Tourist spot. Images show scenes of chaos. Please close off the center of barcelona and told people to stay home. With ourthe phone reporter from madrid. Officials are trying to piece together what happened. What can you tell us . We are getting mixed messages. What has been officially said is there is one person dead and about 30 have been injured. A lot of reports are coming out that the number could be closer to 13. What happened if there is a promenade that runs from the beach. It is a key place for tourists so it is crowded 24 7. Is ais summertime so it peak tourist season. The van went straight at people, hit and killed a few, and at least two people escaped. There is a report that one has two arrested and one or others are in a restaurant nearby and maybe negotiating with police. Arelet police in spain calling this a terror attack. Our people are people claiming responsibility . Rodrigo we dont have confirmation of that. The Spanish Government is careful with the word terrorist because of their history with terrorism. When they come out and say it is probably because they feel very confident this is the case. We havent heard from anybody who may be claiming it to be the case. Now, it is evening in barcelona. What is the status of the city center . Have people still been told they cannot come back in . D up inple still hole the building or offices because they are afraid to go home . Evening if they runs later than in the u. S. People in the u. S. People will go to dinner at around 9 00. A lot of the shops and stores have closed and they are not open in the area. People can walk around parts of the areas, but traffic has been cut off, as well. That has not been opened yet. The president of the u. S. Tweeted condemnation of the attack. L do whatever is necessary to help. Whether any safety precautions the taken in other parts of spain, madrid for instance . Rodrigo the police have these alerts. We are on a high level alerts. Highlevel alert. There is nothing major at a nationwide level, but they put on their alerts. Thank you so much. Let us turn to the markets as we are under two hours from the close of trading in the u. S. Lor i would mention we are still continuing this risk off the field feel. 500 is down about 1 . Were covering the lows of the session since the reports are out in barcelona. No additional reaction to that. Holding steady, down 1 . The dow jones transportation index is down almost 2 here. Looking out all the major averages here slightly in the red, down near their lowest of the session. Feeling that is perhaps some of the risk off trade and bond yields are heading lower. Down two basis points to about 2. 21 . I would note to bring this in that surveillance confirms a call for a 1. 9 here on the 10year heading in for the rest of the year. With that to quality, you sometimes see a selloff in the financial, as they can be a bit correlated to the yields. I will point out bank of america, the worst performer in the s p 500 financial sector. Down about 1. 5 . We have been touching on the Retail Sector today and earnings. I will highlight alibaba, that came out with earnings this morning continuing to show their dominance over the chinese consumer, with the revenue jumping 6. 6 and profit almost doubling. Increasedtive users to 530 million. Analysts feel pretty good about the alibaba stock today, up 3. 5 . Julie we will talk more about walmart later in the show. It has been the summer of tranquility for the 14 trillion treasury market despite the uncertainty around military monitary monetary policy. If you look at the bloomberg here, you can see it is about the most tribal. Tranquil. Tranquilk to 1990 period going back to 1990. Only once in the past 27 years didnt yield traded in a persistently tighter range. Joining us is the senior poll for leo manager senior portfolio manager. She is joining us from our offices in pennsylvania. Thank you for having me. Julie it is interesting that we have seen the tightness of this range, given the events we are seeing today in barcelona in barcelona and the geopolitical environment, and given we are seeing the odds for the next rate hike getting pushed further out. Why have we not seen yields lower than they are right now . Reat think there is a g deal of uncertainty. The markets appeared to be awaiting more information. Much like the central Bank Statements we saw yesterday from today. And the ecb the markets are trying to digest the slow growth, low inflation environment. While theyre waiting, we get stuck in the field range. Scarlet that is a consensus view right now. This uncertainty. You are pretty clear, you believe inflation will come and te may be10year ra pessimistic uruguay is the bond market wrong . Gemma we really like to put it the global context. If you think about where Global Growth has come from in the last 18 months, we have had a synchronized Global Growth story. We have been global inflation and as aslowly concern for policymakers, but still at an upward trend. Becky to optimistic because we see it expanding into 2018. That expansion has been going on, but we have not seen inflation yet. When you see is the biggest factors holding it back that might dissipate . There are transitory factors that might have been holding it back in the u. S. This year and the fed has highlighted them. Someare technology, dampening of Consumer Prices earlier in the year after china and the west raised Interest Rates. We think that is behind us. We see growth accelerating into the second half of the year a little bit above 2 . We think the underlying trend in prices,n rent, home and wages will continue to accelerate into it 2018. Is the global backdrop dissipating. From the segue economic backdrop for a moment and toward the policy, i want to ask about gary cohn. Earlier today we saw a blip in the equity market and in the treasury market when there were reports he might be leaving the white house. He isite house said, no, not leaving his position as head of the economic council. How important do you think his position is to the markets and to getting President Trumps tax reform and economic agenda satisfied . Gemma i think there are two points to take out of the headlines and the rumors. One is it tells you the market is focused in on who the next fed chair may be. The Trump Administration will have an opportunity to populate almost the entire board within the next year and fill vacancies that will be there and potentially replace the chair. The market wants to know. We are getting to the deadline and the congressional calendar where it becomes important for the markets. The second is i think the market has low expectations on fiscal policy. The market is always looking for some kind of clarity to break us out of this Interest Rate range and to be able to have a forwardlooking view. The changes in fiscal policy may mean economic activity. The jitters are around the headlines and they tell us the market is seeking more information. Everyone is trying to figure out who will be the fed chair. Cohn is said gary to be one of the leading candidates. There were tweets about how is janet yellen were to be asked she should not be because the request is being made by this particular president. Do you think the job of the chief is a political appointment . Gemma the fed chair is always politically appointed and approved by the senate. In the end, i think what you see out of aair seek chair is someone who continues the policies of the institution. The next fed chair, whoever it may be, should continue on with it so it eases the burden of any kind of transition. I think the markets are looking for clarity. Were looking for the feds announcement and Economic Data to give us that forward path of Interest Rates over the next 18 months. Scarlet thank you for joining us. Let us get your check on bloombergs first word news. Reportolice in barcelona that no one is at large in any bar after the van mode down passengers in the historic district. Police confirmed one person has been arrested. Theident trump condemns deadly van attack in barcelona. Rex tillerson offered his condolences to the victims of says arek, which he the hallmarks of another terrorist attack. He added, terrorists around the world should know the United States and our allies are resolved to find you and bring you to justice. The white house says it is working to find a convenient time for the president to speak with the family of the 32yearold woman who was killed while protesting that white nationalists rally last month last weekend, excuse me. A spokeswoman says the white house appreciate the unifying words of Heather Heyers mother. She did not address the press the question if the president would visit charlottesville. The largest, humanitarian crisis in the world. There are now more than 20 Million People in the country in need of assistance to meet basic needs such as health, water, sanitation, and food, according to the u. N. Thousands andlled displaced 3 Million People. Nobel laureate has been accepted at the university of oxford. The 20yearold activist shared word of acceptance to the school on twitter. She plans to triple major and in Won International acclaim 2012 after she was shot in pakistan for speaking out for the rights of girls to go to school. Global news 24 hours a day. Powered by more than 2,700 journalists and analysts in more than 120 countries. Im Mark Crumpton, this is bloomberg. Scarlet . New wrinkle in trade tensions between the u. S. And china. Steve bannon could be complicating ties as he takes aim at the worlds secondbiggest economy. A former u. S. Trade esentative ways and weighs in. Julie this is bloomberg markets. Scarlet while nafta negotiations are underway, Donald Trumps chief strategist is grabbing the info on trade today. Bannon said, to me the economic war with china is everything. We will be focused on that. We are 10 years at most from hitting an Inflection Point for which we can never recover. Joining us is the chair of the National Committee of United Stateschina relations. I want to get your take on Steve Bannons quotes. Was there some truth in it . You are probably having reference to the executive order that directed the u. S. Trade representative to tradento chinas practices toward intellectual property. You think he is making a specific reference to that. He also talked about filing complaints about the 1974 trade act. We have talked in the past about the wisdom of doing that versus filing complaints through the wto. Carla they are not mutually exclusive. Does his301 statute job right and investigation. We dont know how it will turn out. I continue many u. S. Companies have complained about chinas failure to enforce its intellectual property laws or the to the conditions on it. I can tell you our Homeland Security has said a majority of the counterfeiting goods that come into our country come from china. But that is just not what i call an investigation. This investigation could take nine months, 10 months, a full year. If the u. S. Trade representative finds there is a basis for taking action, he can bring if there are wto no rules he feels are applicable. He can take action unilaterally. We just dont know yet. Scarlet there was a response from china to mr. Bannons comment saying, there is no winner and a trade war. Carla we have used 301 rarely in the past, but we have, we came to a resolution that was pleasing to the United States by consultation and negotiation. I think it is premature by a longshot to say that we are going to bring an action. What we are going to do is look at the facts. Speaking of ongoing negotiation, i want to get to the topic of nafta since you were involved in the original negotiation of that agreement. What mistakes do think my have been made in the nafta deal and what do you think can now be improved upon . Carla i dont see mistakes and what was negotiated. Let me say we eliminated industrial tariffs between the three countries. Up agricultural market between the u. S. And mexico. We opened up the services market, the investment market and had a good the them of intellectual Property Protection resolvinganism for disputes. I am in favor of further negotiations. That is because our economy is now in the 21st century, and we negotiated rule that were covering work governing a century economy. We did have access for audiovisual services. We did have intellectual property that covered digital data. We do have rules governing a whole host of things that now we need and should have. So i applaud the upgrade, but that doesnt mean that the foeement was not a real, wardlooking agreement at the time. Let me tell you we negotiated that agreement in 14 months. Uruguay round collapsed in 1991 with an four months of the north American Free trade agreement taking effect in 1994. All the ministers were back at the table and finished the uruguay round and created the wto. Why . Because nafta was the model they were following. Julie thank you so much for your time. Coming up, a total eclipse of the sun. We will tell you whose company trying to take advantage of the upcoming Solar Eclipse. This is bloomberg. Scarlet and officials of 13 are dead and more than 50 are injured and barcelona after a slammingd the sidewalk into pedestrians today. The police force said they arrested a man and is treating him as a terrorist. It is not clear if there are other suspects unaccounted for. Fall we are seeing stocks to their lows of the session. When the initial headlines crossed of what now seems to be we have beenttack, stocks initially fall off and then they subsequently are now making new lows. Some of the worst performers include airline stocks. American airlines is down by 5 . Delta down by nearly 4 . We are seeing pressure on these International Travel stocks. The nasdaq is down the worst of the three major averages, with the decline of 1. 4 . Only the worst decline since last thursday, when we saw that selloff. We will have much more on this coming up. Got you outnumbered. The dinosaurs extinction. Dont listen to them. Not appropriate. Now im mashing these potatoes with my stick of butter. Why dont you sit over here. Find your awesome with the Xfinity Stream app. Included with xfinity tv. More to stream to every screen. This is bloomberg markets. Commodity markets are closing in new york. The futures with starting for the Third Straight session. Global supply drives prices lower for week. Oil has been rising today, but it is trading near its lowest in rude hoveringc around 47 a barrel. We also had data on a saudi production. Strugglestay will to stay above 65 a barrel. Ld is notable today. Catching a bid after the attack in barcelona. Over the two days, it is up by nearly 1 . We had a little bit of lift for gold after the fed minutes yesterday. Bullish. Eyors are the longest run since march. Scarlet walmart is reporting thatdquarter reporting topped wall street estimates. Shares are down the most after more than one month. Is our us with more reporter who covers the Consumer Industries for us. Grocerypushed its best sales and five years. But to sustain the kind of growth, it needs to spend a lot of money going forward. Of there a lot is a lot of new competition coming into the space. It will be expanding to 400 stores. A germanbased chain is coming to the u. S. With all the new competition, it is a good sign for walmart that is coming into the fight with momentum. Julie especially the momentum with amazon and whole foods, but it is unclear what challenge that will present. When we say walmart is spending a lot of money, what is it doing . Is it a matter of keeping prices low . Andow it is order online pick up in stores, and that is a big push it has done. How is it targeting these competitors . Ofah it is investing a lot money and its infrastructure network. They are allowing them to fulfill orders faster and give them the Free Shipping that make them more competitive with amazon prime. Theyre doing things like if you buy online and pick up and or, get a discount. That makes a more profitable purchase for them. Theyre experimenting with tactics like that to make their Online Business stronger. Profit margins are a concern because of the spending, especially as walmart puts more emphasis on the ecommerce side. The Profit Margins are more narrow than the brickandmortar sales. Sarah that is right. It seems like theres following a bitter pill as they make these investments. They are swalling a bitter pill. If you are examining this gross margin and see what walmart is doing right or wrong, it will be seen five years down the road. Historically, they havent not they have not been terribly patient with how one or is spending money. They are not patient with them today. The shares are down. How much patience do think they will have for the tenyear vision . Sarah you are right that they are not showing a lot of patience today because they did guidance for the full year. It was just the thirdquarter guidance that wasnt where analysts thought it would be. It does seem like investors do not have the patience for them that they do for amazon. Im not sure that will change anytime soon and walmart starts showing some more longerterm progress. Julie thank you so much. Let us check the headlines for the bloomberg first word news. Mark an official in barcelona says 13 people are now confirmed dead, and more than 50 others injured in the van attack. Police force for the region says they arrested a man in the attack and are treating him as a terrorist. They announced the arrest on twitter. Callingrior minister is on residents to remain indoors and avoid unnecessary travel while the investigation continues. President trump has condemned on twittertack saying, the United States will do whatever is necessary to help. Another series of tweets another series of tweets, President Trumpin wrote about wrote, ith trump is sad to see the country getting ripped apart. Was notsaid he approving racial tensions. Issays that Lindsey Graham still bitter about losing to him in the primaries. Settling a lawsuit regarding the program on terrorists. They filed a suit on behalf of three men detained following the 9 11 attacks. One died of hypothermia after being shackled to the floor. They administered an experimental torture program. The United Nations envoy for the beginning of a real negotiation on the Syrian Crisis could come in october. Geneva, he said to you and is counting on russia, iran, and others to initiate genuine talks. Global news 24 hours a day. Powered by more than 2,700 journalists and analysts in more than 120 countries. Crumpton. This is bloomberg. Coming up, alibaba shares are trading at an alltime high after the ecommerce giant reported better than estimated earnings and revenue growth. The sox may have more room to run. From new york, this is bloomberg. Julie this is bloomberg markets. Scarlet it is time for the sector spider report. We are focusing on industrial companies. Oliver has the details. Great day is not a for the industrial sector. This was a group that did well in the trump on after november. Things so often. Were seeing things down around 0. 9 . Not helped by midday losses in airlines. I think there will be a little tying into concerns about trumps ties with Business Partners freighting frayiong. Fraying. I think this could be potentially problematic if no one wants to get on trumps side. Let us look at the airlines. Have all these companies doing poorly. They were already going down to start the day, but it didnt help when we had news of the incident in spain. Airlines often times lose on days like this when terrorism starts floating around the news. There was another announcement in escalona where they encourage barcelona where in barcelona where they encouraged people not to travel. This is anals, interesting what i like because it was the actual best winner in the Industrial Group since the november election. Hereu have one company that embodies the expectations for infrastructure from the white house, this is it. It is doing ok. It is on a pretty heavy volume. This is a company that rents out space and materials. They also just had a deal where to expand their space. Some positivity as theyre able to withstand all the negativities coming within the rest of the history the rest of the industry today. And the kindompany of expand their position in the industry. What else are you watching in terms of financials . Oliver here is what i like. This is critical because what i can see is the profitability. They have pretty strong margins. Look at the screen right here. 96th percentile in terms of their gross operating and trailing 12 months. The other thing i would point out is because the company has done well, you might think maybe it is overrun its true value. Look on the valuation side, it is pretty low to how it compares to some of its peers. 25th percentile on a trailing 12 month earnings per share. I think there is space you were investors are not quite as quick three julie wek. Isie another mover alibaba. They topped earnings and sales estimates. Marketplacechinese rose 66 last quarter. Vonnie spoke to the managing director. He has a buy rating on alibaba. They started by asking for his reaction to todays results. My oneword takeaway is affirmation. We have been looking at trends in the chinese consumption environment. Alibabas position is very strong. They have been seeing very notable improvements. Combined with good volume growth and operating environments, the product of those is the result we sold today. The affirmation is my initial take away. What about the Cloud Computing . Because thats it below triple digit growth for the first time in several quarters. Is that a concern to you . No. They are in a Market Development phase. I think the offset is the number of paying customer conditions was by far a record. Objective is to win the land grab. They are doing that. They have had some aggressive pricing actions over the last couple of orders that deflate the top line growth. As long as theyre successful in getting the early adopters on their cloud, they are positioned to win. Harry and not doing so well is entertainment. Area not doing so well is entertainment. Can they fix that . Rob they have tried to in the space. They acquired an entertainment business last year and really started to break it down and reform it and integrate it thoroughly throughout the alibaba ecosystem. It is a work in progress. They have been clear to position a matterround time as of years, not quarters or months. They are doing what they think they need to do in terms of growing audience. The advertising revenue has decelerated because they defocused that part of the business. View one a longterm the investments they make. Vonnie it is also putting money into brick and mortar stores. It is recognizing the big retailers in the you have to have some kind of brick and mortar presence. More than 80 of purchases are done by hand. Rob unlike the amazon acquisition of whole foods, this is less about an infrastructure investment. Amazon is clearly interested in whole foods for its space and affluent markets and the extension of their logistic infrastructure. Alibabas model is very different. I think their acquisition of in ame retail, this is more of largescale experiment to understand how they can extend their value to the brick and mortar retailers. I do not envision the making a big asset play or further asset order tot in understand the complexity of the hybrid model offline to online, owning it is probably a more strategic position to fully learn how to do it properly. That was Rob Sanderson speaking earlier today. It is time for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. A company agreed to buy an asian unit. It will pay 1. 7 billion, mostly in cash. Yunfeng is reaching out to regular investors to help manage money. The block chain revolution could for school to go digital. Bitcoin isers for drawing investors. Companies are rolling out similar platforms. About 27 billion in gold is trading each day. A federal lawsuit accuses goldman sachs, jpmorgan, and for other banks of colluding to market. The 1 trillion loananks typically stocks to people looking to short sell. That is your business flash update. Ciscos turnaround taking the spotlight. The ceo says the company has made Good Progress in reinventing itself. From new york, this is bloomberg. Scarlet this is bloomberg markets. Shares of cisco falling after they predicted another revenue decline as it reinvents itself. The ceo talk about the progress and the companys makeover earlier today. We said we will shift more of our business to a subscription model, and we made unbelievable process. 31 of our revenues were from recurring, which was up four points from the prior year. We have our software deferred that grew 50 and eclipsed 5 billion for the first time. Two quarters ago, i said it eclipsed 4 billion for the first time. That is moving rapidly. Of our Software Business, 51 of our Software Business is from subscriptions. We have made a great deal of progress. I think the strategy we laid out is working. I am comfortable and pleased with what our team has accomplished. I am a longterm investor in cisco. I believe in you. I want you to succeed. What are you telling me to look at to know i am certain it will turn around. What is on the dashboard to say, i know it is working or maybe it isnt working . We provided some new metrics that indicate this transition is working. Metrics like this recurring of our, the size Software Business. If you look at our actual Software Business and use stack of against traditional companies, you might be surprised about how big it is. Looking at the software balance and the percentage of our software, we provided a lot of metrics we are reporting now on a quarterly basis to help you feel better about it. At the same time, we are executing on our financial weels and last fiscal year, had record cash flows, record earnings per share. We are executing on the financial side of it while were going through this transition. Many american ceos distanced themselves from the president of the United States after comments he made following ugly rallies. As you see it, is this an administration you can still work with . First of all, hello, jonathan. The events of this past weekend, it isand foremost, frankly incomprehensible we are in 2017 and having these discussions. I think most of america and abhors racism,y doesnt stand for it, doesnt stand for neonazis, white discrimination and any way, shape, or form. We communicated that clearly with our employees as we have gone through this great the second thing is we still have a lot to do in this country. We still need to drive gdp growth. We have other regions of the world that are beginning to grow faster than we are here, which is great that they are growing, but we should be growing faster than the United States. We need job creation and tax reform. Regardless of what is going on, we cannot advocate the need to get those things done. From a country perspective, we have to find a way, and our leaders have to find a way, to that more on the things unite this country. The things that have made us onat and not focus every day our differences of opinion and the things that divide us. I think that is what is most important. I think it is incumbent upon the Business Leaders to continue to the things the country needs to be successful and to make sure we are playing a role in making that happen. Julie that was chuck robbins. Total eclipse of the sun. Parts of the u. S. Will plunge into darkness and we will plunge into many puns as the Solar Eclipse ascends upon the country. Oregonoing from sailing, to South Carolina. Homeowners are finding ways to cash in. Joining us is olivia zaleski. She is not likely to have a great view of the of clicks neither are we here in new york city. It will be a partial eclipse. Is seeing a surge in listing along the route of the eclipse. 50,000 people are expected to check into an airbnb, which is exciting or check into an airbnb on the path of totality, which is the 70 mile narrow strip. It is exciting for the company because 47 of these listings are brandnew users for airbnb. This is a unique opportunity an offense that has brought in a lot of people who wouldnt otherwise have a reason to list their home on an airbnb, perhaps because their town isnt really a tourist destination. Just their homes, single rooms, patches of grass, recreational vehicle and people are trying to get everything out there possible. Theyre posting a sweepstakes contest linked to the eclipse. Olivia patches of grass have been very popular. Going going up t for 150. In some one motel 6 towns, that is going for about 330 a night. And airbnb is costing an average of about 120 a night. And thethese people smaller towns are seeing an opportunity to make a little bit of money and show off their town. Olivia zaleski will be watching the partial eclipse through her glasses. These are courtesy of google. A lot of laces that seldom are sold out. Put them on. You keep making the puppies on. Because i like it. Total eclipse of the heart singer bonnie tyler will be singing on a cruise that is on the path of totality. Track your pack. Set a curfew, or two. Make dinnertime device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. Introducing xfinity xfi. Amazing speed, coverage and control. Change the way you wifi. Xfinity. The future of awesome. 3 00 p. M. In new york, 12 00 p. M. In San Francisco. I am julie hyman. Scarlet i am scarlet fu. Welcome to bloomberg markets. We are live at bloomberg World Headquarters in new york. Here are the top stories we are covering on the bloomberg and around the world. The latest developments in the terror attack in barcelona. At least 13 people are dead and dozens were injured after a fan out into a crowd at one of the van plowed into a crowd at one of the citys most popular tourist districts. Inflation is not the only thing economists are watching. The future of leadership at the central bank could affect monetary policy. And bill akins comeback call is on shaky ground right now. We are one hour from the close of trading. Lets get a check on markets with taylor riggs. It looks like we are hovering around the lows of the session. We are. Losses around 1. 1 . Airlines index is down about 3. 4 . As julie was mentioning, headlines from barcelona confirming that it was indeed a terrorist attack. I want to look at some of the travel stocks. I will highlight united to start. Down almost 3 , having its lowest day since november. We have been noting a few key statistics. Spains economy does come from the travel sector. There are some other fundamentals going on when it comes to some of these airline stocks. Morgan stanley this morning lowered their price target and earnings per share on average. That guidance for 2018 by about higheron revenue and fuel costs. Perhaps the accommodation of all of those weighing on travel stocks. Another big story we are watching his earnings. I am going to touch on cisco. It is down 4. 4 . They are continuing to shift from hardware to be a software company. Revenue is a little bit lower. You take out the cost of goods sold and you have a gross margin of 64 , missed on estimates on that. The memory chip is getting pretty pricey. The Bargaining Power of suppliers is weighing in on costs. Analysts at callan and piper jaffe see a yield of 3. 6 as good. Better than microsoft and oracle. Overseas they have net cash. If we ever get tax reform in the u. S. , we will see how that works out for cisco. Finally, we are talking about earnings season. Here andep on over walk you left to right through the chart. Quarter season in every over the last five. I will start with the election. Every quarter since then, starting to see some gains as we close out earnings season. Of course, the election, we had a big rally. , samequarter of 2017 thing. We see a little bit of a jump. Same thing with the Second Quarter and then the third quarter. As we know, its the longterm that matters. Julie love it. Taylor. Thank you, it took more than three hours and 100 67 slides, the bill ackman made a presentation on data processing. That the market is too assessed with margins. We believe there is so much focus on believing step on achieving steady, upward margins, that we are missing the big picture. So far, investors are not buying his vision. Shares slipping to their lowest since july. Adp released a response in the past hour saying scarlet joining us now is scott e, who covers activist investing. I read an analysis of bill ackmans presentation, and the just was it was long on problems, short on fixes. I dont know if that is entirely true. He went through a very detailed, three and a half hour presentation. Essentially, what he said was this is a Payroll Company that has tacked on technology. Through acquisition. And they havent actually integrated those into one platform in infrastructure. The suggestion is perhaps that is the way forward. Scarlet one thing that struck me that i think has been perhaps , youed out in your stories can look at the Performance Chart of the company under the current eeo, carlos rodriguez. 19 total return ceo, carlos rodriguez. 19 total return since 2011. Activists are going into Companies Like procter gamble, which is essentially a good company, and the argument they are making is yes, this is a good company, but it could be a better company. So, as bill ackman said today, he said the company is actually 255 a share, not the 105 it is trading at today. Julie and the reaction is shares are falling. Immediate reaction, investors are not buying what he is selling. Also, he is getting criticism from his peers. To get thathe tends criticism. He has a combative relationship with some on wall street. Has comeanybody who out on his side, whether other folks on wall street or analyst who say, you know, he is right about what we should be doing . Vercorp core put out e co put outnote ever ar note saying hep might be right. Generally, the consensus is there is room for improvement. I am saying there is some kind of consensus that perhaps margins could make that possible. Scarlet having said that, you whoed someone in your story said his presentation makes its how my keyword short the stock. He has created a problem and now makes it sound like he would short the stock. He has created a problem and now he needs to create a fix. That he still has money he is managing that is outside money. I guess he needs a win here. That is clear. He lost 4 billion, but he needs a win here, and thats important. I think the stock reacted in the way it did today because they are not entirely convinced this is the way forward or that he can impact the company in the way he wants to. He definitely needs a win on this one. Scarlet it seems like he has a long time frame, doubling the stock price in four years. Two activists have do activists have that much patience . The initial investment was. Ade in the fall of 2011 proxy was in 2012. The turnaround took quite a lot of time. We are not talking quick fixes. He is not talking about levering the company or Something Like this. This is a dramatic transformation of the way the company works. Julie he brought up canadian pacific. There was skepticism about that working out. Up when you look at his historical activist campaign, what management initially resisted and then came around adp management has been very vocal and derogatory when describing him. Any time someone tells you you are doing a bad job, you are going to be hostile. Of adprodriguez, the ceo went on nbc and called him a spoiled brat and a used car salesman. , he told himenes he thought maybe he needed to be replaced. Last week, he went on tv and started berating him. Now he says it is time for a new ceo. I think its true that obviously someone doesnt want to have somebody come in and tell them they are doing a bad job. Thats a pretty normal reaction for anybody, i would think. Julie fair enough. Nobody likes to be insulted. Appreciate it. Lets get a check on headlines with Mark Crumpton. Mark thank you. Authorities in barcelona now say 13 people are dead, more than 50 others injured after todays van attack on pedestrians in the historic las ramblas district. President trump condemned the and during atter, News Conference with visiting japanese officials, secretary of state Rex Tillerson said the u. S. Is ready to help spain in any way necessary. Around the world should know that the United States and our allies are resolved to find you and bring you to justice. Spain, authorities are looking for a second suspect. Officials have closed roads leading out of barcelona. Top economicmps adviser will stay in his position of according to a white house official. Garyn was set to be upset overid to be the president s remarks about charlottesville, virginia. Speaker paulwants ryan to join democrats in supporting legislation to remove confederate statues. New jersey democratic senator cory booker said he will sponsor legislation to have them removed. Russia warns that a military response to tensions on the Korean Peninsula will lead to a colossal tragedy. The foreign minister said moscow is calling for all parties to show restraint. He said any attempt at a military solution will lead to huge cashel tees humanitarian, economic, and environmental huge casualties humanitarian, economic, and environmental catastrophe. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. Am Mark Crumpton this is bloomberg. We will hearng up, from former fed governor randy crawford. Julie breaking news. Senator bob corker has become the first senior gop senator to question confidence in donald trump. Corker is a senator from tennessee. A video posted to facebook, the tosident has not yet unable demonstrate the stability or confidence he needs to demonstrate in order to be successful and we need him to be all. There certainly to be successful. There certainly have been other senators and members of congress who have talked about trump positions and behavior. Although, most of those who commented on his recent reaction to charlottesville did not call out the president specifically, but spoken more general terms about the need to combat racism and to be more tolerant. Scarlet exactly. This is the first time we have seen a senator of this standing donald trump specifically and question his competence. We will keep you posted on any further headlines. Is the on uncertainties next policy move from the fed. Inflation is in retreat. Committee members are keeping the door open on the timing of Balance Sheet reductions. We spoke to a university of theago professor and asked former fed governor whether the fed will be forced to change its timetable. I think they are still likely to announce something on the timing of the Balance Sheet reduction. I think they want to do that. I think there is a reasonable chance they could delay beyond september because inflation has been running lower than they had asked acted, so revenue continued to move up toward the , so revenuepected continued to move up toward the 2 goal. That is true in the u. S. And other countries. I dont think we can make too much about the fact that these minutes seem to ask more questions than they answered. Are they facing a crisis of confidence . Crisis ofnt say confidence, but they are much less certain they are on a path to the 2 inflation goal. Butad a few rate increases, i think there is a little more wariness, and now they are also going to start the reduction of the Balance Sheet. I think they probably will be a little bit cautious because they are afraid of the onetwo punch that could move things more than they expect. We keep talking about the phillips curve and why wage growth is not responding to low unemployment. Fact that inflation is there but the fed is looking at the wrong thing . I think its hard to see a lot of inflation whether you differentges, measures of inflation, i just dont see it being there. I dont think its a measurement problem theyre having. I think its just a bit of a surprise because there has been so little inflation that has been the tradition. That is one of the things they need to come to grips with. If we can also just get your reaction to some tweets we have seen. I will read you some of them. I believe we have a graphic. That President Trump should reappoint janet yellen to he also says, but i am lucky enough to know janet yellen well, and i know that her vision for america is highly to from that of trumps that of trump. Chair job fromed him would send a signal that she would regret and possibly deeply. Do you agree . The first part. I know janet yellen well also. Wasrked with her when she the head of the San Francisco fed during the financial crisis. I have deep respect for janet yellen. We just really dont know, going forward, exactly what will happen. Ad i think the fed has reasonable amount of independence from the white house, so i would hope that the fed can maintain that, and whoever might be the fed chair can operate reasonably independently of the administration, as has been the tradition for the feds history. One person in the Leadership Committee said a rate hike would strike an appropriate balance. Is this unusual . It sounds like it could be the fed chair or her haps emmy fisher perhaps stanley fischer. I think it will depend on how the economy involved evolves. Financial uncertainty and political uncertainty. The u. S. Economy seems to move along at about 2 no matter what happens. We have had a lot of shocks, and we will have to see what happens with inflation. We expected inflation to be moving up more than it is. To gocontinues to start down, that will probably delay the next hike. Is the curve broken . Certainly, the president thinks its going to work. To keepwe are going creating jobs and wages are going to increase. Are they . They havent until now. Jackson hole meeting is coming up next week. Wasle of years ago, that the big question, is the phillips curve broken or are we going to go back to our normal relationship . Unfortunately, we didnt get a definitive answer. Notes, see that in the in the minutes. Wehink one of the reasons havent seen inflation move up is that the broader picture of unemployment is that its been so much higher than typical. Now the traditional measures and the broader measures, that include people who are parttime but want to be fulltime, people who havent looked for a job but do want to look for a job, that spread is going to come down. We are going to see that spread come down moving forward, but not as much as we have in the past. Julie we have more to balance in this breaking news from spain. Two suspects have now been we have more developments in this breaking news from spain. Two suspects have now been arrested in the attack that left 13 people dead. Spain have called the incident a terror attack and now to have been arrested two have been arrested. 13 People Killed and at least 50 injured. We will bring you developments as we get them. From new york, this is bloomberg. This is bloomberg markets, im scarlet fu. For todaysng me action insight, steve, i want to talk about a chart i brought up earlier today on bloomberg. The s p 500 is falling today. More people are buying protection. Calle looking at the put ratio for the s p 500. The higher it gets, the more people are buying downside protection. The yellow line is the index itself. It has a spike we have seen before. It still continues to go up. I wonder if there is any Predictive Power at all in looking at the put call ratio. I think the put call ratio is informative, but not necessarily protective. There are certain times you can look at it and go wow, the put call ratio made a great call on the market. Noother times, it has bearings on things. However, the chart you showed was very instructive in terms of are seeing in the market. A lot of times, heavy put activity is more speculative. Times, people might be using puts to protect larger ,ieces of the portfolio significant Stock Holdings or the outright portfolio itself. Do you think thats a strategy that makes sense . I am a believer in keeping one eye on hedging. Todayis a relentlessness, notwithstanding, and the low volatility levels, i think, is not a prudent strategy. We have seen that with some of the large trades you highlighted. Those are probably large institutions hedging significant pieces of their portfolio, not necessarily speculating on the downside. Brought up, and you a potential strategy today as a way of doing that. Talk to me about this trade and why it is a good way to hedge. The way the trade works is this is for someone who was a little worried that in the next month or so when there is a lot events coming down the pipe, if you are worried about a 10 correction, what do you do . You dont necessarily take 10 where you get to a point it is worthless. You want a little more protection. Case, lets say 5 down, that skew is getting very high. The applied volatility is maybe five clicks higher than the money volatility. Thee go further out of money put, more toward what your downside would he. That puts a lid on your downside, but if youre not looking to be speculative, if you are looking to hedge, this is the type of structure someone would use. You defray the costs. Julie thank you so much. Scarlet . Ahead, another retailer will have its moment of truth. Progress on the gap turnaround plan. We have a full report. Got you outnumbered. The dinosaurs extinction. Dont listen to them. Not appropriate. Now im mashing these potatoes with my stick of butter. Why dont you sit over here. Find your awesome with the Xfinity Stream app. Included with xfinity tv. More to stream to every screen. Crumpton. Mark it is time for first word news. Officials say a second suspect has been arrested in todays deadly van attack on pedestrians in barcelonas historic district. Todays attack, which killed 13 and injured more than 50, is being treated as an act of terror. President trump has condemned the incident on twitter, saying the u. S. Will do whatever is necessary to help. Tennessee republican senator bob corker has delivered his harshest criticism yet of President Trump, telling reporters in chattanooga today that the president has not shown the confidence needed to lead the nation. Senator corker warned that the nation is going to go through great peril and that there needs to be some radical changes at the white house. Separately, republican senator tim scott of South Carolina tells vice news that President Trumps Mall Authority is compromised. The white house as it is working to find a convenient time for the president to speak with a family of the 32yearold woman who was killed while protesting that white nationalists rally last weekend in charlottesville, virginia. Spokeswoman lindsay