Today in washington. O. J. Simpson will ask officials this week to let him out of a nevada prison after serving more than eight years for an illfated did to retrieve sports memorabilia. The football star has been serving his sentences for a 2007 armed robbery. He is due to appear by videoconference or stay from the lovelock collection of Correctional Center to be questioned by parole commissioners. Thanl news powered by more 2700 journalists in over 120 countries. I am Mark Crumpton. This is bloomberg. Julia live from bloomberg World Headquarters in new york joe we are 30 minutes from the close of trading. Ia stocks and trains unchanged as markets await earnings. Scarlet a pull suggests most americans are happy about their jobs and the economy, but in spite of President Donald Trump instead of because of him. The data gives the government little room to lower financial risks. Trading smallcap is still off. Netflix was the content king with the return of several big hits. What it means for the bottom line. Netflix reports after the bell. Let us look at where the major averages stand as we head toward the close. Abigail, give us the details. Abigail very small moves for the major averages heading into the close. Small declines in the dow, s p 500, and nasdaq, after the major averages traded mainly higher for most of the day, flipping between small gains and losses, as you were mentioning. Investors on hold ahead of earnings. The heart of earnings season, we see Big Companies report. We do see the netflix. And s p turn higher, it would represent another record close after last week. We have a little trading time left. Lets see what happens. Netflix shares have also been flipping between gains and losses, ever so slightly higher. They report after the close. One of the marquee names for the s p and the nasdaq. A consumer name. Investors are looking for . 25 3. 7hare, and earnings of billion. Subscriberrics, adds, is expected to be relatively strong. 3. 20 3 million net advertisements based on strong content. Season five of house of cards. We have a very interesting chart on netflixs net adds for subscribers overall. Net the growth, year. Or the subscribers, we see a down trend. The easy comp relative to last year, that dipped lower a bit messy. The stock initially dropped on that. If they hit the numbers expected, 3. 20 3 million 3. 23 million subscribers, it should take the growth at or above even. This is a stock in a very volatile space after its earnings report. Hit the number, we could see a big move higher. If not, they could move lower. The Second Quarter report last year. We see a big dropdown, 13 . The big news up and down in general, except the last two quarters, is suggesting we are likely to see you there and 8 move up or down for the shares of netflix. Outlook onabout the the international business. The bull market continues and bond yields lay low. Investors are plowing into riskier assets and equities. Investors allocating about 40 of portfolios to stocks, a level not seen since 2007. Joe joining us now is ben carlson, a wealth manager. You wrote a piece for bloomberg on asset allocation. He joins us from grand rapids, michigan. I want to ask you to resolve a conflict for me. Sometimes you hear this is a bull market, yet allocations to equities are at their highest level since 2007. How do you reconcile those things . Ben the simple sticks the nation is that stocks have tripled since 2009, the simplest explanation is that stocks have tripled since 2009. In a rising market, that makes sense. People do not have anywhere else to put their money. I think people understand that Interest Rates are low. Saving rates are low in the country. I think a lot of it is just out of necessity. People need to invest in riskier assets, try to make more money. Joe does that mean it is not necessarily reflective of exuberance or enthusiasm for the equitys specifically, but just a lack of opportunity . Ben i think that is a good way to look at it. We call it handcuffed volunteers. People do not have other options. The other thing to think about is, people are living longer. In the old days, the retirement strategy was you worked until you died. Now, people have three, maybe four decades ahead of them on retirement. People assume baby boomers will be a risk when they retire. I do not think that is the case. I think baby boomers are looking at how much savings they have. In a lot of cases, not much. They have maybe 40 years to grow their assets. Where else can you put your money but stocks to earn a premium over low Interest Rates . Scarlet you can look at demographics like baby boomers versus millennials. You can look at the makeup of the stock market, the structure, and professional investors versus households. Ownership has shrunk over the past few decades. It is the great part of the chart, around 37 . Professional investors neutral funds, hedge funds, pension funds, etfs they have grown. They are now at 46 . And about what this means, what investor allocation matters for a selloff. And 50s, 90 s of the stock market was controlled by retail investors, mom and pop doing buying and selling. Now it is flipped. 90 of trades are done by professionals. What that means is that investors have turned it over to the professionals, in the form of mutual funds or pensions are etfs. It is good because it allows them to be more diversified. They are not solely banking on a few stocks to control their savings. What it means is that more investors are diversified, and the growth of Something Like , ained Contribution Plans target date fund, means investors have more in stocks now than they would in the past, doing trades themselves. Scarlet a lot of people own stocks through retirement funds, whether through texaco accounts, defined benefits, which is falling, versus tax exempt accounts such as 401 k s. How does that play into allocations . Ben i think that is just one of the sort of double edge sword parts about this, the fact that more people are on their own now, managing their money. They have text of in a 401 k or 403 b. They are on their own. The default for most sabers these days in a Retirement Plan is a target rate fund. You pick a year you think you will retire. A Mutual Fund Company picks the stocks for you. That forces investors to diversify. What that has done is push up allocations to equities. In the past, people might have invested all their money in a money market account or a bond fund that seemed more safe. Now, they are in stocks because target date funds are forcing them to be in stocks. Julia quite illuminating in that chart was how small the etf representation is, amidst all these concerns that etfs are creating distortions in the markets, the money going into these index funds. Even if it is increasing or decreasing the level of efficiency due to the rewards or fundamentals, can you debunk some of those myths for us . The Mutual Fund Industry still outweighs the etf industry by a factor of 421. I think what you are seeing in etfs people think it is a bubble. I think we are still in the early days of the growth. It is just a transfer of funds to mutual lowcost etfs. In the past, a lot of investors were simply invested in indexed mutual funds. Now, they have shifted to lowercost etfs. The downside is that people are trading them a lot more. In the advantage they are gaining to lower costs, they are giving up by trading more. In the s p stocks 500, the turnover is 120 , meaning how much they traded share. The biggest etfs turn over 900 each year. People are trading them a lot. They probably lose a lot of their advantage by over trading, because i have so much easy access. They are liquidity providers. How many do you need to keep the market appropriately liquid . Ben well, the old joke i heard dentistsou need two having lunch in lubbock. But that is a little tiny. Thes still a majority of assets, Something Like 66 active. Is even, the number higher. We look at all global assets, indexing is only 5 , if you look at bonds, commodities, and stocks. The growth has been spectacular in etfs and index fund. I think there is a way to go. I think active investors are needed, but i do not think they are going anywhere, because it pays to well. People make lots of money actively investing. I do not think those people are going to go anywhere. Joe you make a good point that this increased exposure to equities is a result of some structural changes that have happened in the markets over the past several years. What would you watch out for, from an allocation standpoint, or any other standpoint, to signal, this is exuberance for the stock market person marked this as a level of love for playing the markets that indicates danger ahead . Question. Is a great i think it is a psychological factor. I do not think there is a specific ratio. That is a mushy answer, not an easy way to look at things. I think when we see huge flows into different sector funds, it is not just people playing the broad markets. In the 90s, it was technology funds. When we see big flows into certain areas of the market, that gets overdone. That is when you can start being concerned. Scarlet ben carson, a bloomberg profits contributor. Take you for joining us from grand rapids. You can read his piece on the bloomberg and on bloomberg. Com. Withg up, a conversation the head of west coast business on how uber is dealing with the departure of Travis Kalanick and competition from lyft. Scarlet what did you miss . What is ubers path now that Travis Kalanick has departed . We sat down with the west coast head of is this at the convention in boston. Eric began by asking about prospects for growth. We see growth accelerating. Eric and how fast . I cannot share that today. But it is at a very good clip. Eric and how much of a threat does lyft pose in the Business Travel market in america . A globalnk about it on scale. We are trying to solve problems for Business Travelers. This is travelers care about having a solution in every market they travel in. We are in 450 plus cities, 70 plus countries. When you land in one of those cities or countries, you want to be able to quick a button and get the service you are used to. Eric but either i am a consumer or a company. Expectations are even higher for Business Travelers. The expectations of companies are higher. The expectation is you are able to manage the policies. The expectation is you can report on the data as it lows in. The expectation is that you can have more control as a business to know where your people are, from a duty of care perspective. Eric a lot of the success of uber was part of the product of inls that emil michael did the early days. Now that he has left the company, where does that leave uber . Up for success. The work that has been done by the team over the last fiveplus years, six years, has set us up strategically, domestically, internationally for success. We are in a really great place. Eric what about travis . How have things changed since he left as ceo . Peter it has been a very short period of time. The company is incredibly focused on solving the issues in front of us. We are focused on solving the cultural issues. The leadership aspect, we are focused on. And finally, from a driver perspective, you have probably seen the increasing releases around tipping, the wait time pay. All of these things are actions to start to solve for some of the things that have been exposed over the last few months as issues. Eric you came in a few short months ago from facebook. Given the culture you knew there, did you see those as deficient is at uber when you arrived . Did you see a need for them to be changed in the way they are being changed now . Peter i will tell you this. Coming in from facebook, facebook has an amazing culture. That is something that has been cultivated over the years. Uber absolutely has all of the nuggets that you need to build a great culture. And it is just a matter of maturity, and that the leadership structure, the organizational structure, continues to evolve, which we are heavily focused invested in. Eric outsiders and insiders, whether it is uber for business, the uber app how does the company make it an important decisions without the ceo . Peter i do not know that i am the right person to answer that question. Eric but you have to live with the consequences of that situation. So who is calling the shots for you right now . Peter there are a myriad of different people who are already in place, when the executive team that left, left. They are competent leaders that understand the business in great depth, and they have taken risks. Eric do you think morel is a risk, given the fact that something so many employees were looking forward to an ipo is on hold until Management Issues are resolved . Peter we are focused on resolving any more row morale issue. Things like you saw from the driver rollout we start to put the people and the pieces in place for an evolved culture. I think that is going to be solved. Jonas, that was peter uber west coast head of business, speaking with Erik Schatzker at a convention in boston. Julia we are showing you live pictures at the white house. It is made in america week, in case you missed it. Look at what is going on. Joe what could be more made in america than a cowboy hat . Julia he will be giving a speech at one point to talk about the plan is what the plan is. Going through entire rooms of the white house, set up with displays characterizing the best of made of america. The Agriculture Sector scarlet forklifts. Joe the white house has had several of these weeks infrastructure week trying to get back on message. But that was a good visual. Julia everything else, quiet, we hope. Let me give you the Bloomberg Business flash, a look at the biggest is the stories in the news right now. A fund manager is launching [indiscernible] proctor and gamble is seeking a seat on the board. Png stocks have underperformed because of what it calls slowmoving and insular culture. Png responded by saying they has notby saying trian provided actionable items. Bnp paribas has been fined for unsafe and unsound actresses in the Foreign Exchange market. The fed says the fx trade was insufficient, and has ordered the company to improve oversight and control. That is your Bloomberg Business flash. Showingt trump is products made in america at the white house, as we were just mentioning. Is doing an introduction, i believe, to donald trump at this moment. Elseope is that nothing detracts attention from made in america. Joe i wonder if they can go a week without having that happen. Scarlet we have seen in the structure week, energy week. What else . Joe i cannot keep track of all the weeks. Scarlet we will bring you the president s comments. In the meantime, we look ahead to netflix secondquarter results, just after the bell. Scarlet you can see President Trump beginning to speak at the white house. It is made in america week. Lets listen in. Pres. Trump the other administrations could not come close. You know how long it took . One sentence. We wouldresident xi, love to sell beef back in china again. He said, you can do that. That was the end of that, right . The great sonny perdue. So, we are very happy. We are here today to celebrate American Manufacturing, and to showcase the amazing product from all 50 states, made in the usa. Remember the old days . They used to have made in the usa, made in america. But made in the usa we are going to start doing that again. We are going to put that brendon our product. It means it is the best. I a few months and moments, will say what we have done over a short couple of time, and what we will be doing over the next six months, will be incredible. We have signed more bills and i am talking about through the legislature than any other president , ever. For a while, harry truman had us. And now i think we have everybody, mike. I better say think, or they will give me a pinocchio. I do not like nokias pinocchios. I will be signing a proclamation to make today made in america day. Byare thrilled to be joined so many incredible members of my cabinet. Every member of my administration shares the same goal to provide a level Playing Field for american workers, and or american industry. [applause] and we are providing it much faster than other countries were doing. So it has been really a pleasure. We want to build, create, and grow more products in our country, using american labor, american goods, and american grit. When we purchase products made in the usa, the profits stay here. The revenue stays here. And the jobs, maybe most importantly of all they stay right here in the usa. In the audience today [applause] pres. Trump in the audience today, we have skilled workers. We have Business Leaders whose americanmade goods we are proudly displaying all over the white house and outside. I saw fire engines. I saw tractors from caterpillar. I saw some incredible machinery. Make it right here. We thank you for being here. We are honored to showcase your creations. And i will say they have really taken on as some of you have old names i have known well for so long. Congratulations, right . What a great job you have done. Thank you very much. I saw you on television this morning. You were fantastic. You know what you are doing, exactly, but you can always have a second career. Thank you very much. And innovatorss are the best in the world. We know that. What we are doing is, we are displaying those talents. You construct and harvest the products that fill our homes, feed our families, defend our nation, and enrich our lives. I want to make a pledge to each and every one of you. No longer are we going to allow other countries to break the rules, steal our jobs, and drain our wealth. And it has been drained. It has been drained. [applause] you are going to see a lot of things happening over the next six months, you know, statutorily, and through a lot of different legal through the legal process. It takes a while to get it so you are allowed to do it. You are not allowed to do it. We have now mostly fulfilled all of that. Over the next short couple of time, you will see is you are not going to bleed for our country, for selling product in our country and making product in our country, things that are great for american jobs. We are totally set up. And the hard part now is done. It is a hard process. We are going to get rid of some of that process for the future. We are going to stand up for our companies, and maybe most importantly for our workers. For decades, washington has allowed other nations to wipe out aliens of american jobs through on their trade through unfair trade practices. Wait until you see. You are going to be so happy. This painful exodus of american jobs i have been talking about for years is also marked by a period of sluggish growth, falling incomes, surging welfare, and shrinking participation in the workforce. Clearly, it is time for a new policy one defined by simple rules. We will buy american, and we will hire american, right, governor . [applause] pres. Trump my administration is removing the burdens and regulations on your companies, so that you can compete, thrive, and grow. How many of you have noticed this so far . It is a big difference, right . That is a big difference. People coming up to me cannot believe it. Y, took the farmers land awa the home builders. They have their land back. They are building homes and farming, and it is beautiful to see. They are so thankful. A lot of those regulations have been taken off. The rest are coming off. By the way, we will have better protection than we have ever had, but we will also have something where you do not have to wait 15 years for a permit, and when you go to the board, you lose. That is a big portion of your life wiped out, waiting for a permit. We are not going to let that happen. For our nation to really prosper, we must lower the tax on business, one of the highest in the world. And we must repeal job killing obamacare. We have to do that. [applause] and i can tell you, we hope john mccain gets better very soon, because we miss him. He is a trustee voice trusty voice in washington, plus we need his boat. [laughter] back. Trump he will be and he will be back sooner than some of the else would be. He will regret he will be back soon. We do have to repeal obamacare, and we will end up replacing it with something that is going to be outstanding far, far better than failing obamacare, where premiums have gone up in some cases over 200 this year, where every single element of it is bad. And the insurance companies, by the way, are fleeing. Some states, you have no insurance companies. We have some veterans here and senators here and congressman here, and women. Tell you, it is a very hard time they are having with the obamacare situation. So we are going to get that done, and i think we are going to surprise a lot of people. They are pushing very hard. The republican senators are great people, but they wanted different things. Some states want this. Some states want that. But we are getting it together. And it is going to happen. Right, mike . [applause] pres. Trump and when it does happen, that will be a big day in america. Believe me, a big day in america. We must also fight the unfair trade practice that have gutted our industry. And that includes cracking down on the predatory online sales of foreign goods, which is absolutely killing our shoppers and our Shopping Centers, if you look at what is going on with Shopping Centers and stores and jobs in stores. It is being very tough for them. They have had a tough time, closing at numbers and records that have never been seen before. So we have to stop the online predatory practices. Since the beginning of the year, we have already created over 50,000 brand new manufacturing jobs, and we are just getting started. We will lift our citizens from welfare to work. We will turn or did up communities into turn boardedup communities into new outposts of american prosperity. We will rediscover our heritage as a manual actually nation. As a manufacturing nation. You look at michigan. You look at some states that have really moved. Pennsylvania, two weeks ago, they opened the worst mine in decades. First mine in a decade. We picked up 45,000 mining jobs in a short time. People were saying, no mining jobs. Picked up 45,000. The miners are very happy with trump and with pence. But that is just the beginning. We have jobs coming from all over. Restoring American Manufacturing will not only restore our wealth, it will restore our pride, and pride in ourselves. It will revitalize our independence. And it will rebuild the bonds of kinship between our communities and our citizens, which has been lagging, wouldnt you say . For most of our nations history, american credit and we see this. American president s have understood that in order to protect our economy and our security, we must protect our industry. And much of that comes at the border. George washington encouraged americans to produce their own goods, so that our young nation could become truly independent. President James Garfield said of our nations manufacturers that to them, the country owes the splendor of the position it holds before the world, meaning, protect us. President roosevelt declared in his first message to congress that reciprocity my favorite word, reciprocity because we have countries that charge is 100 tax on our product. When that product is sold by them to us, we brilliantly charge them nothing. People say that is free trade. No, that is stupid trade. That is really stupid trade. [applause] it is incredible. Say,tually have people who we cannot do that. That is so incredible. But whatever. What happens in washington, you would not believe the things. But reciprocity must be treated as the handmaiden of protection. William mckinley proclaimed that we ought to take care of our own first. And her industry we have to look at our nation first for a change. We have been looking the other way for a long, long time. If you look at what is going on with the success of other nations, even in europe you look at some of those countries, one in particular. It is not fair to the United States. And that is why i am here. And i believe it is one of the primary reasons you elected me and mike. That is why we are here. And i think you are going to see a week, big i do not think, i know you are going to see one of the great differences. You are already seeing it, but it is going to get more so and more so. We are going to end up having on a level Playing Field. I do not want to say anymore. But if the Playing Field were slanted a little bit toward us, i would accept that also, ok . [applause] once again, we will celebrate craftsmen, producers, innovators, like the incredible men and women in this room today. We will protect our workers, promote our industry, and be proud of our history, because we will put america first. America will be first again. We will make America Great again. The member that. Remember that. We will meet in the same room in a year, and in two years, and you will see what happened. Thank you for being here. God bless you, and god bless america. Thank you very much. Thank you. Iq. Thank you. Scarlet that was President Trump speaking at the white house. It is made in america we. He talked about the need to get fairer, more balanced trade deals with our trading partners. We want to tell you about netflix. Better than 7. 5 in afterhours trading. It just reported results. The number everyone looks at for netflix is the subscribers additions, the streaming numbers. For the Second Quarter, the quarter that just ended, netflix added 1. 07 million domestic streaming additions, compared to the estimate of 633,000, blowing away those numbers. International streaming, more than 4 million additions. Analysts were looking for 2. 6 million. The outlook positive, up 2. 4 million for total net ads. Shares rising by almost 8 in extended trading. Revenue coming in better than expected, 2. 78 billion. This is even though the Second Quarter seemed like a week quarter. Netflix released a lot of the kids during the Second Quarter, including not game of cards, house of orange is the new black, master of none. Paul, let me bring it to you. What jumped out at you . Paul as you mention in your summary, this summary continues to be a subscriber growth story. It is driven by the International Subscriber growth. Look at the u. S. Market. It is a little bit more mature, over 50 million households of 100 subscribed out million households. The future growth over the next two or three years is going to come from International Subscribers. We saw Good International growth in the Second Quarter, and maybe more importantly the outlook. Rter julia outlook. Julia they guided that the Second Quarter was going to be pretty good, comparable to the Second Quarter of last year. It is pretty critical in terms of the number of additions of subscribers. They are saying, the company themselves, that much of the momentum is going to continue. Think thereason i stock is up so much is because of the international growth. Than a higher risk story the domestic story has ever been over the last several years. We talk about different programming tastes. Some competitors in International Markets might make a newcomer like netflix more difficult to impact the market place. But they look like they are doing a good job. Joe one of the things i find extraordinary some of these internet juggernauts, amazon, facebook, alphabet it is naturally winner take all industry. Theit is not necessarily case with entertainment and the business netflix is in. Yet it is still crushing along as if it were. David you may recall from the past, i think this is a company knocking it out of the park in its business, whose valuation is in a stratospheric level that has no connection to reality except from a momentum point of view. It is a wonderful company. Include facebook, apple, amazon, and google alongside this company, this is the one that does not belong in that group. It does not have the diversified revenue stream, the kind of opportunities longterm. It is still a great company. Would i buy it . Absolutely. Julia where does the reality check come from . David it comes from sentiment shift. Julia what drives that . Obviously, even the slightest Momentum Shift would cause people to suddenly flee for the door. We have not seen that, and maybe will not next quarter. They are doing great. But think of the people competing with them. Even facebook is producing content. Youtube is moving in that direction. Hulu is doing better. Amazon, the company nobody wants to compete with, is the toughest competitor. That is a tough position. It is nothing like a monopoly facebook or google has. Other breakinge news from tesla, adding new executives from Major Media Companies as directors. Investors have been pressuring elon musk to diversify the board with members who are not linked to the ceo. Who they have added James Murdoch, who heads up 21st century fox, Rupert Murdochs son, and linda rice, of Johnson Publishing company. Both will be joining the board. David kirkpatrick, you look at the tech world. Tesla is a tech company. Does this loosen elon musks grip . Eva no, he has 100 grip. We are talking about tesla right after netflix. They have a lot in common. They are both companies to invest in only on the presumption they will take everything. They will singlehandedly transform their industry. Ways, netflix may have a better longterm prospect of doing that. Competitionting from every direction. They are very dependent on subsidies from government. I am a huge fan of elon musk. Nobody can pull a rabbit out of a hat like him. Joe i want to go back to the point david brought up about competition, help netflix is not how netflix is not necessarily in the same category. Letter, it discusses the intensity of competition. Youtube, hbo, all these different competitors. Is there a mode other than that people like its shows . Its shows . Have beenthey successful in the marketplace is two things. They have a brand. Nobody else has a streaming brand like netflix. They have first to market mover advantage. Certainly in the u. S. , and international market. Those have allowed him them to grow dramatically. However, there are well entrenched, wellfinanced people getting into this business. By no means is this a monopoly. They recognize they are in a race to get market share globally. That is why they are sacrificing nearterm profits. They are racking up close to 15 billion of liabilities. They recognize it is a race to gain eyeballs and market share. Of what could turn this the other way is it a Second Derivative of subscriber growth grows. This is a subscriber growth story, not revenue, not earnings. When you see that Second Derivative turn, that is when the momentum will turn on the stock. That is why the company is trying to get investors, starting last quarter, to not focus as much on subscriber growth, but on profits, contribution, because they know that day is coming. David hbos continued growth it is a comparable business, and it is a tiny piece of time warner. In the last few minutes, netflix, for the first time, blew past time warners total valuation. You have a business that is part of it that is like it, that is part of a much bigger company. That is kind of weird. Julia talk to me about content generation. I think it is a valid point. If you on the stock, email us, tweet us, talk to us about content. We are concerned about the cash burn. Netflix is piling cash into generating original content, and making a stand that they do not want to buy content from anywhere else. In the emmy awards, double the hall for netflix that they won last year. In terms of creating awardwinning content, they are doing a good job. Over 7y will spend billion in total programming this year, the biggest in hollywood. The head of programming is the most popular person in hollywood, because he has a big checkbook. It is wide open. They are increasing the amount of original as opposed to acquired programming. A lot more house of cards. That is good if they work. But if they do not, you have programming risks they did not used to have in the market place. But they know they have to do that, because the competitors are doing that. Scarlet that is proprietary, isnt it . Paul they are starting to build proprietary content the last couple of years, but it is still a small part of the programming budget. They say it will be about 50 in a couple of years. David, it is becoming this cliche in the market at the moment amazon thinks about entering a business, the stock plunges 20 . Amazon is already in netflixs business. It has been for a while, coming up with its own slate of shows. His amazon eventually going to steamroll this company . People will say, why am i paying x amount for netflix when i can get the same thing . How does netflix withstand it . David increasingly, it does appear amazon is going to steamroll the entire economy. I think netflix has done a better job than almost anybody of resisting that pressure. The higher their valuation is, the more they are going to have the ability to spend extraordinary amounts on content. Nobody can argue they have not done an amazing job with their content. But i would be very scared of amazon if i were reed hastings, and i know he is. Julia great to hear your insights. A Bloomberg Intelligence director and a technology ceo. Scarlet breaking news earlier in addition to netflix secondquarter results, tesla James Murdoch and Linda Johnson rice as directors, diverse buying their board with members who are not directly tied to elon musk. Additions to the board of tesla. A new bloomberg poll shows that america eels pretty good about the economy. Not so much about the commanderinchief. Mark it is time for first word news. According to the new Bloomberg National poll, americans feel good about the economy, but not President Trump. 58 of those surveyed say they are moving closer to realizing their own career and financial aspirations. 55 of americans view President Trump unfavorably, up 12 points since december. Still, 89 of those who voted for the president say he is doing a good job. We will have more on the story coming up. Withs brexit secretary met the european negotiator in brussels for a second round of talks today. Mr. Davis is urging negotiators to push for progress on the rights of citizens living in each others nations. It is incredibly important we make Good Progress with the negotiation of this, and identify the differences so we can deal with them, and identify the similarities so we can reinforce. And now it is time to get down a work and make this successful negotiation. Mark the e. U. Says Citizens Rights is one of three issues where there must be progress before it will discuss future ties with the u k an american doctor specializing in treating rare genetic conditions is in london to assess a critically ill 11monthold for the first time. The visit by the doctor from Columbia University was organized during a Court Hearing last week, after he testified a new treatment was worth a try. Charlie suffers from a rare genetic disease that has left him braindamaged and unable to breathe on his own. The babys parents have taught in court for permission to take into the United States for treatment. Thailands new king has tightened control over the richest royal fortune, estimated at more than 30 billion. The king succeeded his father last year and has already taken control of alice agencies once controlled either by the government or the military. The new law passed today gives him direct control of a Holding Company for the royal palace assets. News fight analysts in more than 120 countries. I am Mark Crumpton. This is bloomberg. Julia as marc was reporting, a new bloomberg poll Shows Americans will fairly optimistic about the economy, but those good feelings do not extend to the president of the United States. Here with more details is bloomberg money and politics reporter John Mccormack, in chicago. This is a moment where you say sack the publicist. Then you remember donald trump does his own p. R. That might be the problem. Explain this apparent dichotomy in the findings of this poll. Thinknormally, you would if the economy was moving along, people were happy financially, and home values were up, they would feel good about who is running the country. That is not translating to donald trump. As you mentioned in the headlines, he is viewed quite unfavorably. He does still have his base. People who voted for him in november are still with him, nine out of 10 of them. Democrats obviously are not with him. , which decides most elections, have moved away from him in big numbers since december. Joe you mentioned his base and i want to go right there. Cant has never been particularly popular. He did not win the popular vote when he won the election. But he has his core base. Did we discover anything that would show any crack or potential future cracks, where he could start to lose his base . John not really. The one place where we did see potentially was with health care. Fourth of voters think he is doing well but the health care is doing well with the health care issue. Scarlet what about the investigation into ties with russia . Feeling toward the fbi is positive. The president and the fbi at odds with each other. Elevated president has the fbi as an institution, the fact it has been in the news so much. Agencys Approval Rating has picked up 10 points since december, a pretty big move. That hasnstitution seen a big drop in how it is viewed this was one of the more surprising numbers in the poll. Viewing the white house as an institution, not associated with donald trump, the Approval Rating of the white house as a whole has dropped 21 points since december. It is a huge drop in how people view the white house as an american institution. Julia where did they actually believe he can deliver . Where are they actually seeing optimism about what he can achieve here . John there is really one place we found, and that is regulatory reform. They still think trump can get major things done when it comes to reducing the number of regulations in the country. But we tested lots of other Campaign Promises he made building the wall, the health care issue, and so forth and there are very few there is skepticism he is going to be able to accomplish most of what he or missed during the campaign. Joe talk to us about the bind this puts some of the d. C. Republicans in. On the one hand, his policies are not very popular. On the other hand, his base is incredibly motivated, theoretically, to punish anyone who would defect. How do politicians play that tension . John it is a bit of a numbers game. Of the housemember in a close seat that will be up for election next year, you will be looking at the president saying this guy make not have a lot in terms of coattails. How closely do i want to be associated with him . Trump talks about polls a lot, and they do matter, because politicians read them very closely. They will be less likely to go along with trump on certain things if they you he is in a state, whichakened this suggests he is. Scarlet John Mccormack joining us from chicago. Thank you. Facing, the oil industry a labor shortage. Shale explorers are struggling to find enough workers. Whoooo. I enjoy the fresher things in life. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest prices. So if youre anything like me. Youll want to check tripadvisor. We now instantly compare prices from over 200 booking sites. To find you the lowest price. On the hotel you want. Go on, try something fresh. Tripadvisor. The latest reviews. The lowest prices. It is time for first word news. President trump today kicked off made in america week at the lighthouse by promoting and showcasing American Products made from all 50 states. We will buy a american and higher american. The war in afghanistan killed a Record Number of civilians during the First Six Months of this year. That is according to a United Nations report released today which blames the majority of the deaths on bombing by insurgents. The u. N. High commissioner for human rights called the deaths of more than 1600 people horrifying and said the numbers the human convey suffering of the people of afghanistan. Foreign policy chief is which this month conducted its first intercontinental ballistic test. Tensions on the peninsula had to be solved by peaceful means. We stressed the leading role the republic of korea has. Tensions lie in the peninsula itself. Including confidence building measures. Mark she added those measures should include military to military dialogue between seoul and pyongyang. President clintons government has proposed resuming talks on some military and humanitarian regimewith kim jonguns , after the willingness to consider moons overtures. By 2700 journalists and analysts in over 120 countries, im an art hampton i Mark Crumpton area im Mark Crumpton. Have the u. S. Trade representative announcing the negotiation objective. The statement suggests they will seek to reduce the trade deficit and break down barriers, that they are going to discourage currency manipulation. Mckee,peak with michael great to have you on. Nothing here i dont think we wouldnt expect. Talking about how unfair the rest of the world is and calling it the worst trade agreement ever. This is pretty standard stuff. The canadians and the mexican sign on for these changes as well. The agreement is 25 years old. Are things in place like ecommerce that werent around when it was negotiated. A want to basically eliminate some additional terrorist but maintain most of the free trade low tariff agreements that are already in there. Your read of this is it shouldnt be hard for new mexico and canada to agree with something that would be in mine with trumps agreement . The most trade analysts would say you want to do labor and Environmental Standards and a. Ide agreement this is pretty standard stuff so far. We know the Trump Administration likes to use trade balance as a yardstick, and in this statement the trade theesentative has said for first time the u. S. Pr has included deficit reduction. Know canada and mexico feel the same way, did they look at it as pacific objectives . Its difficult to make a case that trade deficit is good or bad one way or another, along with specific distortion. We are getting products for mexico. We all have a trade deficit with barbers and mutations every month. We have less money but we got something out of it. When we seem to come back on them, it is some a negotiating the details or perhaps he knows a little bit more about this and the situation changes. What we hear behind the scenes . Just how the contours of this are going to play out, is it positive or more cautious than they suggest . You notice the rhetoric has come from donald trump and not members of the administration, not from mexico and not from canada. They do have a lot they agree on. Theres a lot that can be updated and modernized in the treating in the treaty. You cant import finished products from asia to mexico. Hows the kind of thing much should be included in a made in mexico versus a made in u. S. Part. Those are the things that may have some controversy to them. It doesnt look like this is an unobtainable negotiation. We shall see, bloombergs economic and that economic correspondent. Companies are starting to thinking to think about expanding their u. S. Operations. Talking about this labor shortage. Hes the director of the global oil markets. Thank you so much for joining us. How much is a limited labor supply holding back . Its making an impact. If you look at the difference between the activities theres not much fracking going on. Theres a lot of drilling. Maybe not the fracking so much. There are lotus drilled holes purposesound for the of fracking have been delayed. Guest i think the word is starting to get out. Growth in production has not been quite up to forecast. Ofre has been a lot exuberance. They throw these around like they are the same thing. Actually recognizing the gap between the two things. The recount was zero. That means fracking will catch up. That means on the way up, show productions will not rampup. But it decreased the drilling. Essentially much more stable, there is much more in her shop. Lets go back to the reason why. Part of it is because of the labor shortage. Frack crewon the something that people want to do and they seek to do and they look to do or something they and up doing because they cant find that are opportunities elsewhere. It was after the financial crisis of 2008. The labor market was very loose. Now it is completely different. They are getting squeezed as well. Unsatisfying because whenever you hear about an industry talk about labor retail, whether it is just pay them more and define the price in which this market clears. Its not that simple. The lack of fracking is not the only problem. If you look at the initial look at theif you spend we are starting to revise the forecast. [indiscernible] the growth is not quite as vertical. [indiscernible] not growing as quickly. Is this supply glut not as dire . Guest there are many moving factors in this. Behold they have nothing else to sell. , they look at infantrys are falling pretty hard. Do you think opec knows this . They recognize the at some point it will be defined. Hope rather than knowledge. Of oil markets. We appreciate it. We will discuss the two big developments out of china data and what markets, particularly this particularly the chinese fall cap. Chinese small cap. This is bloomberg. Solid numbers for gdp, fixed Investment Assets and spills. Markets bills were unnerved about a warning. Here to explain is bloombergs executive of rater china. Gdp at 6. 9 . Our discussions falling by the wayside now . You have to think it is less likely. Everything was stronger than expected overnight. The annual target is 6. 5. I would feel pretty confident. Scarlet mentioned the daily of gray rhinos, which is characterized is highly probable highimpact threats that people should see coming but often dont. A warningrceived as of ongoing deleveraging. What does that say about the policy choices . Guest where growth is stronger, the government has more room to press down. We see more of this crackdown on lending. Of some really stringent words regarding the accountability for regulators. The statement suggested it would be a dereliction of duty if regulators [indiscernible] the reaction we got in the equity markets overnight was perhaps most concerned about what else is out there that we dont know about. Processlike a five year cycle and we are talking about a pretty stringent and continued crackdown. This year you had this sign that this was coming. Xi jingping came out and talked about how important financial risk is. It has never been taken to that level before. You see this on the national agenda. Is theretake from that is no turning back. The perception out there this was a temporary period. They perhaps loosen up eons that. We mean business and we are here to stay. After this political sort of changes are done. Means the governments government is in a position to leverage even further. Rayny investor looking goldilocks situation in which there is growth and it is at or about or near the 6. 5 target 6. 5 target, but not so much that they have pushed with these deleveraging campaigns, that is unlikely, isnt it . It is unlikely they will let off. How does this fill in with the ties berkeley into the form itself. So that we dont want to see anything popping up unexpectedly. A lot of talk about what happened in the market. The small cap, the tech companies. Clubbing 5 in a day. We see the chart here, over 5 , nearly 6 . Really seems to be reacting to these warnings that deleveraging. We talk about the shanghai composite. Tell us about the smaller more speculative market and their sensitivity to government policy. All the data we gathered overnight is stronger than expected. The figure early in the month withs us lowest on record. The economy is still fairly strong. It was slow saying because we were cracking down. Bloombergs executive editor of greater china, more dangerous than a gray rhinos or a black swan. The rhino is pretty dangerous. Next, japan ceo tells us what he thinks about chinas growth prospect. He discusses all of these things from new york this is bloomberg. And investors take on china strong Second Quarter. Ceo and his interpretation of the datas of the latest. Communist what the party wanted to engineer. They are basically around 7 , which is a wonderful pace. It allows for the employment rate to be stable. It allows for the restructuring of the chinese economy to go. You mentioned it, this is a soft landing. Does it remove the possibility of a hard landing . A risk thatalways the unforeseen event is going to jolt the overall picture. Even the bubble adjustment and , particularly to the property sector. That right off, that adjustment isnt going very well. If you get an economy that is growing at 7 , bad assets are really not a problem. We had this meeting over the weekend discussing regulation and efforts to ramp up the regulated powers. We saw equity markets overnight as well. Looking at some of the language that was coming out of that statement, great accountability to regulators. It will be a dereliction of duty would suggest the element of ramping up the regulatory oversight. After a fiveyear plan, perhaps marston should control regulations for the next several years. This is a two step forward one step act or that the communist party is taking. You have to control the traditional financial allocation the communist party and the regulator has a very good grip on. There are all these investment vehicles that consumers are using but should not be using. Cramping down on that is the right way forward. Lets not lose track of what the communist party want in china. Not in the next couple of years but five years china will be asias financial center. There is an editorial in the daily newspaper that warned of attentional gray rhinos, and these would be highly probable highimpact people should seeing coming should see coming but dont. Is individual one speculators, being ramped up and being put into financial products. Products. Eared they have a slim oversight. But again i do want to recapture youve got to give the communist party, the peoples republic of chinas leadership a lot of credit because the adjustment in the real economy is going very well. Who is it is the right way forward. That was weston trees japan tree that was wisdom japans ceo. A busy day for tesla, the Company Appointed two independent directors, James Murdoch and Lyndon Johnson right. The automaker investigating and fully cooperating after a minnesota driver crashed his car into a march into a marsh. Adult passenger sustained minor injuries. Ceo elon musk commented on the stocks over the weekend. I find it quite tough when there are very high expectations. I try to tempt down those expectations as much as possible. Have gone on record saying the stock price is higher than we have any right to deserve. Saying the stock was low if you believe in teslas future. Food start up of hampton creep have abandoned ship. People familiar with the matter say the only board member left is the ceo. Also blame the mass exodus on a deep discord. Others were either fired or had more in april. That is a business flash update. And an update on netflix, which blew the doors of its latest numbers, the sox the surging over 10 , crushing analyst expectations. Netflix doing great, firing on all cylinders. We will tell you what you need to know for tomorrows trading day. This is bloomberg. Coming up, china report june prices at 9 30 eastern time. Cliques and you can report june and earnings reports from bank of america has goldman sachs, ibm, and united continental. Bloomberg technology is up next. Have a great evening. Alisa i am Alisa Parenti in washington and youre watching bloomberg technology. Lets start with a check of your first word news. Made int trumps america we kicked off at the white house. All 50 states were invited to showcase domestically manufactured products. Trump enjoyed overwhelming support from people who voted human but they are less enthused on his leadership on health care according to the Bloomberg National poll. 60 think it is unrealistic a bill that improves on premiums and coverage will pass. U. S. Trade representative Robert Lighthizer released a comprehensive summary of renegotiating objectives for nafta. The administration plans to seek a better deal that reduces the u. S. Trade deficit and improves Market Access for americans in canada and mexico. U. S. Are demanding the return the country houses seized last year by the Obama Administration in retaliation for election hacking. Russia calls it a breach of international law. O. J. Simpson will ask officials this week to let him out of a nevada prison. He served more than eight years for arme
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