Losing streak since june has been snapped. Groupll see every single on the 500 index has gained today. Osp to see what m is going on in stocks. You can see the gainers. I will change it over to names. Wells fargo, j. P. Morgan, Berkshire Hathaway all big gainers today. Financials leading the way. As far as the losers, big names. Allergan, biogen, amgen. Im pulling out pharmaceutical and health care names on the losing side. Joe in the Government Bond market, we see a selloff in South African bonds. That is one country lets look at the u. S. First. Lower yields across the board. We see a particularly sharp drop on the 10 year yield. The fact that the u. S. Twoyear dropping less than the 10 year indicating a flattening. Friday after the fed comments, we saw yields up. Today a reversal. Lets look at a onemonth chart of South African bonds. That is interesting. Growing anxiety about the finance ministry and power situation has seen a sharp jump in the last week. Chandra im looking at currencies starting with the dollar. We have seen the index hit a two week high today. We are pretty much unchanged at the moment. You can see the dollar over the past two days. Friday see the spike on after stan fisher spoke following Janet Yellens speech. You can see it up. 9 over two days. I want to look at the yen. We are seeing a stronger dollar. Theyen weakening against dollar for a fourth day after bank of japan governor kuroda reiterated his readiness to ease monetary policy. Eye on the real as well, it is the bestperforming emergingmarket currency against the dollar today. Up 1 . On the commodities front, lets check out gold which has been on a losing streak lately. If we look at a chart over the last month, here is a oneyear chart. Weve had a big rally since december. But we have topped out lately. We have not made a new high in a while. Over the last month, a bit of a losing streak. Gold having a sevenday losing streak. After a torrid start, gold is fading. Matt those are the market minutes we are looking at. We want to get into the deep dives and take a look into the bloomberg. I want to show you the functions you can pull up by looking, for me it is the bottom righthand corner. For you, the bottom lefthand corner of your screen. I have one on oil which i think is great. The economist at Bloomberg Intelligence sent me this. You see the different opec countries and their production going back to the 1990s. Only the white line, which is saudi arabia, the orange line which is a rock in iraq, and the blue line which is a run, have made significant jumps up. Iran coming back to normal. Iraq is the beginner among the opec countries. You can see all of the different market shares there. You saw it for a brief moment. It is interesting to look at the breakup of the opec countries. Joe definitely. Im looking at the correlation between two e. T. F. And i think it says a lot about what is going on in the market now. The correlation between the sb tlt. D. His is a 90day correlation they are the most positively correlated in five years. When everything is correlated together like this, it has lots of implications for the market. It makes it hard to diversify when bonds and stocks are doing the same thing. You get no diversification in your portfolio. It shows the importance of the fed. Today we saw bonds and stocks rally at the same time. Friday we saw bonds and stocks sell off significantly at the same time. In thee only variable market seems to be the timing of the fed, you get Everything Else rallying or declining at the same time. We are going to keep an eye on that correlation. Chandra by chart shows a division between wall street and main street. It is not the first time this has happened. I thought it was interesting because it is looking at volatility. We have the calmest stock market in five decades. The on the surface, we are seeing a to virgins in sentiment beyond the surface, we are seeing a divergence in sentiment. Individuals are loading up on protected options and equity funds. We have the white line rising. This amounts to a stock market short on the part of retail investors. If we look at the blue line, these are the features positions features futures positions. Smaller investors are embracing them. Interesting to see this divergence or smart money is going towards the vix stock market. Matt we have to use the bunny ears when we say smart money. Chandra they got it right the last time this happened in 2015. Joe lets dig into the trends in the equity markets as in investors snap of dividends, stocks are pushing higher currently above the 10month moving average. Are stocks getting too expensive . Joining us now is meb faber. Thank you for joining us. U. S. Stocks are still very close to alltime highs. Can they keep pushing higher . Have the valuations gotten too much . The world looks a lot like the way it has been the last seat of times ive been on the show, so great to be back. Still expensive. They are the second best of four environments to be in which is expensive and going up. That is ok. The rest of the world, wheezing equities in particular, looks much better. A lot of the investments we talked about, emerging markets and foreign markets in general, usually the really cheap stuff, brazil equity markets up about 60 this year. The russian market up about 25 . We think that is a much better place to be than u. S. Stocks. Joe i have this chart on my bloomberg. The emerging markets e. T. F. Versus the spy. You can see it underperformed for years but has been picking up lately. Still it has hardly recouped any of the relative losses since the peak in 2010. Do you see overall emerging markets having much further to run relative to u. S. Equities . The end of the year was this perfect one side with many years of underperformance coincide with many years of underperformance. Finally got to cheap valuations. Nobody wants them. That sets the stage for future bull markets. They only outperform each other about half the time. The u. S. Has been crushing everyone else since the Global Financial crisis. You are starting to see the shift right around january. Foreign markets started to take leadership, particularly emerging markets. Some of the European Countries are still laggards. Italy, greece, spain. We think many more years of outperformance, doubledigit returns in emerging markets in particular and low signal digits for the u. S. Matt we do have breaking news coming across the terminal, which is kind of a big deal. It said it is no longer pursuing a combination with hershey. It says it is disappointed with the outcome but citing recent holder developments at hershey. It says there is no actionable path forward. It is going to continue executive plans to boost shareholder value, probably a good idea since that is the main job. This says they are no longer pursuing a combination with hershey. Very interesting news out of mondoelez. Hours, we sawfter a big spike and a recovery. Not a lot of movement in shares. Joe plunging over 8 right now on the news. Obviously, the loss of a potential acquirer hitting their shares. Matt exactly what you would expect. Ofre are not a ton shares traded after hours in hershey. You can see the contracts and how many are traded right now. Very interesting news. We will continue to monitor it. I will ask you about the u. S. Consumer. We are talking about consumer stocks. Ut right here. Ro what do you think about the fact the u. S. Consumer seems to be , kind ofnning on empty out of gas almost. In los angeles, housing prices look like 2008 never happened. This is the thing you start to see in the bull market in year seven or eight where returns are getting to the point where the sentiment is starting to get high again. People in general, Consumer Discretionary stocks for example really expensive. A lot of the consumer focused because of the search for yield, people pushing the yields down. A lot of these consumer stocks is a terrible place to be. Want to get away from those and run as quick as possible. Chandra i showed a chart genceer on the diverse with Institutional Investors bailing out while smaller investors have been embracing them. They have been shorting the stock market. Who is right . Institutional investors often behave as poorly as individuals. They use a lot more rigorous terms for it, but they make a lot of the same mistakes. Building a global portfolio, there are a lot of things you want to include. You want to get rid of home country bias. That happens not just in the u. S. But in every country around the world. Every country investor puts too much in their own stocks. Building a portfolio, you have to have a global approach. Not just with equities but bonds as well. With volatility, you have real assets. You need exposure to inflation if and when it happens again. We have not seen it forever in the u. S. We have seen it in countries around the world. When you have that global portfolio, you can do other things. You can tilt toward value and momentum. You can add diversified is at a long volatility product we think is one of the best that very few go to. Joe youre going to stick around. We will talk about College Endowments and what investors can learn by mimicking the strategies of harvard, yale, and other top schools like stanford. Matt probably yell more than harvard probably yale more than harvard. To recap the developing story. Mondelez says it is no longer pursuing a takeover of hershey. The c. E. O. In a statement says following discussions and taking into account recent shareholder developments at hershey, we determined there is no actionable path forward. After hours shares in hershey falling 10 . This is bloomberg. Mark it is time for your first word news. Donald trump is set to deliver his immigration policy on wednesday. He plans to focus on deporting criminals. That is similar to the strategy of the obama administration. The president has often been referred to by immigration groups as the to porter de porter in chief. Hasobama administration removed more than 2. 5 Million People through immigration orders. Hillary clinton has an edge in michigan and pennsylvania but they are deadlocked in ohio. Clinton leads trump 4540 in michigan and 4643 in pennsylvania. They are tied at 43 in ohio. The Libertarian Party candidate has 10 in ohio and 7 in pennsylvania and michigan. Orlandos major theme parks are offering free bug repellent as concerns about the zika melt in florida. Walt disney world, universal resort, and Seaworld Orlando began offering the mosquito spray and lotion free of charge. Mosquito transmitted case has been found in central florida. The Justice Department will decide by next month if it will seek to prosecute the former Virginia Governor for corruption. In june, the Supreme Court in a unanimous decision tossed his conviction. The ruling left open the possibility for him to be retried. Gene wilder is dead. His nephew told variety magazine the actor and writer died earlier this month in stamford, connecticut, from complications from alzheimers. Therred in producers and stir crazy. He was nominated twice for an oscar. Gene wilder was 83 years old. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Matt we have breaking news from american airlines. Its president will leave effective immediately. American air concluded they would not be able to retain their executive team so they kirbya new president and will be leaving effective immediately. Joe whatd you miss . More colleges and universities are outsourcing management of endowments as they try to lower expenses and increase returns. Back with us is meb faber. Therote an entire book, ivy portfolio. What do you make of this wall street attempting to get in on the endowment business, companies trying to outsource their endowments to wall street . What do you make of this trend and what are the top endowments you have followed for so long doing now . Typically, we start with harvard and yeah. Endowments,argest there are things they do great and things they dont do great. They do a true global perspective on allocations. Not just u. S. Assets but foreign assets as well. They have a heavy allocation to equity like assets. They have a chunk in real assets like commodities. They also target active management when appropriate so it gives you a diversified portfolio. The things they dont do well is it is typically an aggressive portfolio for individuals and institutions. Those endowments probably lost 50 if not more in the 2000 a pair market. 2008 bear market. That is how much they would have declined. In my opinion, they dont offer to trends. Sure many investors can get endowment exposure now. In e. T. F. That gives you access to over 30,000 securities around the world. Announced that we now management fort individual accounts for a 0 Management Fee across 13 if yes that looks a lot like this portfolio. You can turn the dial up or down for people that cannot handle the large endowments and liquidity issues of a traditional endowment. I wanted to point out we which great function allows you to get deep information about College Endowments. Obviously, harvard is the biggest. The oneyour return is poor at 5. 8 . Over 10 years, they are up 7. 86 . Yale stomps them over the last year and 10 years. When i think about College Endowments, i think about alternative investments did they kind of pioneered dumping into alternative investments. Do you think they did that well and have now gone off the rails . Alternativesook at and say lets go back 60 years ago when harvard was doing timber or people were early to Asset Classes, one of the best thing yale did was it started allocating two smallcap managers 30 years ago when that was less efficient. There are 10,000 hedge funds today so that game is harder. You are seeing move into Asset Classes that are not traditional that individual investors need exposure to. Harvard has been struggling. I think it is going to be incredibly difficult for many of these endowments to outperform a basic 0 fee benchmark like ours going forward. That is going to be tough to do. Joe meb faber, thank you very much as always for joining us. Chandra you are watching whatd you miss . A conversation you dont want to miss tomorrow with stanley fischer, vice chairman of the federal reserve. He sits down the tom keene at 6 30 a. M. Eastern on television and radio. This is bloomberg. Chandra you are watching whatd you miss . Time for another deep dive into the bloomberg. Lets start with a chart on the carry trade. This is when investors borrow in groups of 10 currencies with Group Interest rates and use it to buy higher yields. This is on pace for its biggest annual gain since 2012. This chart shows the Deutsche Bank carry trade index. I thought this was an interesting want to show given the environment of low yields we have and the constant hunt for yield we keep talking about. The carry trade is one of the strategies. Another one that has been rallying is the evaluation and momentum trades. This carry trade in particular interesting because you have some currencies rallying even when their Central Banks ease. Joe another strategy that has done well lately, risk parody funds which go along equities and treasuries at the same time. That is the redline going back to the beginning of the year, having a good year. Fridayto highlight because you see the decline. That was one of the worst days all year for the strategy after the comments at jackson hole. It shows the susceptibility of the strategy to perceptions of tightening. If the strategy does really well and people think tightening is a long way off, but on days when people have to ratchet up expectations of a fed hike, you see selloff across Asset Classes and the strategy does not do as well. Matt very interesting chart. Very cool. Ian suspended brazil president tells the senate removing her from office would be a death sentence. Well her emotional appeal to lawmakers sway any votes . This is bloomberg. Mark i am mark crumpton. Donald trump is praising the decision of Hillary Clintons top aide to separate from her husband, former new york congressman anthony weiner. Trump is blasting clinton in the coulds claiming weiner have endangered National Security in allowing him close proximity to highly classified information. Wienerred no evidence had access to such material. Sandy hook reopened after the shooting rampage that killed 20 children and six educators. Students returned to a 50 million replacement of the school on the same property in newtown, connecticut. North korea calls the u. N. Security Council Statement strongly condemning the latest Ballistic Missiles a hostile act coppe perpetrated by the u. S. The Foreign Ministry accused the u. S. Of instigating the statement to deter the countrys legitimate right to selfdefense. More than 35,000 people died in u. S. Traffic crashes last year. The more than 7 spike was the largest single year increase in 20 years according to the national highway Traffic Safety administration. Increase ends a five decade trend of declines in traffic fatalities. Officials attribute the rise to more drivers on the road. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. One stock moving in late trading is hershey after mondelez says it is no longer pursuing its combination with hershey. You can see the stock down 11. 5 after hours. Mondelez says it is disappointed with the outcome and there is no actionable path forward. Hammond ed at hammond who has been tracking the deal. Why did it fall apart . It never really got going. When it became public, hershey was immediately rejecting of the offer. There has not been much engagement over the summer. Before this went public couple of months ago, they had been talking behind the scenes. Believed theyelez were potentially open to a deal. Matt now they dont believe that. I was looking back to see what kind of shareholder activity could have led to this change. I saw that hershey is controlled by this trust that was under fire for lavish spending. There was an investigation. They promised to do better. Story with the owners of hershey . Rip gene wilder indeed. Fitting this news would come on the same day. Hershey has a normal Corporate Board as every company does. But it also has a trust charged with looking after the interests of hershey the town. They get the ultimate call on whether or not this company gets. Sold even if the board approved the deal, it is up to the to decide if the board made the right decision. It never made it that far. Matt mondelez would have to make it very appealing to the people to whom the trust reports for the trust to think about it because they represent the town in pennsylvania. An amorphous concept on which interest they are serving. There has been a lot of criticism because the trust is often under fire for apparently serving their own self interest, spending lots of money on their own activities, not necessarily best for the bigger concept of what is in the best interest of the town of hershey. What happens next four mondelez . Will they look at other acquisitions . I think they will look at other acquisitions. They are also seen as a target so it is possible someone bigger and better will go after them. This deal im sure was motivated for strategic reasons. There has been whispering since it became public that they potentially were doing a defensive move. Ed hammond, thank you very much indeed. Matt lets get a quick recap of todays market action. Stocks showed gains today. The biggest gain for the s p 500 since august for. Joe, the biggest gain in a month. 5 . Joe that is a remarkable fact. I think we are on 35 straight days. Is 36. Think it i have a chart Abigail Doolittle has been shown today. It shows you this range. A 1 orhas not moved to greater range in 36 days. The range is broadening so we are getting there. But it has not moved out. Do you want to show the chart i have . Joe there it is. That is a gorgeous chart. Whatd you miss . The impeachment trial of brazils bended president is entering suspended president is entering its final phases. Commit anye did not crime calling her impeachment a political death penalty. Twice, i came close to death. Once when for days i was that made me doubt humanity and life itself. When a serious illness almost made my life shorter. Today i am concerned about the death of democracy. In julia leiteg for the latest. Dramatic stuff. Does she have any political life at all or is this a done deal . This is seen as a done deal. Most of the newspaper polls have around 52 senators voting for impeachment and 10 undecided. They only need 54 to impeach. This is seen by her allies as a done deal. Shes going to be impeached this week. Joe it does not have to be a death sentence. One of the senators who will be voting himself was a brazilian president who was impeached. Her career could go on. That is right. 1992 and washed in out of the political sphere for. Ight years he has been back. He is a senator. He spoke on the first Impeachment Vote and is voting this week as well. Gainshave seen stunning in the runup to this. Is this optimism in the stock market because of the possibility of her going or is actual future bets on brazils economy . We hear both things. We also hear commodities rally and low Interest Rates abroad. There is a large portion of investors that still say whatever comes after will be better. They will have trouble passing reforms even though there is a lot of optimism he will manage to get some done. Investors know it is difficult. Brazil has a difficult political system. We have over 30 parties so there is a lot of negotiating that needs to go on. Joe i want to expand on that question further. And isg she is impeached officially removed from office, does that aid in the process of political reform at all . Is that on a totally separate track with its own dynamics . The hope is it will make give him a more legitimate government and more sway in negotiations. Political reform proposals have been put aside for the time being. We are talking mostly about pension reform, Social Security reform, tax reform. Some talk about labor law reform. Political reform is likely to be even more complicated and is not on the table right now. Matt when is the last time we are going to hear about this . The last time youre going to have to report on her for at least eight years . That is hard to know. This week, we will be reporting on her a lot. She could appeal. This could go on for a while. We will see what she decides to do. Matt maybe a bit of a neverending story. But one that we love following. Thank you so much. Matt still ahead in our own political saga, Hillary Clinton is worrying some democrats by trying to separate donald trump from his party. Are they truly two different entities . We got to washington next. This is bloomberg. Joe whatd you miss . Hillary clinton is trying to get Republican Voters to ditch donald trump are linking him to by linking him to others outside the mainstream of the republican party. Ourmore, lets bring in guest. Is she saying this is not a typical republican and something much worse . She is trying to win over a lot of independents and republicans who not sure about donald trump by basically painting him as someone way outside the mainstream. Not a conservative. Not a republican. Giving him wiggle room to say theyre not going to vote for the nominee because in her view, he is not a mainstream republican. It is a way to reach out to constituencies that normally would not consider voting for her. But because he is such an incendiary candidate, some are considering not voting for him. Joe one of the criticisms of this strategy is you guys have been accusing us of being racist and sexist and bigots for years. So why should we listen to you when you say this about donald trump . Have the democrats created a problem . There was a specific attack on pop krugman paul krugman. Is the bar high for Hillary Clinton to say really, this is on a level we have not seen before from previous candidates . That is right. Not only is the bar high, the democrats are running for seats in congress and are not completely on board with Hillary Clintons strategy because they want to tie their opponents to donald trump and say he is very much a firebrand that represents the republican party. They want to link these people in congress who are struggling in tight races, they want to make it very clear that all trump represents the republican party. A thorny strategy for Hillary Clinton but something she thinks she needs to do to win the presidency. Speaking of trump, we heard more from him about his immigration views today. Tell us more about that. It was just kind of one meaningful change and it related to the mass deportation aspect. Expecting to hear much more from donald trump on wednesday where he says he will lay out a major speech about illegal immigration. For the last few days, we have been seeing a lot of backandforth about Donald Trumps final plan. There is a lot of confusion about what he wants to do with the 11 million or so undocumented immigrants in this country. He has not been very specific about that. That is something that is building up as he gets closer to this wednesday speech. He does say he wants to deport more and more people who are here illegally, specifically focusing on people who have committed crimes since they have gotten here. We are still not sure what he was to do with the vast majority of people here, many of whom who have been here for years and years. Matt getting back to the congressional races, i wonder if there are special numbers of republican candidates who are trying to distance their candidacies from that of donald trump. Do you see more of that than you normally would . Republican saying i am a republican that i dont support this guy either . We have seen some who have come out specifically and said they had not endorsed donald trump. Some like senator kirk have endorsed donald trump and retracted that endorsement. We are more seeing people keeping their mouth shut and not endorse donald trump or speak out against him. They will need his constituency and that Republican Base to come out if they will be able to win in competitive races. But a lot of them are not comfortable with donald trump and dont believe he has what it takes to get over 50 . Many of them are not speaking out against him but also not appearing with him when he comes to their states and not endorsing him. Joe bloomberg reported earlier trump is set to make his first speech in front of an allblack audience later this week or this weekend. Is he serious about trying to win some of the black vote or is this an attempt to position himself as not being a scary racist, or some of those moderate suburban white voters who might otherwise be sympathetic to him but find his current for trail portrayal too intolerable . I think it is a little of both. His polling at low Single Digits with black voters. He does need to do better if he will be able to be competitive and swing states. He also wants to reassure voters who are concerned about whether he is a bigot, as Hillary Clinton has called him. He wants to reassure them he can be the president of all americans so he will go into a black church in speak to an audience very different from the audiences he has been speaking to. He wants to reassure voters who are iffy on him that he can reach out to other constituencies and that he is not a racist. That is part of the goal as well, that he can go into a hostile environment, a community he is not used to being in and come out strong and give his message. As part of his goal here. On saturday, we will see how he does. Matt thanks so much for joining us. Coming up, this year may not be as hot as last year in terms of megadeals. But there are important ones to watch. Suzy quan has protections of where health care is heading next. This is bloomberg. Whatd you miss . It has been a quiet monday for deals as we wrap up the last week of summer. Jeff asked suzie wong how m a is looking this year. We had been running even with 2014. Year to date, 2016 is a little behind. It is about even with the 10year average. Too early to draw a conclusion about the year because a couple of big deals can change those numbers. What i would say is interesting is the last three or four weeks, we have had an inflow of new mandates that could be interesting. I know you spent a lot of time in health care. How does Health Care Look . You have been on a bunch of deals. How is Health Care Looking . Health care is always busy. That is why it is such an interesting market. There are always deals going on. What is interesting is if you look at the pattern, we had several cycles of consolidation with Large Companies merging. What i find really interesting is what you are seeing now is deals that focus on science. I think the reason that is happening is companies are looking for growth so they need new science. You knowst in r d but what it takes to bring a product to fruition. A lot of money and time. The second reason is biotech is becoming a more mature industry. You have many more companies now than 10 or 15 years ago that have derisked. Some companies have become very big. Acquirers can look at these companies and say i can see that becoming big and having a big impact on me. Years ago, everybody was trying to buy drugs in the hepatitis space. Now it seems we are in the era of cancer drugs. What is the next area they are going to go after . You have to look at it in terms of, they look for big market profits. They first went after cardiovascular and cholesterol. Then it was hep c. And now im college he. Before i get to what is next, it is key to remember oncology is a big market. I think we are at the tip of the iceberg on oncology. I think that will go on for a while. I talked earlier about there being a lot more mature biotech companies. One important point is in the search for growth, if you look at the biotech market five years ago and acquisitions, Pharma Companies usually looks for Companies Close to launching a drug. In the last five years, a lot of deals got done before commercialization meaning they were willing to take some risk. I think oncology is going to go on for a while. The other area is orphan or rare diseases. You have small populations. When you buy a drug or company in that space, you have less petition in terms of r d but you also have more pricing flexibility and can show real clerical impact. Out, ilook several years think demographics would point me towards things like alzheimers, parkinsons, degenerative diseases. You spend a lot of time on crossborder deals. Companies in the u. S. Buying in asia or europe. Brexit, has that been the impact we would have thought . Hasnt slowed down has it slowed down m a . Brexit has had some impact on thinking. I dont think it will impact a company that has a strategic imperative to invest in a certain market or product or who really needs growth. I think temporarily people are trying to orient themselves toward what we think happens next. I think it is very company specific. You have to look at the individual company. Multinationals often have operations in different places. Where is headquartered does not determine the exit of brexit where it is headquartered does not determine the impact of brexit. That was earlier today. Time for a look at some of the biggest business stories in the news right now. s has oustedines the president. American says kirby is leaving immediately. He will report to united c. E. O. Oscar munoz. Southwest and the pilots union have agreed on the basics of a contract. Raiseld provide a 15 pay followed by four annual increases of 3 each. Final wording is expected to be negotiated by the end of the week. They have been in talks for more than four years. That is your airline focused Bloomberg Business flash. Coming up, what you need to know to gear up for tomorrows trading day. That is coming up next. This is bloomberg. Dont miss this. We have had gdp. Tomorrow we get german cpi. Matt dont miss home prices coming out at 9 00 a. M. In new york. Joe and i will be looking at Consumer Confidence at 10 00 a. M. Matt am mike. John and i am john heilemann. Mike with all due respect. It is good to know. John an old man. Finalendling