysts estimates on average were 14. 73. The lowest estimate out there was for 14. That was after a lot of analysts came down. Caroline lets turn to the money market. Bought york fed Fund Securities on tuesday. It seems they will be doing it for a second straight day, wednesday from 8 15 until 8 30. Conduct a repo operation for a second straight day. It is perfect. Joe for more, lets welcome Bloomberg Opinion columnist Brian Chappatta and Tracy Alloway. Market, i, the money always think it brings out smart people and then total cranks where everything is this everything is a sign that the world is ending . Tracy is it a copout if i say it is a combination . People get excited or concerned, you talk about a big spike in the overnight repo rate , we had all this Financial Market stress that culminated in Lehman Brothers and the Financial Market some structural issues have caused tightness in the repo market. It says something negative about the Federal Reserves ability to control shortterm money market lending rates. If you think about the Federal Reserve losing control of monetary policy, that is concerning. Romaine i think we need to clip her saying, this time is different. Why didnt the fed see this coming . The treasuries was just dumping treasuries right and left. We knew that this was coming. At some point, liquidity crunch was coming. Fedn i feel like the thought they would know when we hit a liquidity crunch when they saw it. Tomorrow, that is the time that people tend to need funding. It was interesting to see that technical difficulties today earlier in the day, then they did a 10 00 a. M. Operation. They were going up to 75 billion. I think tomorrow, we are likely to hit that in the repo operation. At that time of the day, it was already too late. Caroline tomorrow, will they start to talk about the potential of this overnight repo this so we steady dont have to have these oneoff actions . Tracy there are a few tools at the Federal Reserves disposal. Shortterm liquidity injection. There are other things including a standing repo facility, and that is something people have been talking about for a while. The consensus among Market Participants is that the fed isnt quite there yet. E couldn the ioer rat also help. The big one that everyone is talking about is the potential for the fed to start slightly expanding its Balance Sheet yet again. It could buy u. S. Treasuries and that would create excess reserve in the system and hopefully alleviate some of the tightness in money markets. Caroline how do they explain that to the market . Joe we were just listening to president trump. He wanted us to expand the Balance Sheet. They have this open market operation today, another tomorrow. Is it a problem . They can press a few buttons assuming all the computers work. They press a few buttons and the market goes back to normal. The fact that they have the power to make everything chill out. Brian it is a little bit surprising they didnt step in yesterday or early this morning. This is out of control. You freak markets out more by doing nothing than stopping in and doing this operation for the first time in more than a decade. From thes the reversal tightening of reserves they have been doing over the past several years. At this point, it is what the markets are telling them to do. Romaine tracy, what do you make of this theory that this kind of exposes what some have felt, that the banks and financial entities are not as well covered as we thought they were. Tracy there is a huge irony to what is happening. After the financial crisis, the Federal Reserve tried to make the Retail Market safer by introducing liquidity requirements. In doing so, it seems they have made the Retail Market more brittle in some ways. We have seen i think at least three big spikes in the repo rate. There was this 1, 1 in april, and one in december as well. In making the system safer, the Federal Reserve seems to have scored an own goal in terms of making it more volatile. That is the question that Market Participants will have to start asking themselves, whether or not that unsettles the wider market . Andline Tracy AllowayBrian Chappatta, great to have you both. Oil thea slide in damaged oil plants. This is bloomberg. At what time for a look stories are trending across the bloomberg universe. Deutsche bank ceo is considering whether to appoint a new Investment Banking head during his recent restructuring. He had assumed direct oversight after richies departure and thinks it may make sense to relinquish the extra responsibility and focus fully on his ceo role. A story on uber and lyft drivers who brought traffic on a busy new york roadway to a close, they protest over pay and working conditions. It is reported that the drivers were on their way to the mayors official residence to ask the drivers to do more. The government to do more. The castle from Downton Abbey will soon be upon airbnb for an exclusive stay. Two guests will get to stay at the castle. 186ooking only costs . 40, and opens at noon on october 1. The 300 room castle will open its doors on november 26. You can follow the stories at bloomberg. Com and at tictoc on twitter. Caroline turning to oil. The Saudi Arabian plant has restarted and is processing about 2 Million Barrels per day, restoring about half of what was lost. The kingdom expects it may take until november to restore saudi arabias full production capacity. The Saudi Energy Minister at a press conference today. Joining us today for more is gina davis. A lot of dubious nest because some of it is about processing, some of it is about absolute capacity. What did we learn today in terms of how much oil they are making and how much they can put back online . The message was one of attempted reassurance. The goal was to get across the market that, yes, we have suffered, there is some damage, but we will deliver what was promised to you. That is one of the things we took away from the press conference this afternoon, that we will still deliver the full contracted amount this month. We may not get it from the fields or processing facility upected, what we will do is offshore fields, get it from some stock oils on hand. Oil moved a little bit in one direction or another but basically ended where it began. Again, that is a testament to the fact that the market was not too freaked out. There still are larger risks. Romaine there was a lot of talk about how to get online. Did they address the risks that this could happen again. Whatever conflict led to this has not been tina resolved. Tina been resolved. Tina the minister had an opportunity to blame someone for the attacks and he declined to comment. Was think iranian equipment used but they have not gone as far as the u. S. Government has said. The u. S. Government has been very plain in fingering iran for this. Joe obviously, the Strategic Petroleum reserve is something we may tap at some point, but there are infrastructure issues with that. There may be bottlenecks, pipes that have not been used in a while. Tina these are not new facilities. Louisiana existed in and texas for a long time. We have been draining down the amount weecause the have had to have on hand as been less and less. You have seen congress authorized sales from the Strategic Petroleum reserve. It is an indication of u. S. Production value. Joe thank you very much, bloombergs tina davis. Coming up, we speak to the ceo of barrick gold, mark bristow. This is bloomberg. Mark i am Mark Crumpton with bloombergs forced word news. Former Trump Campaign bloombergs first word news. Former Trump Campaign manager Corey Lewandowski says democrats have been doing petty politics. He testified at what the committee has called the first impeachment hearing. Lewandowski says investigations of trump have been, in his words, populated by many trump haters who had their own agenda. Since election day, whether it was bad actors at the fbi or intelligence immunity, or lies from the majority, the American People continue to be sold a false narrative with the purpose of undermining the legitimacy of the 2016 election results. Performanceowskis won immediate praise from donald trump, who tweeted, such a beautiful performance. Thank you, corey. Israels election headed for a deadlock with Benjamin Netanyahu able to easily form a government. They are running neck and neck. Netanyahu is seeking a fourth consecutive term in office and fifth overall. He faces a stiff challenge from gantz, whose blue and white party is running even with netanyahus likud. Leader Nicola Sturgeon was presented with an award at a ceremony in potsdam. Sturgeon says the eu is ending is entering Uncharted Waters at a time of political crisis. It is no exaggeration at all to say that we are living in unprecedented times in the united kingdom, both literally and constitutionally both politically and constitutionally. Mark sturgeon added that scotland was committed to the European Union and hoped in the future that her country would rejoin the eu as an independent state. Investigators say it is still an openended question about how sushi how much in kyi could be implicated the crackdown against the ethic minority that began in 2017 and ultimately drove hundreds of thousands of rohingya from their home in myanmar. Another member of the factfinding team spoke to reporters. The civilian side of the government has substantial constitutional responsibilities. We reported now, this year but that there is no significant change in the human rights situation in myanmar in the positive for the last 12 months, and there are a number of changes to the negative. Says itsmars envoy country rejects any move to make to bring Human Rights Violations to an International Legal forum. 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. Caroline lets talk about governor of the bank of england mark carney and how he could potentially be asked to extend his term further than the six years he has served due to brexit delay. This is all being reported by the financial times. He is sent to step down next year but no successor has been announced. Numbers of those already serving in some way, andrew bailey, the head of the financial conduct authority, the deputy governor, also the reserve bank of india governor. As of yet, we dont know any successor. Like hotel is california. He might get stuck there for a while. Caroline there are quite a few politicians who move in and out. Romaine lets also check on some earnings news crossing the wire. Results out a little bit earlier. It looks like they beat on several of their main metrics. Shares down about 4. 5 . It looks like the street was looking little bit that are on the guidance. Adobe gave Fourth Quarter forecast for both revenue and eps. Then you have fedex, totally different story. Shares down about 9 . They gave a full year outlook. The average of estimates was coming in much higher. Results as far as the range actually comes in below even the lowest of analyst estimates. A lot of those analysts have lowered forecasts. The company again blaming what they say is a weakening global macro environment driven by increased trade tensions and policy uncertainty. Caroline we will keep a close eye on those afterhours moves. This week, Bloomberg News is dissipating and covering climate now, and microsoft cofounder bill gates has invested billions into clean energy and tackling Climate Change. That hest strategy is wants to help those hit hardest by Climate Change to adapt to it. Have are not going to year where the world is cooler than it is today. The average global temperature is going to go up a lot. In the next 50 years, it wont go down. Deciding how much it goes up, does it go up by two degrees, three degrees, four degrees, that is in our hands. If we ignore the problem, you are going to head to Something Like a four degree scenario which in terms of natural ecosystems, forest fires, days that humans just cant go outside if you live near the equator, it is pretty extreme. Knowing how seriously people are going to take it and what types of innovations will come along will determine where in that 24 degree range we are by the end of the century. I certainly hope we dont run the experiment of being higher than two degrees. But it will take a lot of commitment and a bit of luck on the innovative breakthroughs to be able to get there. There are a number of different ways of fighting Climate Change. Renewable energy is clearly one of them. Do you think governments should subsidize Renewable Energy or should be dictated by Market Forces alone . Solarthe cost of wind and has come down dramatically. That has helped drive that volume. Now, they are not going to come down much more. The tax benefits should be shifted into things that are more limiting like energy storage, offshore wind, which ,till has a huge premium price lots of places that we need the market to get going. The progress on solar and wind is very helpful, but the sun doesnt shine 24 hours a day. If youre far away from the equator, in the winter, you cant get as much. And that is just for the electricity piece, only 25 of emissions. We need a lot of efforts. That accelerated rollout, that is one of the few advances we had. It is less than 10 of all energy generation. The Global Economy has a lot of energy generation. It is one of the good things that has been developed. Romaine that was microsoft cofounder bill gates speaking to bloomberg at the bill and Melinda GatesFoundation Headquarters in seattle. Some breaking news here. Double line ceo speaking out on one of his periodic webcast. Butty wideranging webcast he does talk about the chances for a trade deal. In his mind, he says there is almost zero chance of a trade deal. He is also pontificating about the state of the economy and questions why anyone would want to own negative yielding debt. Joe coming up, fedex tumbling after reporting its firstquarter earnings. Why the company is cutting its 2020 profit forecast. This is bloomberg. Caroline shares of fedex falling in after hours trading, citing worsening trade tensions and a weekend Global Economy. 11 to 13 cut here, in the fiscal year ending may. Thomas it comes right after they reported their yearly earnings in june and had brought down Expectations Quite a bit at that time. They are bringing them down a big chunk again so things are not going so well for fedex right now. Is this strictly about the weakening economy or do you see other things that could be fedex specific, so the operational, domestic competition that cant just be chalked up to the macro picture . Thomas there are other things. Definitely, the macro picture is weighing on them. They bought a company in 2016 and are still having trouble integrating that. They underwent a big cyberattack. They are still throwing a lot of money and trying to integrate that into their system. On the home front, they are trying to reengineer their domestic ground operation so they can be more efficient for the ecommerce delivery. As you know, the pullback from amazon. They are doing all kinds of changes that cost money at first but in the end should save money. Romaine why are we seeing such a difference in results and the forwardlooking guidance compared to what we have seen in previous quarters . Basic answer is that ups got started earlier. Fedex is a little bit late to the game. They are going through these pains right now of restructuring that and i think it is showing up in the numbers. Ups has kind of already gone through that. They are still in a big capex phase, spending a lot of money, but they are starting to show results already. Caroline the question of trying to rein in the costs and make things more efficient, but what about exposure to china and trade tensions . Are they looking to change their Business Model on the back of this or at the moment is it just weathering the storm . Thomas i think it is weathering the storm. They have been at this a long time, they are fairly efficient, but they do have ups and downs. When you dont have as much volume coming in as you want, you might have to reduce your footprint a little bit. They will work through that. I think the more interesting part of the story is if they are successful at this reengineering of their domestic operations that take full advantage of the ecommerce volume coming in. Romaine obviously, we have the Conference Call and want to get a little more sense as to whether the problems can be sort of a readthrough to some of the broader issues in the economy. Is there enough there to kind of have that thread going from todays Earnings Report to what is going on in the economy . Thomas there is something there, but we will hear more about it on the Conference Call. Ask me that question again when i hear fred smith talk about this. I think a lot of people are looking forward to this Conference Call to parse through what is really happening. Part of it is the Global Economy. We are starting to see some signs of Global Growth slowing down, certainly on the manufacturing side. We also have the other part, fedex, where they have to get their european operations doing much better. That is about integrating the tnt express. Romaine always appreciate getting your insight. We should point out, fedex shares now down almost 9 . A quick check of the latest business flash headlines. Toyota moving to boost output in. He u. S. The japanese automaker will invest 391 million at its texas truck factory. That san antonio plant will get a Technology Upgrade but no new jobs will be created. President trump says the u. S. Will reach a trade deal with japan soon but said nothing about his threat to impose tariffs on japanese cars. Sales of the countrys largest ecigarette brent juu salesrette brand juul have been halted in china on their first day of sales. And, colony capitals tom barrack is finished with real estate, saying his Los Angelesbased firm is selling all of almost all of its portfolio of hotels and other real estate. They are able to use the money mobilehase data centers, mobile data centers, and fiber. That is your business flash update. From new york, this is bloomberg. Bloomberg. Gold says it is well positioned to achieve targets toward the end of the year. Costs stand toward the lower end. For more on the outlook, we welcome the president and ceo, mark bristow, who joins us from the denver gold forum. When this deal closed earlier this year with randgold and barrick gold, you were at a conference i believe in cape town and you made it very clear that barrick was going to hunt for more profitable ounces rather than ounces at all costs. Can you give us a sense of how you have been able to push the company down that road since the deal has closed . Mark absolutely. At what we setk out to do, the fundamentals behind the combination was, get withest people, combine it the best assets. Now, nine months, weve got everything in place, our share with the market today, we have ticked all the boxes will set ourselves to achieve by now. Delivertime today to another list to deliver against in the next 12 months. We have six tier one assets, so the biggest concentration in the industry. So there is the best assets. We have dealt with a lot of are liabilities that we inherited and we have the Solid Foundation of the nevada goldmining joint venture along nevada, inld corp in america, and a big growth project out of dominican republic. We have made progress with the liabilities in south america and started to look to the opportunities. Africa has performed extremely well, as we expected it to. Strong Cash Generator within the portfolio. We are selling in australia. Now far down the road in creating a tier one asset. Joe thanks to the impressive run that barrick has had lately and the share price, what do you do with that increase in cash . What opportunity does the gold rally now afford you . Mark i think it is important to touch on that rally. The thing that we should point sharethat the barrick since our transaction has outperformed both the gdx index and the gold price. We are on our way to achieving what we want to achieve, and that is to be the most valued Mining Company in general in our industry. What do we do with the money that we make. And you set a plan, plan on a certain price and you get to the end of the first phase of that plan and the gold price is higher, we should be able to share some of that enhanced Value Creation with our shareholders, and we intend to do that. Buybacks,share dividends, what about more m a . I know you are making disposals but other areas are selling off assets. Is it time to be splashing the cash . Mark i think that we dont splash cash. We have never done that. Of realres up a sort deal business formula. About creating value. So, where there are opportunities to add to our portfolio of tier one assets, we will take them if we can demonstrate both to ourselves and our owners that there is an opportunity to create more value. Of focus on cleaning up some our portfolio is to allow for us ourontinue to manage higherquality assets and add to that portfolio of quality assets. When we talk about unlocking value, i dont know how familiar you are this group. I know it is targeting more some of the Midsize Companies that already tier below where barrick is. When you look at investors about how some of these gold producers are not operating at the right level, the right cost structure, and have missed an opportunity here, how do you sort of address those investor concerns knowing that, lets face it, gold probably isnt going to stay where it is right now. Gold prices, i should say. Mark that is a point i have tried to get the market to understand last year. We are less than efficient in creating value from the minds. The managers and fund managers. Spent anen we have enormous amount of energy on different ways to make any. There is only one way to make real returns and deliver real value on a longterm basis for ones owners as a miner, and that is defined worldclass assets, develop them, and ensure you are at the bottom end of the thereby unlock value over the full cycle. Aspect that the group pointed to, our industry has too many managers managing too few assets. There is no trick in the you increase the amount of managers, you unlock value just in the form of and we would become more efficient. The market will look at her and backuld attract people into our industry as investors. Caroline mark bristow, president and ceo of randgold of barrick gold about why he doesnt splash cash. Our live coverage of the feds latest decisions, tomorrow, chairman powell had 2 00 p. M. Eastern joe numbers from the u. K. Out tomorrow. Romaine august numbers for u. S. Housing stocks out tomorrow. Riggs in sanaylor francisco. This is bloomberg technology. In the next hour, wework suspends its sales pitch to investors but will the delay help allay investor doubt . Apple tells the European Union court that it has been unfairly labeled a