Julie it has been relatively steady. We have seen stocks bumping barelythe nasdaq negative at this point. The nasdaq is set to snap a sevenweek winning streak with the down week this week. In terms of today fell session, what is putting the pressure on divinaverages, there is health care, the Centers Power medicare and Medicaid Health services apparently looking for made beon health biters Health Providers may be the aca patients to health exchanges. And Energy Prices bouncing around today this is negative and estee lauder out with numbers that missed estimates today, particularly its forecast, i should say, trailed analyst estimates. We have positive numbers from forecaste company ahead of estimates, foot locker sales rising more than estimated, and Applied Materials also with a forecast above analyst estimates. Those are helping to power those stocks higher and mitigate losses of role. Vonnie interesting. It has been a day off reversals, julie. Weie it has been yesterday saw a huge drop in Corrections Corporation and geo group. These are two of the largest rabbit prison operators in the private prisonst operators in the united states. Each of them dropped 30 , 40 . Thatanalysts are saying that drop was perhaps overdone, the scope of the cutback in revenue may not be as much as the price drop would have indicated. Corrections corp. Did say the u. S. Bureau of prisons specifically was not going to be doing a contract renewal and will canceled it be renegotiating. Those shares bouncing more earlier in the day. Then the other reversal we have seen is in the u. S. Dollar. We have seen it actually decline yesterday. We have been seeing a reversal in bond yields as well. Lisa i imagine the private Prison Companies will be volatile as people figure out what is going on. Hanks a lot, julie lets have a check on bloomberg first word news. Ramy inocencio has more from our newsroom. Paul manaforpaign Trump Campaign chair paul down. Rt has stepped he came under scrutiny for his prorussian forces in the ukraine. Slammed by republican lawmakers, the state departments explanation, the first time is that the two evidence of been linked. House Speaker Paul Ryan accused the president of misleading the public. Olympic swimmer ryan lochte has apologized for the haters surrounding a latenight incident at a Rio De Janeiro gas station, saying you should have been more careful and candid about what happened. He said he was apologizing in in taking the focus away from other olympic athletes. And the nba has decided to all between 17 allstar game in new orleans. The game was moved from charlotte, North Carolina over a state law that removes protections for lesbian, gay, and transgender people. Global news 24 hours a day powered by more than 2600 journalists in 24 countries. Im ramy inocencio. Lisa with all of the recent gains, are there any bargains in the market . Joining us, the chief equity strategist at credit squeeze. Creditwe get start at squeeze. Before we get started on outflows, we have the largest in u. S. Equity funds, passive and active, in six years, and yet itssaw the s p 500 post biggest rally of the year, up 3. 6 . What gives . Does it not matter what Retail Investors do anymore . That, theres a really Interesting Data point there were some outflows, but there are pockets of buying that were underpinning this rally. Lisa hold on one second. In other words the etf inflows good that a loan have driven some of the gains . I think in the context of fairly low trading volumes, yes. They are and are pinning some of the gains, but this cannot continue forever . What about those that are not popular right now . Lori we have been hearing a lot about low vol etf, and we have heard chatter those a reversing. Vonnie interesting. I just pulled up a chart, showing the mix for the last few trade sessions, and you see most of them are below 11 recently and before as well. That can be a contrarian too, though. Best caseink the scenario is to grind higher. Worstcase scenario is a modest downside. Investors are trying to figure out what is cheap. They are doing their job. Lisa so it is cheap. Lori ortation transportation stocks have been doing well. Arelcap Energy Stocks doing well. Hedge funds have retreated very sharply. Vonnie can i jump in and say that things are cheap for a reason . Look at the s p 500 retail index. Basically, you know, it has been on a bit of a chair. A bit of a chair. True. Thats the question at the end of the day is whether that is priced dan and i am starting to hear from a lot of investors it might be. Lisa i want to turn back to the flows for a second. Typically when investors scrutinize all different market metrics, you see there are big outflows. That gives you a feeling of momentum. Why is that not working anymore . A sense of probably yes, why is thaty, but not trickling into the market . Ri we have seen more momentum on negative flows for many, many years in the market has been climbing. Lisa who is buying . One area is corporate buyback. That has been a big driver of the rally. Lisa some people say it is running out of steam. Can that continue to power the rally . Dont distract buyback activity levels, but buyback announcements. The number of Companies Making buyback announcements has been easing back. If you of removing think about the different legs of the stool of this rally the last two years, that is one of the strongest legs. Vonnie interesting. We heard the Third Quarter being the nadir of earnings. You believe that . If youve looked at our last reporting season, anything that was backward looking looked great. Anything forwardlooking, looked week. Vonnie that said, do we have to worry about the Federal Reserve at all . The willry not to play they, wont they game with the Federal Reserve to read we have been doing that for years. When you look at the Utility Space and the bank space utilities, two standard deviations suffered a longtime average and at some point we will see a reaction. Lisa what part of the market, do you think, is most vulnerable . Lori the staples, the utilities if you ignore the new flow, you look at the stocks and say, how can i make money there, i just dont think that you can and it may be a painful trade in the shortterm, but you have to look at that. Semiconductor exposure can be pretty high there, too. They do not look expensive and i think that has sucked a lot of people when. But it has climbed dramatically over the summer. So, everybody has been built up. They have worked. But i need think you are starting to see risk emerge there as well. Thanks the coming in. We appreciate it. Fall ofp, xiaomi sees a 30 in china according to idc. We hear about their strategy from the company vp of Global Operations. This is bloomberg. Lisa this is bloomberg markets. Im lisa abramowicz. Vonnie and im vonnie quinn. Its time to the Bloomberg Business flash. The two major Prison Companies are back up today. They are up 22 after a 40 drop yesterday. Closedions corp. Yesterday at the lowest in five years. The sun news that the Justice Department will and using private companies. Foot locker shares climbed to the highest in four years earlier today after posting secondquarter numbers that beat estimates. Analysts had estimated . 90 a share. It also helped push shares of nike and under armour higher. The locker says that classic style helped drive growth. That is your business flash update. Seems to be losing ground in china. Numbers from idc showed it Second Quarter phone sales tumbling. Xiaomis Vice President of Global Operations, hugo barra, about china with betty liu. Take a listen. We are seeing, betty, a relatively flat yearoveryear trajectory. Which has to do with the supply change. We are a relatively young company. We have only been around for about six years and china. What is interesting about our business in china in particular, demand has never been as high as it is currently. We have seen preorders or prebookings for some of our latest flagship devices we have never seen before. We had 16 million preregistrations before the device on day one, the first sale. Deviceched a very large which on the first day had 16 million preregistrations for the first sale. To makelenge for us is sure we work our supply chain to meet demand much earlier in the lifecycle of a product. From a demand perspective, our business has never been healthier. We just have to make sure our business our supply chain catches up. This is one of the most important things we have to work on as a company. Betty you attribute the Slower Growth or the flat growth, as you describe it, to a supply youn problem and not that are losing out to some of the domestic smartphone makers . Thats right. We are seeing Unprecedented Demand for our products in china. From that perspective, we are happy with our brand. Otherina, india, and markets as well. Guest betty overall the makers havephone been declining. D. C. This stabilizing anytime soon, hugo . Guest the markets that we look are inty, our markets the hyper growth phase. We are in a particularly interesting position. India is a very fastgrowing market. Market is not growing extremely fast. It is growing. But more importantly, the market of oure focus almost all our attention, its doing very, very well. In india over the last two quarters, our performance has been quite noticeable. Idcad numbers come out from one of our most important products in india the highest selling smartphone in the india, of the market in meaning no other smartphone has sold so many units, so much volume, basically people buying phones over the internet. India, our business has been growing on average 72 sent yearoveryear. Which is really been extraordinary. And just for this one model alone, we shipped about 1. 7 million phones. Product. Latively new the part of the market we see is andonline internet market, from that perspective, we are seeing very healthy growth. What is your strategy in india, because that is a growth market. What is your strategy. In india istrategy quite similar to our strategy in china a few years ago. We are a very young brand. College students, recent grads, young professionals. We communicate with our customers. We share news. Its essentially our marketing channel. And we also sell almost exclusively online as well. We have an entire ecommerce platform deployed in india and we work with all of the main online friends brands to sell online. We have grown to be potentially a house rand when you look at the online market, those customers reading tech blogs, making their buying decisions on the internet, which is very good is listening for us to have. Given the direction that retail anywhere around the world is going is online. Xiaomis Vice President of Global Operations hugo barra speaking with betty liu. Is upto come julio more than 200 since the public debut earlier this year. This is bloomberg. Vonnie this is bloomberg markets. On vonnie quinn. Lisa im lisa abramowicz. Now to julie hyman with the options insight. Thank you. David, we continue to have this tight range for the s p 500. I think we are in 30 straight sessions without and move of at least 1 . This is not something i have in asking you options guys, but im going to ask you today how tough has your job and with these tight ranges . Is it hard to find interesting is to make in this kind of environment . Its a wholeow, lot easier when there is volatility may market, when the indexes are whipping around and we have levels we can play on the broad market indexes. But then you try to find earnings plays or the new hot it takes more shaking the sand to try to find the nuggets than in a much more volatile market. Julie i like that panning for gold metaphor. Twilio is a company that just became public back in june. Since then, the stock is up more. Han 250 it sounds like you do not think it will keep on that hot streak . Guest well, this is the thing. Not only is it comes upon to say but we love the stock here because its an area of growth for the market. Evolution. E this we will see this over the next year or so. It will change the way we interact with technology. Twilio is sort of at the forefront of this. ,hile i am bullish on twilio this is a relatively new stock and is pretty much first unicorn of 2016 we saw go public and rock out. ,he trade i am doing on twilio rather than just buying the calls or call spreads, because i think they are pricey, im going to flip it on its head and im selling be put spread. I am going out to january and buying the 40 put. Staysically twilio can sideways or not go below 50 and i will end up making 5. 50 having put up only 4. 50 of risk. Way ik that is way the can mitigate my risk and not worry about it whipping around. I will sit back, relax, and in january hope will be cashing some checks for twilio. Julie hopefully we will have many opportunities to say twilio in the future. Thank you very much. Have a great weekend. Back to you guys. Vonnie thats great, julie. So much Economic Data comes out of canada. We will be looking at canadas economy next. This is bloomberg. Scarlet m bloomberg from bloomberg world headquarters, im scarlet fu. Joe im joe weisenthal. the death toll from the terror attack and nieces now at 36. Hundreds more were injured when droven man broke a a truck into a celebration. In the meantime, in the u. S. , donald trump cap a week of with ac campaign changes bombshell, the resignation of paul manafort. Manafort had also come under increasing media scrutiny support for the prorussian former president of ukraine. Hillary clinton is ratcheting up fundraising efforts. She has more than 60 events planned over the next five weeks across 16 states. She also has an event planned in the netherlands. Donald Trumps Campaign is also planning more Campaign Raising events. It is suggested that pregnant women and their partner should suspend travel to miamidade county. They found a second zone of local transmission in an area that includes the popular south beach. The state now has two areas considered active for potential exposure. Russia is denying involvement in an attack and aleppo, syria, which wanted this five which one to this fiveyearold boy. The image of the boy has become a rallying cry for the world to do more. Russia is blaming rebels for the attacks. Im ramy inocencio. This is bloomberg. Oliver . Oliver thank you. The markets close in 30 minutes. Lets go to the nasdaq with abigail doolittle. Hey, abigail. There we are friday at the end of the week, minutes before the close and the nasdaq is right around flat after very small gains and losses all day. Lastis a mirror image of friday. Also, going into today, last friday, the index was up a little bit more than 1 10 the 1 . Exact same scenario. And how the nasdaq closes, whether it is up slightly or down slightly, will determine whether it can put in its eighth weekly winning streak. Since 2012. Weeks its interesting to see. If it does put in that eightweek winning streak, it will be again since 2010, which last time, that winning streak right before, oliver, the great flash crash. Behind the tension, we have some winners and losers. On the losers side, shares of the organic food company down huge on the week, down 30 , having their worst week of performance and 13 years after paint celestial said that there celestial said there were reporting issues. They had to abandon their fullyear target. We were fortunate enough to speak to joe vendetti, who cut his rating to a old. He said it is a revenue recognition issue where they are recognizing revenue too early. We will not know the degree of the issue until audits come out. At lets go into the bloomberg and look at g atv. It suggests that not everybody is surprised by this. There is a strong correlation right up into the end of last year where revenues darted to track higher. Somecould be a tell that investors but there were accounting issues or something going on that caused the stock price to go down before this issue. Oliver all right, so we looked across the benchmark indexes. Itt has helped to keep afloat relative to its peers . Abigail netapp. The Storage Company put out a firstquarter report blowing out estimates and provided very strong guidance. On this we had analysts as they are successfully moving towards flash. We were fortunate to speak to an on this call,rly he has been bullish on the stock for months and months. , looking ahead, he believes 61 of the revenue will be high revenue, earning 24 . That should help the company returned to type line growth next year. As a result, we could see estimates, multiple extensions. In other words, there is reason to think that the stock could see more of side. Oliver all right, abigail, great stuff. Having finding great movers on an otherwise quiet week. Skip septembery and opt for december when opting for a rate hike. That was consensus this morning for an analyst from jeffries. Theres a lot of noise from the fed. There is a dovish coding to some of the minutes, too, youve got to admit. Fomc heads who did not want to see that made, thinking that the u. S. Economy is a little less inflation prone. Chair yellen, we do not know where she is in between the hawkish and dovish blank. Inflation is not yet established. Lasted cpi print this week was on the softer side. Growth,etting good jobs no doubt about it, but were not getting much productivity, and is going to be hard for the fomc into relatively tepid income performance. I think theyre going to do it. They will probably tighten by december. This leads me to a chart of the week. The purple line projected out the red line is what the Overall Committee inks the Interest Rate will be at over 3 . The blue line is the fed runs rate. If you trust williams, there is not much room to tighten. Policy is not that accommodative right now, david. In the u. S. Or in other countries . They weree issue is hoping that the fed would raise rates and do the job for us, and we hope for a fed rates rise in december. And it will continue to normalize and 2017. On thell help the euro foreign exchanges. But yes, all of the Central Banks are having this huge issue about where is the neutral rate of index interest. The bank of england is embarked on qe again. The ecb has negative rates that are still doing qe. We should see this in europe, firstly in the u. K. Ahead of the statement they will be much more focused on infrastructure, i think, but i hope this the reaction out of european markets. The brakes it affect has not been all that bad at all. Is captured by the bond market currently. Do you seeeld that getting more dramatic in the months ahead, david . There was a referendum in italy. It has been over coming weeks and months. It has to be said it will continue to improve. They are analyzed pretty safely for quite some time and obviously there is a huge issue with loans in the italian banking sector. Having said that, the ecb and other banks in the system are continuing to buy the paper and scale. And they will extend it out into march and september 8. The Central Banks will buy more of the outstanding paper in the markets. So, that is keeping spreads generally tight. The italian referendum is clearly one risk out there for us hitting in europe. Big risk, but very different from 2011. When you look at stocks outside the u. S. , is that data dependent they meanependent, the real macro side and the indicators of financial conditions. They realize that they are providing important support to u. S. Equity markets. That is part of how the transmission works. But time and time again, you hear fed officials talk about Financial Stability you hear them basically insist on a separation principle i. E. , they have enough supervisory and regulatory tools to deal with concerns about Financial Stability so they can let the macro decisions be somewhat independent audit. Not completely independent. One reason some of them want to raise rates is they are uncomfortable with rates being this low. They just worry that perhaps they are inflating asset prices here and maybe abroad. That was Vincent Reinhart and davidow and of jeffries. Coming up, Economic Data out of canada is it just a blip or are the concerns about the longterm direction of canadas economy . This is bloomberg. This is bloomberg markets. Im scarlet fu. Its time for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. The dropbox ceo is stepping down. She is leaving due to health reasons. She joined the Company Early last year. She will the replaced by a key deputy. She will remain through the end of september to ease the transition. Bridgewater associates is paring losses and one of its main hedge funds at a gain of almost 3 . The return trimming the decline ior bridgewaters cure alpha i to about 2 . They had lost about 11 through july. Investors do not seem impressed by anderson electrics by of another business. Emerson shares slumping most on utilityamong u. S. Shares. It was the biggest intraday drop since august 2. The worlds Biggest Exchange operator is going back to school. Will search for the coders. Ngcode going toet firms are the likes of google. Any edge could help. And that is your business flash update. Canadas inflation rate slowed more than expected last month on the heels of an unexpected decline in retail sales. Inflation below the 2 target for almost two years. For more on this story, lets reporter from toronto. Where is inflation in canada relative to where the central bank would like it to be . How much work to they have to do . Theyve got a bit to do. The mandate is to have conditions that would be a dream 1 and 3 , and they are at 2 , which is the midpoint, the sweet, for almost two years. Expected. Weaker than it dropped in june. A lot of it was on the back of lower gasoline prices. Gasoline prices fell 14 yearoveryear. Even if you strip that out, inflation is running pretty flat at 1. 9 . Still below the 2 figure. Its not consistent and i think this is what is worrying for an economy poised for a real turnaround. Oliver when you talk about a turnaround and low inflation, it does beg the question, are the average canadian consumers benefiting from those lower prices . Sometimes you do. Abouty if youre talking low inflation, you want to see inflation below and things that affect the consumer wallet. In that sense, lower gasoline prices ought to be helpful. We have not seen the full impact in terms of growth yet. Thoseshelter are 2 are up 2 year on year. On the food side, the bank of canada has talked a lot about the fact that food prices are more expensive because the Canadian Dollar is weaker. We import a lot of food. The shelter costs are more complicated. We have a very catchy market. Obviously we have two markets that are very, very hot. The rest of the country is not. When you say inflation is below 2 , but rising in terms of housing or shelter costs, it does not tell the full picture. We know the canadian economy has been buffeted by the commodity collapse, particularly the crash in oil prices. What about noncommodity real estate places, that are sort of excluded from these global macro trends . How are they looking . Not as good as the bank of canada would expect. This is a perennial problem in canada where the trudeau government is talking a lot about economic transition and what our a plan and be plan is. Manufacturing is still vulnerable. They expect to see a big improvement and exports, but given how weak the Canadian Dollar is, that has not materialized to the extent you might expect. And then we had some oneoff shots. Those wade heavily on growth. And retailall in sales were quite lackluster for the month of june. Onnot firing in all all cylinders. At least not yet. Scarlet im glad you brought is the week loney. It show up in any way do you see it show up in any way, retail sales, for its its . A weaker Canadian Dollar makes imports more expensive for the average consumer and that may be one of the factors weighing on canadians and making us less willing to open our wallets. Energy prices have been lower, so that is thought to be helpful. We have seen the big runup in oil prices. It is not clear yet why canadians more it buying in the month of june, but certainly it off guardnalysts because that number was weaker than they had been expecting. Big playerada is a in the energy space, with regard to shale as well. You see a 20 gain in a bull market. How does that balance out when it is lower and helps the consumers out . Yeah, it hits you on both lives, right . The economy is still incredibly heavily weighted when you see oil rally or fall dramatically it always affects the tsx. Equity stocks. Is a huge part of our growth picture. The only benefit you get from lower Energy Prices is like anywhere, if it bleed through to the, people feel a little bit richer. Energyd strokes, higher prices are good for canada and lower Energy Prices are bad for lot goingd so, a forward is going to depend on Energy Prices. The bank of canada is predicting we will see 2. 2 gdp for next year. Are expecting a pretty big turnaround. Even on the bloomberg terminal, 2. 2 are looking at a growth for canada in the Second Quarter. Theres a lot of expectation among economists that we are right on the brink of a pretty big economic turnaround. There is nothing in the data to suggest that is eminent. Daniel the cove, thank you. Money. coming up, easy we have three charts you cant miss. This is bloomberg. Scarlet this is bloomberg markets. Im scarlet fu. Time now for our chart chat, where we look at trends and charts. I want to start with the banner week in oil. Crude is mentioning able market, as oliver mentioned. With prices headed higher again, it is drill, baby drill. Shale drillers have added the most since oil was valued at 100 a barrel. The last time we saw Something Like this was back in 2014 before the oil crash. There is speculation that opec will freeze output, but we have been here before. We heard that before, and nothing happened. Depths ofember the the Oil Bear Market earlier this year, people were talking about oil cant surge that much more because production will come back. Oil has bounced back quite a bit, but production is coming back. A way to look at the existence of labels and how we identify stocks. This is a bull market, this is a bear market. You have to remember, when you are at the lower prices, obviously, it does not take what is much. Scarlet this is all in the month of august. Oliver i will be looking at volatility in the stock market surprise surprise. It has been very low. Its looking at a stretch that has a very big day in the victim sunder 15 its a 33 after today, 33 straight sessions. That is not happen in two years. The last time that happened was a stretch in 2014 where the market was doing pretty well, climbing to new highs. To think the picture of placidity is a word i would like to use it has been the story of the market. Scarlet placidity is less judgmental than complacency. Like a nicety is lake that is just beautiful. All right, we are getting housing data next week, existing home sales. Lets look at what is happening with existing home sales. That white line, that is the 30year average Mortgage Rate and thats one of the big stories. To alltime lows and , existingellow line home sales, the highest since 2007. Cheap money, more sales. I want to go back and look at existing home sales scarlet lets put that up again. Here is a 20year chart. We are very far off where we were in 2004, 2005. We still have a way to go. Scarlet that does it for bloomberg markets. Whatd you miss . And the market closes next. We have less than four minutes before the close. This is bloomberg. Scarlet we are moments away from the closing bell. I am scarlet fu. Joe i am joe weisenthal. Whatd you miss . Oliver. Iver rent Janet Yellens shares her view on where policy is headed. We have the charts you cant miss. Does it just need to grow up . Sliver rapid demographic around the world, we will find out what it has to say. Scarlet u. S. Stocks drifting lower. It was a modest move. A stat that tells you what happened. Is in its 30th day without a