Dealnews, kicking it off with one of the slew of deals, oracle and tiktok. The u. S. Government will undertake a security review of the potential partnership. Treasury secretary Steven Mnuchin said that earlier today and added the deal tiktok would create Tiktok Global and finalists. Joining us now, shelly banjo. Outre waiting for more news of oracle. It still needs approval from the u. S. And beijing. What are the odds this thing actually gets through . Shelley we are far from done. I would say we are just beginning to figure out what will happen. Now the ball is in the Trump Administrations court. Has a set ofktok microsoft, your proposal is not going to fly with us. Were going to go with oracle which provides much more control to keep a lot more control of the companies can previously discussed under a microsoft deal, which would have been outright sale. Trott has been pushing for an outright sale, and many members of the administration had been pushing for an outright sale for many weeks. This is not met. So, is the Trump Administration going to accept that . Guy are we going to get all the details we need by friday friday is the deadline, the 20th. We are waiting to see if we can get it done. At the moment, this looks unbelievably messy. Shelly it was very rare for Steve Mnuchin to come on and confirm they are looking through this and weighing through the proposals that it had received a proposal, you know, this has been the most publicly outright public deal and negotiations i have ever seen. He said were going to look through this, present something and september 20 does remain the deadline. What happens from there is also mark. Tion they can say we dont like this, try again, and we could start the whole process all over again. We know tiktok was in the process of suing the Trump Administration does that stop, what does all this mean . Shelly i think the biggest challenge with this story is that there is not one thing happening. There are a bunch of things happening all at the same time. Many tracks are happening simultaneously. You have what is going on in china. You have what is going on in the u. S. In one instance. You have tictoc, oracle, microsoft, investors. Stakeent parties have a and they are all happening simultaneously. The lawsuit will most likely continue to keep going the executive order still stands. There is another executive order with a deadline in november. All of these things happen in tandem. That is part of why the story has been so confusing to follow. Guy absolutely. Hopefully we get clarity surely as we already indicated. Oracle is currently suspended. Hopefully shelly will come back and give us some insight once we get the news and get more details. For now, to our very much. Lets carry on the conversation and look at this for me series of different angles. Join us with the chinese reaction, william writes. He served as an undersecretary of commerce during the clinton administration. Is it possible, william, to satisfy both beijing and washington with this transaction. It all seems to me to come down to the algorithm, the nuts and bolts of what makes tictoc work tiktok what makestiktok work. The chinese says you cannot have it in the u. S. Says we need to have it to make that for security work. Can you satisfy both parties . William i think it will be difficult for the reason you said. The way the u. S. Has defined the issue is a little bit different. For them, it is a question of access. Government 50 the medassets government can be assured the data is not going to fall into chinese hands, then i think there is a process that prospects this will go through. Had it been a straight sale, this would have been an easier task. It does not appear to be a straight sale. Until we get the details, we cannot know for sure. The question will be who controls the data, where is it going to be stored, where is it going to be kept, and is there any possibility the chinese will be able to access it . The question of the data on the chinese side they want to ok the deal for algorithms, you can argue that is what makes tiktok attractive. This china want this deal to go through . If they wanted to go through badly they would not have done what they did last week with respect to expanding export controls to cover the algorithm. They did not have to do that. That two ways. Et you can interpret them as muscle flexing they wanted to show the United States they are an element in this entire deal as well and they have cards to play, and that is an important one. You can also interpret this to say they are genuinely concerned about protecting the algorithm and acquiring the data. Im inclined to think at this point it is more the former than the latter, but we will have to see how it plays out. Guy i am really confused by this. What makes tiktok take is user data interacting with the algorithm. If one side is saying we want to control the algorithm and the other side is saying we want to control the data, and the venn diagram does not overlap, how does this work . William you need to talk to someone that is more of a technical experts and i am. From the u. S. Point of view, it would be great to acquire the algorithm because that would. Reate a profitable enterprise i think that is why microsoft was interested. From the u. S. Government standpoint, it is a little bit different. Positionuestion of the of the data if they could figure out a way to secure the data, i dont think who controls the algorithm is the most important thing for the u. S. Government. It might be the most important thing for oracle, and well have to see what the terms of the deal are. I do want to bring some breaking deals oracle has confirmed it is part of the tiktok proposal. I want to widen this out behind tok. Eyond oracle and tik what does it tell us about the tech cold war and companies questiono do business mark william it tells us it is accelerating. This u. S. Administration has a definition of National Security than pres administrations have had and the bilateral relationship has been deteriorating for a number of years preceding trump. A lot of it has to do with policies the Chinese Government is pursuing. It is not necessarily what the u. S. Government is doing. We are more concerned about National Security we have a broader definition of what that means, particularly when it comes to communications technology. Go back to the whole huawei episode, which is also a securityrelated episode. If you are in the ict sector, i think this is going to get worse and i think youre going to hear more conversation about decoupling in a range of areas and a range of companies. Specific,being more data appears to me to be increasingly the narrative, and the lack of access to u. S. Data by Chinese Companies seems to be becoming an increasingly large part of the security conversation. How gated do you think the twocom the infrastructure worlds are going to become . If data does not pass between are we dealing with the a completeinter, breakdown of what was once a global phenomena . William that is what a lot of us are afraid of and i think right now that is the most likely outcome. You have to throw in europe. Europe is proving to an aggressive regulator on privacy with respect to privacy rules. You are talking about splintering, not just into two parts, but into three, or perhaps more parts as governments seek to control their data. Moving in states is that direction. China has always been there. Europe has been moving in that direction, too. So, i think from a standpoint of global business, that is not good because it leads to fragmentation of the internet and further fragmentation of digital trade. Im sorry to say that seems to be the way we are going. Thank you so much. Again, to reiterate, oracle has confirmed they are part of b proposal. Ktok another merger nvidia. That is next. This is bloomberg. The u. S. Ambassador to china is retiring to hit the cap will trail. He is stepping down next month. Over the weekend, President Trump said he would be returning to campaign. Senator joni ernst is an Iowa Republican close reelection battle could help determine who controls the senate. The death toll has said 35 in western wildfires burning from california to washington state. Thousands of homes and other buildings have been destroyed. Tens of thousands of people have fled their homes. Firefighters could have another problem this week. Is due to low moisture and i went. Said to defend allegations it cheated on emission rules. The eta the epa and the Justice Department are set to announce the assessment judgment today. Settlement today. I am up to good cap. This is bloomberg. Ritika gupta. This is bloomberg. Deal ino the largest chip history, giving the u. S. Company control everything that controls data centers. Senior analyst. Needs approval from the u. K. , china, and the u. S. To go through. What are the odds and gets all of that approval . It is tricky to go through from a complexity standpoint. We have a chipmaker that is mine and intellectual property maker, distributor, the fact that many of its peers turned into competitors it creates a complicated environment for sure. It is great for nvidia to be very clear. They get a shot in the arm from an r d investment perspective, but the regulatory hurdles will be an interesting one, even without the u. S. China trade relationship. This is going to take it to a whole different level. Guy how is this going to change the landscape for chip design and chip manufacturers . Why would an alternative chip manufacturer want to buy licenses owned by nvidia . Nvidia says the intellectual property Business Model will stay as is. Going of that, nvidia is to be able to license its graphic processing capability, which is used in ai Building Blocks, through the distribution arm distribution model. On paper, arm customers have the option to continue business with ,he arm model as is additionally have the opportunity, if you make, to buy nvidia Building Blocks and have chipmakers. Other from a competitive perspective, obviously, nvidia is going to have access to the roadmap potentially early, and that is the concerning factor. If you step back and look at the alternative, really there is none. If you look at the chip landscape, the arm ecosystem is widely used in everything from smartphones to tablets to network processors, etc. So, in order to create a competitive, alternative platform, it is going to take a very long time, and arm has done that pretty well over the last few decades. Thank you very much indeed, anand srinivasan. Coming up, grocery demand remaining high people staying home and they are cooking there, but kroger is feeling profit pressure. We will speak to the ceo next. This is bloomberg. I am guy from london, johnson. Kailey leinz is in new york. Lets talk about groceries to the remain for groceries in maine strong. With people stuck at home, and restaurants operating at the minute capacity, kroger benefiting from the situation with sales rising in the last quarter. New pressure on profitability disappointed wall street. Joining us now is the kroger ceo rodney mcmullen. Nice to see you. Thanks for taking time to join us today. I am curious as to what you are seeing you are in touch with the consumer. We have seen a tough year. A lot of people forced to stay at home. I am wondering what you are seen as we prepare for the autumn, fall, and into winter. What are you anticipating . Case counts are climbing all around the world . All around the world. Rodney i am proud of our associates and what our customers are telling us is they are learning how to cook again and they are enjoying cooking as a family. All of those things are things that we think will be trends that will happen even when we get through covid, and with our associates there serving our customers, we think those things together will be really important, and when families he does a family, they stay as a family, and everything we can do to support that is good for us and good for the customer as well. Kailey what gives you the confidence that is going to continue, rodney . You give a forecast above expectations, but many peers have been reluctant to do that what gives you the confidence to issue not just a forecast, but a fairly strong one . Rodney it is two things we wanted to be as transparent as we could and let investors understand how we are seeing the next couple of quarters and the future, and also, in terms of 2021. So, we were just trying to be transparent and be as helpful as we could. And, obviously, when we look at behavior, customers are large,ing basketsize or huge increase in digital business, all of those things, and people are continuing to like to cook and bake, and our Research Tells Us they are actually enjoying it. You think, rodney why are you so certain this behavior will carry on postpandemic . Seems to be suggesting other sectors pentup demand, people want to go out, socialize why will he be at home making when the opportunity presents itself . Once there is a vaccine . Rodney from our perspective, talking to customers, people enjoy doing things is the insight and what everything suggests. Got does not mean they will not go out to restaurants marble we do not expect they will go out as frequent as they did before. If you look at markets where the covid incident incidence rates are lower, we still see similar behavior in terms of the amount of money people are spending in stores. Now, they will have smaller baskets and, more frequently when covid rates are lower, but still, the overall number is pretty similar to where low covid rates and high covid rates. Kailey lets talk about where they are getting the groceries you saw Digital Sales up 127 last quarter. That is remarkable, but how do you see yourself competing the Online Grocery space versus the likes of amazon or walmart, and what will that do for your margins . Rodney 4s, you look at your competitors, and you learn from them, and we are focused on what do our customers want and what do our customers need from us . Our customers tell us they love our fresh products. We do a really good job. If you look at digital, it is just another way of providing that. What we find, other than customers that are at risk, they still come into the store, they just do not come in as frequently and it is the combination of a seamless experience where customers can engage with us, they can do pickup or delivery, and we try to be that anywhere we can. The thing that is special about associates, be our their friendly service, and the freshness of products, and both of those, together along with using data to help customers stretch their budget it is that combination together that we offer and the reason why customers like coming to kroger. Guy are you going to ultimately, though, have going to have to figure out ways of providing less interaction between your people and your customers . It is interesting, there are reports, and it is prevalent here in europe people are not using cash anymore. They dont want to touch things. They dont want to interact with people during this phase. How do you marry those things up having great staff and consumerfacing people, and concern among your customers that they want to get the shop done, to excuse the phrase, as cleanly as possible . Rodney what we do strive to do is let the customer engage however they want to engage with us. We the customer pay have digital anyway you want to engage with us you can. If a customer does not want to engage with somebody, they dont have to. They still get the fresh products. But we really do strive to let the customers decide how they want to engage with us, and if you look at our digital business, you know, i always tell people job one is make sure we keep the customer. Over time we continue to learn how to be profitable with that customer and if you look at early next year we will open a couple of facilities, which guides, i know you are guy, i know you are familiar with. Kailey lets talk about that those automated warehouses how do you see that positioning kroger for longterm growth . Rodney if you look at digital business, as you mentioned before, it was up over 100 , and we will find that we will be able to use facilities that are efficient and effective for certain customers and there will be a combination of a bigger facility, smaller, local facilities in our stores both in terms of pickup and delivery shed andore and a physically going into a store it is the combination of all of those together that will create the seamless experience for the customer. Kailey are you saying guy are you seeing food Price Inflation there is evidence food Price Inflation is starting to pick up. Do you think those numbers are going to increase . They seem to be during the pandemic. Do you think the higher inflation rate within food will stay with us postpandemic . Rodney if you look at inflation, meat would be an area where we had significant inflation in the first and second quarters. Our projections would indicate significantly lower meet inflation in the Third Quarter and beyond. There are plenty of products in the supply chain. It is about having the plants not being able to operate and for the most part they are back on stream. If you look in other areas of inflation, we would see limited as we as you look out next of a you are assuming half percent to 1 inflation, which is more traditionally what we have historically had. Howey terms of pricing, will, if we do not get another stimulus package in the u. S. Which is looking unlikely, how does that increase impact prices and Pricing Power . Rodney our assumption is it does not happen. If you look in the u. S. , it would be helpful. When you look at customer behavior, you certainly see customers stretching their budget and paying attention to snapthey get paychecks and payments, and things like that. It is also one of the reasons why throughout the pandemic every week we have continued to do promotions. We continue to invest in price. We did not pass through all the inflation we incurred, especially in meat, and all of those things together, just trying to help our customers be able to stretch their budget. We also waived our pickup fee on digital. All those things together we are trying to do our part to help our customers budget go just a smidgen further. People stocking up right now . I am curious as to consumer trends. Where are we you talk about the big basket sizes you are still experiencing that are they beginning to pick up, are the skews changing in terms of the mix you are seeing im curious as to the preparations people are making as we start to come out of summer into autumn. I love that question, and our customers are telling us they believe there will be another wave on the pandemic, but so far they are not doing much behavior in stocking up. Now, we continually seek customers buying bigger packs than before the pandemic, and you still will find shortages in ,reas like hand sanitizers certainly quits and cleaning supplies hibor towels paper towels. You will see shortages in certain areas, but from a customer behavior, other than buying big packs, you also see customers buying more organic and natural products, and starting to get back into the rhythm of where they were before the pandemic from the health standpoint. If you look at our simple truth our own brand is up over 20 . Changes, but really not stocking up in a limited way. Kailey we have to leave it there. Thank you. Now we want to get back to bond markets. Investors searching for returns. Fu is here with the details. we are talking about a trade that arbitrage between u. S. Treasury futures and underlying cash treasuries. Investors would buy relatively sheep cheap bonds and sell more treasury futures. As the future expires, it compresses. This was seen as a low risk hedge fund trader. Hedge funds got into it as well. They would use leverage to amplify their gains. This fell apart during the panic in march when everyone rushed to say same time. Investors wanted liquidity, and because there is more liquidity in futures, they piled into futures and sold cash treasuries. Hedge funds that had levered up for this kind of trade got hammered and that caused a lot of duplication throughout the fixed income market. As a result, it is difficult to complete trades. That helped pave the way for the Federal Reserve to step in, provide liquidity, calm things down and restore smooth functioning of markets. Now, the Federal Reserve may have done its job too well because we have seen volume drop off open interest in twoyear, fiveyour notes are now the lowest since 2018 we get seen bond volatility go down as well, especially as the fed has shifted to a lower for longer approach and a willingness to tolerate higher inflation. There you see the open position in twoyear, fiveyour notes. Lower volatility has made other trades like options more attractive and other investors are bemoaning the disappearance of this trade because it was an easy way to make money with very low risk. Which sounds like something that we all want to do make money, low risk. What could possibly go wrong. Two i very much indeed. Thank you very much indeed. Michael kushma joining us now to follow up the conversation. I read your note early this morning. No real bargain in the bond market left anymore. Good to see you. Where are you trying to put money to work right now . Michael that is a good question and it has become more complicated for the various reasons enumerated with regard to lower volatility, the feds increasingly competitive commitment to keep Interest Rates low for an extended period of time so Interest Rates do not. Ove anymore they are already at low levels. Theres not much there. Mortgagebacked securities are at low levels. And there is a lot of highquality Corporate Bonds that have rallied a lot since the pandemic really took off in march. So, the assets which were very defensive, u. S. Treasuries, highquality bonds, they have rallied a lot. Yields are low. And there are sectors where there is yield, there tends to be more risk, and right now there is no way to get attractively priced assets yields that look reasonable at 3 or higher unless you take credit risk, market risk in emerging markets, or venture into sectors of the economy that had been negatively impacted by negative by the pandemic. Travel and leisure are still challenged and bonds have not recovered from where they were earlier this year. Were taking a cautious stance, looking at sectors of the economy that offer higher yields or spreads compared to where they were priced in february. They have not fully recovered and they are not too vulnerable to any kind of fall back in terms of the recovery, but we can still count on the fed and fiscal policy, hopefully, to continue to buy support for the economy down the road so they will be fine down the road. Spreads her a little bit wider. Not out of the woods yet, but it still should be fine. What does this mean for my 60 40 four fully young is portfolio . For the is 60 40 dead for the short term . Michael i believe it is. The yields or highquality bonds that go down even further. With the florida zero, the fed has committed itself at the floor is zero, not negative. That would be one reason why you on that compared to equities. They cushion you and do well when the cool breeze do not do well. 60 40 is more complicated and looks more risky than it has in the past because of less protection that comes from hennepin income. Guy the foreignexchange went through a long period where nothing happened. The pressure valve is. Ncreasingly found in f x do you see this shift . Michael it seems to be turning. We had a number of years with the u. S. Dollar was strong. The u. S. Dollar is at multiyear highs on a broad basis right now. The dollar seems to be turning and one reason it seems to be turning is that the fed has gone from detrimental, new 2018 they were on a relentless march to raise Interest Rates. In 2019 they were raising Interest Rates until the end of the up. They went from the most Hawkish Central Bank to the most dovish absent one small country called new zealand. Monetary stimulus the fed is providing is greater than most other countries in the world. The dollar looks like it will be soft Going Forward relative to most currencies simple because of the change in Monetary Policy expectations. Lets stick with the fed and look forward to wednesday. What does the market need or expect to hear from the fed given the way we are currently priced . Michael the markets need to see the fed be a little more forthcoming in terms of the details in what it is they plan to do. I am not sure we are going to get it. I am not sure they made up their mind yet besides what has already been discussed, meaning fully guidance is the cornerstone of the strategy and they said that in the last fomc meeting where they suggested no rate hikes until 2022. Maybe that will extend until 2023. They have been quite dovish on that point. We do not know what the Balance Sheet objectives are in terms of how many bonds they will buy how big the Balance Sheet will get. Sheetre using the balance bonds to stabilize the market. Theyill how much will use Going Forward how much will they buy in order to stimulate the economy, help the economy which higher inflation targets reach higher inflation targets . They want to know flexible, average inflation targeting what does that mean they have left it they vague. How hard could it go before they get worried about it . Some clarification of how they are thinking about these issues will be useful. Dovishll come out with projections particularly the gridlock in washington with regard to fiscal stimulus that could hurt the economy in the Fourth Quarter of this year. What you make of phil leblancs concerns regarding the currency linking the forces gripping the eurozone and the strength we are seeing in the currency. Does it point to more stimulus coming down the pike and you think the stimulus will be delivered in december . What does that mean for european government bonds . It is a good question. The euro is stronger of late, but not strong, and i think the euro is still on the weaker side of average maybe not far away from average historically. So, it has risen a bid on a tradeweighted basis. Look stronger than it does versus the u. S. Dollar, but yes, this is hurting the inflation outlook, which makes it harder to get inflation higher, making Monetary Policy harder, making mike life difficult for the ecb. They are not interested in cutting rates further. Their projections for inflation at the last eating for showing inflation meeting was showing inflation below target. They are not really doing much about it. I think what they need to do is take measures take steps any thought they would be ending their quantitative easing programs should be stopped and otherwise, they will say we will extend programs further into the future to help this process. Certainly, the deflationary prospect in europe are strongly influenced by what happens in seven countries like italy in particular, which has suffered economic stress if the dependent mechanism prior to that. It is good for peripheral countries. Michael, were going to leave you there. Appreciate your time. Michael kushma from Morgan Stanley investment management. Cio global fixed income. Oracle is now trading. I want to update you on where we are. Now ontrading 60. 9 right details that oracle is part of edance tiktok proposal. It seems like we are missing plenty of details. Up next we will talk about european air travel, which seems to be slowing down once again. We will talk to the eus transport commissioner. That conversation shortly. This is bloomberg. Ritika this is bloomberg markets. I am ritika gupta. Gathering totival focus on key issues of climate action. Lets check in on the bloomberg first word news now. I am ritika gupta. Oracle has confirmed they are part of the tiktok proposal submitted to the u. S. Treasury department. The proposal calls for oracle to be the close, trusted technology advisor. This is after bytedance is under pressure to sell off american operations. Steven mnuchin expects a National Security review of the deal this week. Tropical storm sally is taking aim at new orleans and Southeastern Louisiana and it can turn into a hurricane and is likely to make landfall tomorrow morning, making it the second length hurricane to hit louisiana in a month. Sally has led to evacuations on some Energy Platforms in the gulf of mexico. President Trumps Campaign is scaling back Television Advertisement in some states because of a cash crunch. Thewo battleground States Campaign did not run ads. Bid is making another i mean on medics makes a promising Breast Cancer therapy. Meanwhile, mark has made a series of deals. They will take an equity stake in the company and pay as much as 4. 5 billion. Global news 24 hours a day on air and on bloombergquint take powered by more than 2700 journalists and analysts in more than 100 20 countries. I am ready to go to. This is bloomberg i am ritika gupta. This is bloomberg. Suspending operations to use airport slots. A transport commissioner says she would propose the waiver until march 27, 2021 basically the carriers are now required to use 80 of land in positions or risk losing them the following year. Joining us now is the transport commissioner. Thank you for your time today. What conditions walk me through the conditions that are attached here how enforceable they are and how you will legislate this . I would say there is good news that we are able to promise the airlines a waiver for the winter season, but this cannot be a blanket and we have to attach conditions to this. We do not have come at this stage, the possibility to enforce conditions, but i will say the industry, would they will discuss with themselves and come to a gentlemans agreement with conditionality him and some of the most important are to have creditability for the airports those that are not intending to use the slots to give them back at least three weeks before, so, giving time to organize the activities or two spill oute type of. Rom these waivers these are part of the conditions. Greed by the industry itself apart from that, we are thinking also about some additional this willlity is, but be expressed in amendment i am intending to put forward to the regulation. It would probably be adopted and taken into consideration for an eventual waiver not for the next one. Commissioner, what are you seeing right now in terms of demand for air services . Thatu listen to the guys run the skies in europe, and other factors we use, they talk that demand is not increasing but starting to fall in europe and the reason for that is a lack of coordination between european states. What you need to do to try to to actuallydination allow the European Aviation sectors to get back on its feet . Is well, it adina well, it is true. Before having the decision, we ducted an evacuation evaluation that you will have a. Rop in air traffic you also have one of the causes for this that is true the lack of coordination, the lockdowns, the restrictive travel measures taken by various member states. Another is a drop in confidence of passengers to book flights. Swiftn see there is a switch in their behavior. Closer to theng time of the flight and they have confidence the flight will not be canceled. Some of the airlines behavior of not returning the money for the canceled flight also diminished the confidence of passengers. There are several causes for the drop in the demand. Still, the peak across europe. Also, we are moving in another season. So, as i said, this is what we can do. We prepare for the next year to have a more targeted and taylormade approach to an eventual waiver if they fail to take up numbers next year. Also, in terms of making the whole system more efficient, i willing to propose regulation to make a traffic modernization. We are monitoring, but this is a market issue, and we also have to restore the confidence of the passengers if we want to see those numbers coming up. Commissioner, hold that thought for just a moment. The president of the european commission, angela merkel, the german chancellor, our briefing currently on the combinations had with chinese leadership a little bit earlier on. Between the eup and china is getting more difficult, pressure is being applied by the leadership for china to improve its Climate Change its attitude toward Climate Change, and, certainly, the head of the European Council talking about the relationship becoming much more difficult. Merkel is now saying a full summit to take place on the virus situation has been in mediated. This good, what we are looking for is a much more reciprocal relationship certainly the European Union would like a more reciprocal relationship between europe and china. We will leave it there, actually, a conversation with adina valean. Two are very much indeed. We appreciate your time. Coming up, we will carry on the conversation and talk more about what is happening with the situation in europe and between the u. S. And china tiktok. Also a factor. We will do that a little later. Kailey i want to check on oil despite the fact opec has cut demand for 2021, w t i futures 2 3 of 1 can we keep having the conversation about the speed of the oil recovery and now it seems to be reversing. The supply and demand than mx not accelerating or improving in favor of the labor market as they once were. We heard that reiterated earlier today. The shop saying it will likely be back in a surplus in the near term and we want to get more information on this now with futures in focus. Again, were looking at oil here. 30 . Down now we have mike, Bloomberg Intelligence commodity strategist. What is going on . Mike it is the power of estimate revisions, and for a good five years or 10 years the estimates for demand have been lower. Opec is fighting a losing battle. They are about 20 of the market. 10 years ago they were 40 of the market. Wheres the trend going . That we have the stock market. At least it is up today. It cannot go higher. Guy mike, what should i make of the fact that some of the large funds are starting to buy s . Whatty on the ltc should i read into that and what does that tell me about the capacity oil the next few months . Mike there is a lot of storage, way too much supply in the markets. This is deja vu all over again, and the problem is, from a guy that likes to be bullish, crude oil is not the commodity to be bullish on. Read when you see deja vu all over again in terms of one the most remarkable market instances in 2021 crude prices actually went negative . Is there a risk of that happening again, or not that dramatic . Mike you say never say never, but i would say never. We have to have that initial sock. You mentioned brent earlier. Brent did not do that, but wti reflect that massive supply and the plunge and demand. I think wti 40 is basically the new 60 60 was at resistance last year. Now it is 40. I expected to hover and the risks are it goes lower. Guy in terms of what we are seeing another commodities, how much of this is reflected in some of the other price action . Mike that is a unique thing. Has correlation of commodities is typically between the macroeconomic sensitive two, crude oil and copper, and right now copper is doing very well hanging out around three dollars a pound. To include a trade to get a pet i view copper is a high risk of Falling Crude oil lower in the number one catalyst would be the stock market decline. Hopefully copper can hang in there, right now im a little bit worried about copper. Guy mike we will leave it there. Were all in a worried about copper. Well see what happens next. Bhana malaysia joins us. A massive update. We have the fed this week. All of that coming up. This is bloomberg. From london i am guy johnson. Down to theing you european close on bloomberg markets. Are waiting to see exactly how this eu summit between china and the eu affects the relationship Going Forward. Council of the european saying within the last few paytes that europe will not for the differences that exist between china and the eu. We will have analysis on what this means. Lets talk about what is happening with the brexit trade. A row in the u. K. Over Boris Johnsons controversial law raking internal the legislation in the house of commons today and fireworks next week. Hintts out of switzerland that ubs is exploring a merger with credit suisse. We